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Net-zero pledges have become commonplace among corporations, financial institutions and cities, but questions abound as to whether those companies and governments have real plans in place to achieve them. In many cases, corporations or local governments don’t yet know how they will achieve net-zero status by 2050.
The UAE is already proving a petro -state can transition toward netzero, says Luma Saqqaf, CEO of Ajyal Sustainability Consulting, but tough challenges remain. In March 2023, the UAE confirmed its netzero target as a domestic policy objective by signing the ‘ UAE Governments NetZero 2050 Charter ’.
In the coming weeks, lawmakers are set to consider two key pieces of legislation that would provide consumers, investors, and other stakeholders with information about how companies are managing the financial risks and opportunities from climatechange. Corporate support for the legislation has been growing this year.
Planned guidance for wider engagement themes and tweaks to the NetZero Company Benchmark, but inconsistent voting records limiting intended impact. When the initiative launched at the end of 2017, just five of the focus companies had set netzero commitments.
Governments are being called on to put some regulatory muscle behind corporatenet-zero pledges to ensure they don’t amount to mere greenwashing. . It comes at a challenging time for those who want more aggressive climate action. . We must have zero tolerance for net-zero greenwashing. -UN
Speaking at COP27 in Egypt last year, UN Secretary General António Guterres was clear: “the criteria and benchmarks for… netzero commitments have varying levels of rigor, and loopholes wide enough to drive a diesel truck through. We must have zero tolerance for netzero greenwashing.”
Climate-related scenario analysis includes how firms perform and behave under 1.5°C-aligned C-aligned paths and policies compared with business as usual, as well as the risks and opportunities for different scenarios, according to Carney, also Co-chair for the Glasgow Finance Alliance for NetZero (GFANZ).
Stemming from Athens University, the Hub will bring together scholars and researchers from around the world to work collaboratively to address the most pressing challenges related to climatechange and to identify sustainable pathways through the instruments of technology, finance, and policy.
“The current lack of [standardisation] poses a significant cost to asset owners and limits their ability to incorporate these issues into investment decision-making,” says the UN-convened NetZero Asset Owner Alliance (NZAOA), a group of 74 institutional investors with US$10.6 trillion in assets. .
Quitting climate alliances risks trust and transparency, says Ramnath Iyer, IEEFA ‘ s Sustainable Finance Lead for Asia. While they maintain that their climate goals remain unchanged, these exits from climate alliances have raised questions about the consistency and credibility of those commitments.
But irrespective of the political impulse in Washington, we expect resilience to be a critical focus, transcending divides and spanning climate, social and environmental issues. All of these endanger corporates bottom lines and translate into systemic risks for financial institutions.
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