Catherine McKenna just upped the ‘price of admission’ for making net-zero promises

The United Nations is cracking down on greenwashing, and Catherine McKenna is leading the charge.

The former environment minister chairs the UN’s High-Level Expert Group (HLEG), which published a report Tuesday outlining what a credible plan to achieve net-zero greenhouse gas emissions should look like. At the centre of the report are 10 recommendations that collectively urge companies, cities and other non-state actors who make net-zero commitments to align their business models and investments with scientific pathways to hold global warming at 1.5 C.

“If you're going to make a net-zero commitment, you can't just say that you have a 2050 target; that's the easy part,” McKenna told Canada’s National Observer in an interview Tuesday.

Instead, McKenna stressed that net-zero commitments require actually reducing planet-warming emissions. Moreover, she said any organization making net-zero pledges can’t also be supporting the expansion of fossil fuels like coal, oil and gas.

“There's a price of admission to say net-zero; you're either part of the solution or part of the problem,” she said.

Other recommendations in the report say organizations must set short-term targets to lower emissions because climate science requires global emissions to drop by approximately half by 2030 if there is any hope of staying onside of 1.5 C. That means technologies that don’t work as advertised — like carbon capture technology or experimental next-generation nuclear reactors — don’t have a place in a credible 2030 target.

The report also says companies and cities can’t buy their way to net zero with carbon offsets; they need to genuinely reduce their own emissions and the emissions they finance. Companies must also create transition plans for their business models, including phasing out fossil fuels and scaling up renewable energy projects, and align their lobbying with climate solutions instead of delay tactics.

UN Secretary General António Guterres appointed McKenna to the role earlier this year, and explained why Tuesday at an event discussing the report during the UN’s COP27 climate conference.

Existing net-zero commitments “have loopholes wide enough to drive a diesel truck through," he said. "We must have zero tolerance for net-zero greenwashing."

Guterres called the Intergovernmental Panel on Climate Change (IPCC) — a group of scientists whose reports are considered the gold standard for climate science — “our scientific north star,” adding: “Net-zero pledges must be in line with the IPCC scenarios limiting warming to 1.5 C.”

Environmental Defence senior manager for climate finance Julie Segal applauded the HLEG report, noting “greenwashing” is a term that’s sometimes criticized as being overused. This report puts clear guidelines on what constitutes greenwashing and could restore credibility to net-zero commitments.

“The next step is now to put that in regulation and policy so none of Canada's banks or pensions can move in the wrong direction,” she said. “We need all of our policymakers and regulators from the financial sector, from the environment regulators … to come together and say this is what the financial sector needs to do to move forward to net zero and nothing else is acceptable.”

Many Canadian companies would be at risk if these recommendations became policy. For example, Canada’s largest bank, RBC, has made net-zero promises and set emission-reduction targets for 2030 that do not guarantee an overall drop in emissions. Despite setting these goals and signing onto the Glasgow Financial Alliance for Net Zero (GFANZ) — an international club whose members have a combined $130 trillion and pledge to speed up the decarbonization of the economy — RBC has continued pumping billions of dollars into new fossil fuel projects in 2022.

The bank is also under investigation from Competition Bureau Canada over allegedly greenwashing its products, meaning it could face a financial penalty for making climate promises that are undermined through its investments.

But the new recommendations also reveal a rift between McKenna’s HLEG and GFANZ — two different UN-affiliated bodies — and their understanding of net zero. Last month, GFANZ, chaired by former Bank of Canada governor Mark Carney, walked back its commitment to the UN’s Race to Zero campaign, which would have required members like RBC to phase out fossil fuels. Carney acknowledged tension in the alliance over any binding rules that would force its members to meaningfully clean up their portfolios.

“Race to Zero and HLEG set a line in the sand, which says we want you to stop funding new coal, oil and gas, and I think that price was too high, and the price was going to split the GFANZ coalition,” Carbon Tracker founder and member of GFANZ’s advisory board Mark Campanale told Canada’s National Observer.

“What I find very interesting about Catherine McKenna's speech today is that it's now freed up the UN secretary general's team to go back and retrench themselves on the no new fossil fuels and say it again,” he said. “It allows the secretary general and Catherine McKenna and others to be much more ambitious in their statements.”

Financial institutions “just don't want to be tied down to … announcing we're not going to fund new fossil fuels. It's a real shame for me because I think that's the key metric, but that's where they're at at the moment,” he added.

Segal said GFANZ has been a “boom and a fizzle” since it was officially launched last year at COP26. Because GFANZ is trying to pull away from scientific metrics for its members, it's losing credibility, she said.

Campanale agreed scientific metrics are what matter most. Too many companies are setting net-zero by 2050 targets while planning to increase their emissions over the coming decade, he said.

“Then all the emissions reductions that you need ... are all suddenly going to get deployed in the 2040s, and as if by magic you accelerate to net zero by 2050? What this group is saying is that's a load of baloney; it's not credible.

“People are being a little bit cute about emissions cuts phrasing,” he added. “What that translates into is absolute production cuts. You can't have emission cuts without production cuts.”