Thursday, 14 November 2024 - The Taskforce on Net Zero Policy – an initiative to take forward key elements of the UN Secretary General’s High Level Expert Group on the Net Zero Emissions Commitments of Non-State Entities (HLEG) – has today published its inaugural report, taking stock of the global policy environment governing the net zero activities of large corporates and financial institutions.
The report, Net Zero Policy Matters: Assessing Progress and Taking Stock of Corporate and Financial Net Zero Policy, found encouraging signs. Progress on net zero policy is advancing at pace in a significant number of regions around the world. However, the policy landscape is still insufficiently aligned with a 1.5°c future, consistent with ongoing global misalignment with the goals of the Paris Climate Agreement.
The Taskforce’s research, which assessed more than 1,000 policy instruments across the G20 and is among the first reports of its kind to comprehensively assess the global policy environment at scale, found that policy formation is more widespread than may have previously been expected. All G20 countries have some form of policies that support non-state actor’s (NSA’s) transition to net zero – and the number of NSA focussed policies has tripled since 2020.
Likewise, the research found increasing examples of real economy policies that place requirements or obligations on companies and financial institutions to act on net zero, often in emerging markets, such as in South Africa. Examples include policies related to fossil fuels and renewable energy, land use and deforestation.
Furthermore, efforts on implementing actionable sustainable finance measures, like taxonomies and transition plans, has advanced around the globe, with the EU moving most quickly but with other countries also making progress —and adding their own priorities for the transition to climate goals.
Examples can be seen in Brazil, Indonesia and Mexico’s efforts to expand the focus of their taxonomies to include issues such as land use, social goals and gender equality issues, demonstrating engagement with wider sustainability issues related to the transition.
However, the overall progress of policy reforms remains insufficient to align the activities of large corporates with a 1.5°C goal. None of the nine UN HLEG recommendations are fully reflected in policy frameworks across the G20, which indicates a policy gap in ensuring the integrity of net zero action by NSAs.
The Taskforce found that a minority of corporate and financial policies clearly articulate a link to the 1.5°C limit – and those that do relate to risk-based scenario analysis frameworks, notably in Australia and the UK.
While issues around nature, adaptation and social objectives are increasingly being considered by policymakers, they are not yes systematically addressed across net zero policies regulating companies and financial institutions. This is a weak spot that hampers effective action on these objectives
Finally, the Taskforce found that while the implementation of the “Do No Significant Harm” principle is a positive step, a comprehensive concept of climate-related justice—one that prioritises the needs of vulnerable communities—is still largely missing from policies governing the activities of non-state actors. The policy gap is exacerbated by the absence of an imperative highlighting the right to sustainable development for emerging and developing economies.
These findings provide a comprehensive overview of the current state of play on net zero policy formation on a global scale and serve as a vital impetus for further action among global policymakers. Against this backdrop, the Taskforce will continue its operations in 2025 with a view to promoting outreach and learning and will report back on the outputs of this work at COP30.
Commenting on the findings, Taskforce Co-Chair Helena Vines Fiestas said: “Our research presents a mixed picture. On one hand we should be encouraged - policy action is accelerating and broadening in most G20 countries and the actions undertaken so far indicate that net zero is increasingly forming a core component of policy and regulatory formation. But there is no escaping the fact that the steps we’ve seen are not enough to align us with the goals of the Paris Climate Agreement. We’re already off track for 1.5c and to have any hope of correcting our course, we need to see this policy gap closed.”
Taskforce Co-Chair Andrea Meza Murillo commented: “It’s clear that, while we’ve seen the focus of non-state actor-related policy begin to expand, there are still blind spots that urgently need to be addressed. No transition can be fully effective without consideration of land-nature, adaptation and social justice issues. By facilitating corporates and financial institutions to orient their activity and account for these issues, policymakers have an opportunity to mount a truly systemic response to the transition which benefits economies and societies the world over.”
David Atkin, CEO at the Principles for Responsible Investment, which serves as Secretariat for the Taskforce, commented: “The PRI is proud to support the work of the Taskforce on Net Zero Policy. The Taskforce’s work delivers groundbreaking insight on how net zero policy is shaping the ongoing work of non-state actors, including investors. This opens up invaluable new conversations on how we shape the formation of a truly enabling global policy environment. This topic is one of PRI’s top strategic priorities and we look forward to continuing to support these efforts, as well as advocating for our signatories’ needs as the global policy environment continues to evolve.”
Taskforce Ambassador and CEO of the European Climate Foundation, Laurence Tubiana, commented: “The findings of the first reports of the Taskforce on Net Zero Policy show very clearly - that net zero policies matter. Nearly all the G20, and many other countries have set net zero targets. But countries can only reach their long-term net zero and short-term NDC plans if companies, financial institutions, and cities and regions – many of whom have their own net zero targets - work together. COP29, and COP30, which will be 10 years since the Paris Agreement, present a critical opportunity for policymakers to learn from the best practice examples of net zero policy in this report, and to embed robust net zero policies to deliver a safer and more prosperous future for us all.”
HLEG Chair and Taskforce Board of Trustees member, Catherine McKenna, commented: “In the two years since the ‘Integrity Matters’ report, it is heartening to see the progress that has been made globally on government policy with respect to net zero pledges of businesses, investors, cities and regions. Leaders have shown that regulating Net Zero commitments can be done; and in fact many large companies are already preparing for mandatory disclosures. It’s now time for all G20 countries to implement policies that ensure non-state actors have clear direction to move ahead with high-integrity Net Zero commitments.”
Her Excellency Razan Khalifa Al Mubarak, UN Climate Change High-Level Champion for COP28, commented: “Reaching a nature-positive, net-zero future requires a whole-of-society approach, with an enabling policy environment that supports non-state actors in leading climate action. At the heart of Race to Zero’s mission is the need to pivot from voluntary action to rules and regulations that deliver a just transition, protect and restore nature, and benefit women, girls, and Indigenous Peoples. As this report by the task force shows, momentum is underway; yet more action is needed to fully establish this enabling environment.”
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NOTES TO EDITORS
Download the Taskforce’s reports.
About the Taskforce on Net Zero Policy
The Taskforce on Net Zero Policy was established at COP28 to further the aims of the High‑Level Expert Group on the Net Zero Emissions Commitments of Non-State Entities (HLEG). With a remit to facilitate the HLEG’s recommendations to “accelerate the road to regulation” – in other words, to facilitate the formation of an enabling policy environment which allows non-state actors to facilitate their own shift to a net zero future.
The Taskforce aims to:
- Establish a collaborative space that encourages the sharing of knowledge, practices, and insights among policymakers and regulators.
- Provide research and technical support, particularly in policy areas which support the net zero transition in a way that is consistent with the HLEG recommendations and that also works for companies of all sizes and addresses the needs of middle and low income and the most vulnerable countries.
- Identify opportunities within regulatory frameworks that support the implementation of the HLEG recommendations.
The Taskforce is governed by a Board of Trustees and supported by the Principles for Responsible Investment in a secretariat capacity.
