Separating Green From Greenwash: Key Questions For Evaluating Net-Zero Commitments: Part 1

In the months since COP 26 in Glasgow, governments, companies, and organizations have continued to announce new net-zero commitments. These pledges represent growing global ambition to reach net zero by 2050 and limit global warming to below 1.5˚ C above pre-industrial levels. However, amid this raft of new commitments, the urgency for climate action has only intensified. The Intergovernmental Panel on Climate Change (IPCC) just released its most dire report yet on the consequences of climate change.

Now more than ever, it is essential to separate green from greenwash. Stakeholders and the public must be empowered to evaluate climate commitments. This framework provides readers with twelve questions to ascertain the quality and credibility of a given pledge. For clarity, these questions are organized into three topic areas: definitions of the commitment itself, the transition plan, and the transition pathways and scenarios used.

Defining the commitment

1. Is the organization part of an accredited initiative?

The UN’s Race to Zero is the gold standard in accrediting decarbonization initiatives from businesses, cities, regions, and investors. Race to Zero applies stringent criteria to the climate commitments of organizations within participating initiatives including requirements to publish actionable decarbonization plans and set interim targets.

For financial institutions, the underlying alliances of the Glasgow Financial Alliance for Net Zero are all accredited by Race to Zero. For cities, the Cities Race to Zero is accredited. For businesses, multiple initiatives are accredited, including Business Ambition for 1.5˚ C. Accreditation means that the standards of the initiative align to Race to Zero’s science-based criteria.

2. Is the commitment really net zero?

Net zero or climate neutral? Many key terms within a commitment have specific technical meanings. The Race to Zero considers an actor to have reached net zero when “any remaining GHG emissions attributable to that actor [are] fully neutralized by like-for-like removals exclusively claimed by that actor.” Like-for-like means that the source of emissions and the sink for removing emissions align in timescale and durability of carbon storage. Thus, since unextracted fossil carbon is stable in the earth almost indefinitely, solutions to remove emissions from burning fossil fuels must involve permanent carbon storage. “Exclusively claimed” means no double-counting of removals that are claimed by another actor or in another part of the business value chain.

Commitments involving climate neutrality are similar to net zero but are less stringent as they do not require the like-for-like dimension.

3. What activities are covered?

Many large companies have announced apparently bold commitments to reach net zero operational emissions, some as soon as 2025. However, those commitments are often less impressive than they sound.

A firm’s emissions are divided into three “scopes.” Scope 1 emissions are direct emissions. Scope 2 emissions are indirect emissions from purchased energy (e.g., electricity). Scope 3 emissions are all indirect emissions that occur in the value chain. Operational emissions typically only cover scopes 1 and 2. Yet, scope 3 emissions are often far larger than operational emissions. For fossil fuel companies, scope 3 emissions are created when their products are burned, typically 90 to 95% of the company’s total emissions footprint. For financial institutions, scope 3 emissions are the “financed emissions” of their clients, which can be hundreds of times the size of their direct emissions.

Ignoring scope 3 can mean ignoring most of a firm’s climate impact. That is why the Race to Zero requires targets that cover all three emissions scopes.

4. What emissions are included?

Nearly 75% of warming from greenhouse gases comes from carbon dioxide. Although other greenhouse gases are emitted in much lower quantities than carbon dioxide, per molecule, they are many times more effective at trapping heat.

Some climate commitments cover all greenhouse gases, while others only cover carbon dioxide. Net zero carbon dioxide and carbon neutral are more limited cases of net zero and climate neutral pledges as they only pertain to carbon dioxide.

Climate science does indicate that reaching net zero carbon dioxide emissions around 2050 and net zero for the other greenhouse gases close to 2065 can be consistent with a 1.5˚ C world.

Nevertheless, net zero greenhouse gas commitments are more comprehensive and more ambitious than ones only covering carbon dioxide. This is particularly relevant when other greenhouse gases make up a major part of a firm’s emissions footprint. As examples, most emissions from meat production come from methane and a significant share of a building’s emissions footprint may come from fluorinated gases (used for refrigeration and air conditioning).

This is the first article in a three-part series on understanding decarbonization commitments. This article focuses on how the commitment is defined. The next two articles will cover transition plans and climate scenarios.