REMARKS AT RELEASE OF REPORT OF HIGH-LEVEL EXPERT GROUP ON NET-ZERO COMMITMENTS OF NON-STATE ACTORS
Sharm El-Sheikh, 8 November 2022
Let me begin by thanking Catherine McKenna and the High-Level Expert Group.
Ms. McKenna, you’ve just given us a lesson, a lesson based on the hard work, and very effective work of the panel. A very comprehensive description of the content and the recommendations of the panel. Now it’s my time to show if I have learned the lesson or not. I will of course wait for your judgment to see if I can move forward in relation to the very important work that you have done, but I want to start by thanking you again and thanking the panel for this extraordinary contribution on climate action.
Last year at COP26, I announced that I would establish a High-Level Expert Group to address net-zero commitments by non-State actors — particularly businesses, financial institutions, cities and regions.
And I have to say that this announcement came immediately after a meeting I had with a representative of civil society that made that suggestion and I found that suggestion a very important work and decided to move forward with it, which demonstrates, how important is the role of civil society in helping decision makers to make the right choices.
It was clear that we had a big gap in the climate space.
A growing number of governments and non-state actors are pledging to be carbon-free – and obviously that’s good news.
The problem is that the criteria and benchmarks for these net-zero commitments have varying levels of rigor and loopholes wide enough to drive a diesel truck through.
We must have zero tolerance for net-zero greenwashing.
Today’s Expert Group report is a how-to guide to ensure credible, accountable net-zero pledges.
It provides clarity in four key areas: environmental integrity; credibility; accountability; and the role of governments.
I will briefly touch on each.
First, on environmental integrity, the Intergovernmental Panel on Climate Change is our scientific North Star.
Net-zero pledges must be in line with IPCC scenarios limiting warming to 1.5 degrees.
That means global emissions must decline by at least 45 per cent by 2030 – and reach net zero by 2050.
Pledges should have interim targets every five years starting in 2025.
And these targets must cover all greenhouse gas emissions and all scopes of emissions.
For financial institutions, this means all financed activities.
For businesses, it means all emissions — direct, indirect and those originating from supply chains.
And for cities and regions, it means all territorial emissions.
The message is clear to all those managing existing voluntary initiatives – as well as CEOs, mayors, governors committing to net-zero:
Abide by this standard and update your guidelines right away – and certainly no later than COP28.
I also have a message to fossil fuel companies and their financial enablers.
So-called ‘net-zero pledges’ that exclude core products and activities are poisoning our planet.
They must thoroughly review their pledges and align them with this new guidance.
Let’s tell it like it is.
Using bogus ‘net-zero’ pledges to cover up massive fossil fuel expansion is reprehensible.
It is rank deception.
This toxic cover-up could push our world over the climate cliff.
The sham must end.
Second, on credibility, full and rapid decarbonization this decade is the ultimate test.
Leaders from business, financial institutions and local authorities need to present transition plans with their net-zero pledges.
These plans should be publicly available, with detailed, concrete actions to meet all targets.
Management must be accountable for delivering on these pledges.
This means publicly advocating for decisive climate action and disclosing all lobbying activity.
The absence of standards, regulations and rigor in voluntary carbon market credits is deeply concerning.
Shadow markets for carbon credits cannot undermine genuine emission reduction efforts, including in the short term.
Targets must be reached through real emissions cuts.
Fossil fuels must be phased out and renewable energy scaled-up.
I thank the Group for providing clarity and details on what businesses, financial institutions, and sub-national authorities need to do to phase-out coal, oil and gas.
As fossil fuel finance is scaled down, climate finance for renewable energy should be scaled up.
Private financial institutions must now fully facilitate investments for a renewable energy revolution, and proactively work with international financial institutions to address issues of cost of capital and risk perceptions, namely the cost of capital in the developing world is something that worries us a lot. Let’s not forget that renewable energy and the concentration of costs in the capital cost, and so to keep high interest rates in developing countries for these projects might kill them and we need to make sure that the international financial system responds to this question.
At the same time, the transition to net-zero must be just.
Transition plans should address the needs of workers in fossil fuel industries and sectors affected by the renewable energy transition.
By the first half of 2023, all existing net-zero voluntary initiatives must explain how they will align and revise their standards accordingly — and all new initiatives must abide by these recommendations.
My climate action team stands ready to assist in this process.
I also ask UN agencies working on developing, implementing, or in any way supporting voluntary pledges, to abide by these standards and criteria.
Third, on accountability, full transparency is critical.
The UNFCCC has a global and public platform — the Global Climate Action Portal – that is already being used to register pledges, publish transition plans, and track annual reporting on implementation.
But it needs to be scaled up.
I call on all net-zero voluntary initiatives to accelerate efforts to standardize progress reports, in an open format and via public platforms that feed into the UNFCCC Portal.
Government or private sector commitments to net-zero cannot be a mere public relations exercise.
We must work together to fill gaps from the lack of universally recognized credible third-party authorities – and we must strengthen mechanisms positioned to conduct this verification and accountability process.
It is my deep belief that the UNFCCC should play a decisive role – and I invite its Executive Secretary to present a plan early next year.
Fourth and finally, governments need to ensure that these voluntary initiatives become the “new normal”.
I urge all government leaders to provide non-state entities with a level playing field to transition to a just, net-zero future.
Solving the climate crisis requires strong political leadership.
The G20 — together with all OECD countries – must accelerate the decarbonization of their economies and end their addiction and subsidies to fossil fuels.
This means they must rapidly regulate, design policies, pass legislation and approve budgets to limit warming to 1.5 degrees.
And I call on all other governments to build a net-zero regulatory environment to fit their needs and national circumstances.
I will closely follow the proposed Task Force on Net-Zero Regulations. I ask that its leadership and membership are as diverse and representative as this High-Level Group.
Once again, I thank the Group for their vital contributions.
You can count on us, and on me in particular, to help move to the net-zero future we need.