Deciphering best practice in climate action
By Climate Champions | April 20, 2022
Join us at the public session on the Criteria Consultation process on Friday 22 April, 13:00 – 14:00 BST to hear more and find out how you can still contribute to the consultation over the next four weeks.
Experts, scientists, academics and practitioners from around the world are coming together to help continue to drive upward convergence around best practice in climate action.
Convened by the UN Climate Change High-Level Champions, a series of working groups are tackling how to strengthen, update, consolidate and provide additional clarity and transparency for the work of the Race to Zero. The process is designed to signpost to existing guidance where applicable rather than duplicate, and to explore new recommendations and requirements where needed, in line with a 1.5C science-based pathway to a net zero state.
These working group discussions have taken place over the last eight weeks, focusing on eight topics: Net Zero Finance and Disclosure; Fair Share, Equity & Justice; Fossil Fuels & Non-CO2 gases; Nature, Land Use, and Deforestation; Scope 3, Boundaries & Historical emissions; and Offsets, Carbon Removals and Responsible Communication of Claims.
Net Zero Finance and Disclosure
Acting in their individual capacities for the net zero finance and disclosure working group, members included, among others, Reclaim Finance, Carbon Tracker, Sunrise Project and UNEP FI.
One of the major themes that emerged from this working group was the timeline for non-state actor climate commitments. Members discussed the need for Race to Zero criteria to include milestones towards halving emissions by 2030 and not longer-term targets such as 2050.
Other key requirements agreed on included baseline emissions disclosure, governance, financial reporting and policy lobbying alignment.
Relating to the ongoing debate as to what actually is the “starting line” or leadership criteria for non-state actors taking climate action, there was also discussion around absolute versus intensity targets.
On net zero finance specifically, the working group laid out its intentions to clarify what should not be financed, for example new oil and gas reserves, as well as what should be: renewables.
On leadership practice, the group agreed on the need to enhance financial institution approaches towards Scope 3 emissions as well as climate stewardship. They also recognized the need for just transitions and equitable finance for developing countries.
Fair Share, Equity & Justice
Discussions from this working group have focused on four main considerations: Definition and operationalization; Finance and capacity-building; Transparency and reporting; and Community engagement, participation and inclusion.
On definition and operationalization, the group agreed to help provide clarity around what Fair Share, Equity and Justice actually mean. These definitions, they agreed, would then be used to create practical and applicable guidelines for the campaign’s members.
Because of the wide range of members, the group agreed the criteria must be inclusive but also hold stakeholders to account and maintain integrity. The group also supported a more holistic approach that’s not only focused on emissions but also on the impact of net zero in the overall development of communities.
On finance and capacity-building, the group agreed on the need for nuanced evaluative criteria that address different members’ resources and capacities. Other consensus related to issues of financing and investment in planning action, especially the distinct roles of governments, financial institutions and the private sector.
On transparency and reporting, the group agreed that both the minimum criteria and leadership principles should include provisions for members to explain publicly how they believe their target represents their Fair Share contribution. This, they suggested, should draw from scientifically backed and differentiated responsibilities accounting for historical emissions and individual capacities. When discussing the leadership principles of Empowerment and Equity, the group agreed it was important to encourage actors to think about the broader societal consequences and impacts of their actions, and to include this in their evaluations and reporting.
On community engagement, participation and inclusion, a clear priority for the working group was building inroads into forefront marginalized and/or underrepresented communities, such as the economically disadvantaged, youth, gender, LGBTQ+ and other intersectional impacts. To do this, the group agreed it would need to include the promotion of bottom-up, community-led initiatives as a core leadership principle.
As part of the minimum criteria, the group recommended that members should be able to concretely explain how they will support more vulnerable communities in their net zero planning, seeking to address injustices and build towards a more equitable future.
Fossil Fuels & Non-CO2 Gases
A major theme of the conversations in this group centred on how to find consensus within and build upon already existing guidance and scenarios. This group is approaching the key questions by breaking down the topic into three general categories: coal; oil and gas; and non-CO2 gases.
On coal, there is an emerging, relatively clear, consensus around temporal guidance, including the need to phase out unabated coal by 2030 in the power sector.
For oil and gas, there was a significant amount of discussion and some disagreement on whether guidance could be provided in a way that would enable oil and gas companies to join the Race to Zero campaign. With oil and gas, this working group has begun providing suggestions to the pledge, plan, proceed and publish wording of the starting line criteria to include scenario, emission intensity, and interim target considerations.
On non-CO2 gases, the group agreed on the need to specify temporal and sectoral targets for non-CO2 gases, especially methane. Members also acknowledged that guidance should not get too specific for non-CO2 gases beyond methane. Lastly, the working group emphasised the importance of collaboration across the working groups, particularly with finance, equity and justice, and scope 3.
Nature, Land Use, and Deforestation Working Group
Pledges from a narrow focus on emission reductions to a broader view that nature should be included in members’ risk assessments and assessments of value chains and other impacts, agreed this working group.
Other important issues included how to incorporate broader environmental safeguards and the need for more discussion on the ‘like for like’ definition and its stipulations in the Race to Zero criteria. Additional topics that the working group is currently focused on include how Race to Zero members can be encouraged to:
- Reduce CH4 and N2O emissions from agriculture and increase soil carbon removal within company value chains;
- Protect forests, wetlands, and other natural ecosystems in company value chains and surrounding/ impacted areas;
- Restore forest, wetlands, and other natural ecosystems, including landscape/jurisdictional approaches;
- Support social safeguards for healthy, inclusive, and resilient livelihoods and economies.
Scope 3, Boundaries & Historical emissions
The Scope 3, Boundaries & Historical emissions working group has had a series of useful and dynamic discussions to date, primarily delving into Data availability; Historical emissions; Materiality; and inclusiveness of SMEs.
On data availability, there was broad agreement that the current criteria language should actively encourage actors to transparently estimate what their scope 3 amounts to in order to narrow data gaps.
In addition, it was suggested that leadership practices actively encourage the development of a credible plan to fill in data gaps and enhance the overall data quality in the future.
On historical emissions, there’s been general agreement that these are less vital from a forward-looking perspective and therefore do not need to be included in the starting line criteria but should be kept as a leadership practice.
On inclusiveness of SMEs, two possible options were proposed: establishing baseline criteria that small businesses can feasibly meet and establishing a more ambitious baseline criteria for larger businesses and a separate track for SMEs, like SBTi has done. —
Offsets, carbon removals and Responsible communication of claims
The Offsets, Removals and Responsible Communication of Claims group has tackled the complex and often contentious issue of how to deal with ‘offsets’, removals and responsibly communicating transparent claims around net zero.
This group strongly agrees on the importance of Race to Zero more proactively engaging in this space, explicitly encouraging its entities to invest in beyond value chain mitigation, in parallel to an entity’s own emissions reduction targets. The group has been discussing what suggested actions could be included in this guidance around beyond value chain mitigation.
In parallel, discussions regarding the quality criteria for carbon credits are ongoing, with separate groups working on both the supply and demand sides.
Other discussions have highlighted the need to enhance transparency by creating separate targets for reductions and compensation or neutralisation efforts, and ensuring the language used in the criteria is clear, instructive and all encompassing. This means looking to reduce ambiguity in the terms used, adding concrete thresholds such as limits on the quantity of credits that can be used and setting out priority actions.
Transition Plans and immediate action
The last topic – though by no means least – addressed in this consultation was Transition Plans and Immediate Action. This group strongly agreed on the need for clearer language around requirements for a satisfactory transition plan, recognising the plethora of very valuable guidance already published by a range of institutions.
Moreover, the discussions led to debating the level of detail which should be required of members in a plan, though high-level principles which the group agreed were critical included elements such as investment disclosure, policy and advocacy, nature & biodiversity conservation and the inclusion of clear intermediate targets.
This group has identified clear suggestions for members to take immediate action in order to meet both their short term and long term targets, whilst also recognising that these actions will vary depending on sector, region, actor type etc.
Overall, the group was keen to carefully consider how to enhance guidance and recommendations in the leadership principles whilst also encouraging inclusivity and fairness at a minimum entry level.