Ginny Cleaveland, Deputy Press Secretary, Fossil-Free Finance, Sierra Club, ginny.cleaveland@sierraclub.org, 415-508-8498 (Pacific Time)
SHARM EL SHEIKH — Today, the UN High-Level Expert Group on the Net-Zero Emissions Commitments of Non-State Entities (HLEG) published new guidance on net zero for non-state actors, defining “what it means to be net-zero and net-zero aligned.”
The new guidance sets out clear directions for non-state actors to set credible net-zero pledges, and affirms the need for short-term, science-based targets and transition plans that show immediate emissions reductions and capital expenditures aligned with those targets and a net zero pathway. By far the most important recommendation made by the UN HLEG is the affirmation that continued fossil fuel expansion is fundamentally incompatible with net zero.
In response to the new guidance, Adele Shraiman, Campaign Representative with the Sierra Club’s Fossil Free Finance Campaign, released the following statement:
“The new guidance from the UN High Level Expert Group is essential in affirming what has been clear for a long time – continued fossil fuel expansion is fundamentally incompatible with reaching our net-zero goals. With this new report, the UN Expert Group has provided an invaluable resource for the international community to assess the credibility of net-zero commitments, and the critical elements that make up robust transition plans. With the majority of the global financial sector falling behind on their own climate targets, it is paramount that financial institutions follow this guidance and align their own plans with the recommendations of the UN Expert Group.”
UN HLEG GUIDANCE DETAILS
The guidance recommends that credible net-zero aligned actors:
- Focus on reducing absolute emissions across the entire value chain (Scope 1, 2, and 3) rather than reducing only emissions intensity;
- Do not rely on low-quality or unverified carbon credits instead of immediately cutting their own emissions across their value chain;
- Do not lobby against climate action either directly or through trade associations; and
- Provide financing for scaling up access to renewable energy.
The UN HLEG also provides specific recommendations for financial institutions on financing for fossil fuels, including:
- Immediate end of lending, underwriting, and investments in any companies expanding coal infrastructure, power plants, and mines and a commitment to end financial and advisory services and phase out exposure to the entire coal value chain by 2030 in OECD countries and 2040 in non-OECD countries;
- Commitment to end financing and investing in support of exploration for new oil and gas fields, expansion of oil and gas reserves, and oil and gas production.
Importantly, the guidance stresses the need for government regulation to level the playing field, combat greenwashing, and ensure enforcement and transparency of net-zero pledges.
US BANKS REPORT
A new report by the Sierra Club’s Fossil-Free Finance campaign released ahead of COP 27 analyzes the financial sector’s net-zero emissions pledges two years in the making, revealing that the commitments and actions from the 6 biggest US banks fall far short of what’s needed to meet global climate goals, in large part due to their continued financing of fossil fuel expansion.
The report looks at the banks’ pledges to reach net-zero financed emissions by 2050, membership in the Net Zero Banking Alliance, interim 2030 targets for the oil & gas and power generation sectors, and exclusion policies for high-risk sectors like coal and Arctic oil & gas. The report also lists key standards for 2030 targets and fossil fuel exclusion policies to be considered credible and robust – many of which echo the new guidance published by UN HLEG.
- Read the report here: Leaders or laggards? Report analyzes net-zero pledges of US banks
COP 27 FINANCE DAY
November 9 is Finance Day at COP 27, which means the UN’s leading climate change conference will focus on the financial sector’s role in curbing climate change through regulatory policies from government agencies, voluntary commitments from the private sector, and more.
The Sierra Club’s Fossil-Free Finance campaign website has a useful roundup of its work on US banks and net zero, US federal regulatory agencies’ work on climate-related financial risk, and more.
- Read the blog here: Finance Day at COP 27: Net zero, climate disclosures, and more
About the Sierra Club
The Sierra Club is America’s largest and most influential grassroots environmental organization, with millions of members and supporters. In addition to protecting every person's right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information, visit www.sierraclub.org.