We need net zero policies to help turn climate promises into reality

The surge of climate action commitments in recent years has sent a resounding message that businesses, investors, cities and regions are willing and determined to create a healthier and more resilient global net zero emissions future by 2050, in the context of sustainable development and poverty eradication.

Now we need them to raise their voices in asking governments to set fair, just and clear net zero ground rules, regulations and socio-economic incentives – thereby ensuring an inclusive, just and collaborative transition across the whole of society.

This needs to start now – from this week’s Climate Week NYC and UN Secretary-General’s Climate Ambition Summit, through to the COP28 climate conference in the United Arab Emirates starting on November 30 – in order to demonstrate to governments that net zero rules, regulations and incentives are feasible and have the potential to stimulate low-emissions, climate-resilient development.

The problem is that voluntary commitments are still not translating into the scale of real emissions reductions and resilience we need, as made clear in the report released this month on the UN’s global stocktake of progress towards the Paris climate agreement. The report emphasized that while systems transformations generate many opportunities, rapid change can be disruptive, and called for a focus on inclusion and equity while increasing ambition in climate action.

According to the IPCC, reaching net zero by 2050 requires halving emissions by 2030. That requires commitments to be implemented and ramped up quickly.

The ground is therefore ripe for net zero rules, regulations and incentives. The recent groundswell of voluntary commitments has built common norms, aligning actors behind common criteria and signalling to governments that climate action is feasible and presents sustainable development opportunities. Since launching in 2020, the partners of the Race to Zero campaign have mobilized over 12,000 businesses, investors, cities, regions, healthcare facilities and academic institutions behind robust, science-based commitments to halve emissions by 2030.

However, voluntary action can only go so far. Government policies will help to ensure these commitments are fulfilled, supported, and strengthened. They will create a level playing field across regions and industries, drive innovation, reward first-movers, and unlock investment while recognising the principles of the UN Framework Convention on Climate Change (UNFCCC) and Paris Agreement.

The UN Climate Change High-Level Champions are already working with partners to encourage greater advocacy. They put out a call to action in June for businesses, investors, cities, regions and civil society to join the Race to Zero and align their advocacy, policy and engagement with net zero goals. The Race to Zero also released The 5th P (Persuade) Handbook setting out best practices for advocacy, policy and engagement and showcasing examples of leadership.

Momentum towards net zero policymaking

Momentum is building from both the public and private sectors.

The International Sustainability Standards Board, responsible for setting standards for the private sector and backed by the G7, the G20 and the International Organization of Securities Commissions, issued new standards in June for the disclosure of climate-related risks and opportunities by companies. The standards will lead to climate-related risk disclosures across capital markets worldwide, and bolster trust in those disclosures.

The Australian government announced in May the creation of a Net Zero Authority responsible for promoting the “orderly and positive” economic transformation to net zero emissions. It will help investors and companies take advantage of net zero opportunities.

In the European Union, the new Corporate Sustainability Reporting Directive will require companies to substantially enhance their reporting on climate risks and targets from 2024. In addition, the European Commission in March proposed the Net-Zero Industry Act to strengthen the bloc’s capacity to manufacture net zero technologies. The US Securities and Exchange Commission, similarly, has proposed requiring companies to make specific climate-related disclosures in their reporting.

Building on this development, the US state of California passed a bill in September that could become the first law in the US to force companies to publicly report their greenhouse gas emissions. Businesses like Apple helped to get this bill over the line by voicing their support, demonstrating the critical role of business in undertaking responsible climate advocacy.

As the 5th P (Persuade) Handbook highlights, some businesses, investors and sub-national governments are already advocating for net zero policies too, including H&M, Microsoft, a coalition of 55 African CEOs, and the Investor Agenda coalition of over 600 investors. Yet, corporate lobbying against climate regulation persists worldwide, including in opposition to power plant emissions standards in the US and in support of fossil fuel investments in Australia, the EU and Africa, according to InfluenceMap.

The global stocktake report highlights the gap in climate action thus far, but it also shows what is working and needs to be scaled up. It makes clear that this is the moment for governments, the private sector, civil society, indigenous leaders, youth and others to all do their part, collaboratively, in getting society on track to halve emissions by 2030 while reflecting equity, different national circumstance and the principles of the UNFCCC and Paris Agreement.