Corporate pushback against climate action is getting desperate

It’s not every day that professors are told they risk breaking the law for articulating basic scientific facts. But that’s the reality of giving expert advice in the deepening climate crisis.

As net zero commitments reshape the world economy, and as the impacts of climate change accelerate, climate politics is getting existential. Vulnerable communities are fighting to survive. This month, one-third of Pakistan, a country of 220 million people, was flooded. At the same time, fossil fuel interest groups – coal, in particular – are trying every tactic to delay the inevitable.

Capitalism has become the battleground for this conflict. Over the past decades, a groundswell of voluntary action on climate change has surged around the world. According to the Net Zero Tracker, one in three of the world’s 2,000 largest companies now has a net zero target, up from one in five in 2021.

Some of these targets are credible; many are not. To mobilise action and combat greenwashing, a host of initiatives, standards, and regulations have arisen to define science-based pathways to net zero and hold companies accountable for meeting them.

One such initiative is the Race to Zero campaign, which commits companies, investors, cities, regions, and others to reach net zero by mid-century or sooner. To join, these entities need to meet science-based criteria as defined by an independent advisory group of experts, which I co-chair (a voluntary, unpaid position).

Over the past two years, tens of thousands of actors have joined the Race to Zero through its partner networks like the Science Based Targets Initiative or the various finance initiatives that make up the Glasgow Financial Alliance for Net Zero (Gfanz). The latter now accounts for some $130 trillion in assets.

But as climate action has become more widespread and more rigorous – moving from university endowments and pension funds to globally systemic financial institutions – the pushback has become more desperate.

Fossil-friendly politicians now decry sensible corporate transition planning as “woke capitalism,” as if the basic economic realities of climate risk were just a point of view, not something rooted in the global scientific consensus and hard-nosed economic analysis.

More nefariously, but perhaps predictably, given the existential threat they face, opponents of decarbonisation are seeking ways to twist the basic rules of the economy to delay climate action.

For example, stock regulators around the world are increasingly requiring companies to measure and disclose the risks they face from climate change and decarbonisation in order to protect investors. But fossil fuel interests have sought to weaken this basic transparency requirement, hurting the ability of markets to function.

Absurdly, this pushback has now reached the expert advisory group I co-chair. We received independent legal advice that some wording in a technical set of “rules of thumb” we published to make our advice more predictable and transparent could potentially be construed as violating anti-competition laws. The offence? Simply being explicit that expanding coal production is not a part of any credible scientific scenarios to achieving the goals of the Paris Agreement.

We took immediate action to revise the wording to ensure that there is absolutely no question that we and the Race to Zero’s members are in full compliance with the law, while continuing to underscore the science. But the fact that we had to make these changes at all shows two realities.

First, as climate politics get existential, the battle over corporate climate action is going to get more intense. Vested interests are pushing back, hard. Hiding behind flimsy legal pretext will not work. Companies with fuzzy net zero targets, trying to keep both sides happy, will be in the crosshairs. Clarity and rigour are needed.

Two, the rules governing the economy need to catch up to our climate goals. The fact that anti-competition law, created to safeguard the public interest, could be manipulated to work against it shows the need for urgent reform. Credible voluntary action builds momentum for these changes, but regulators need to step up.

The good news is that regulatory reform is now at the top of the agenda, featuring in a report launched this week. Before the next global climate summit takes place in Egypt in November, a high level panel appointed by the UN Secretary-General, chaired by former Canadian environment minister Catherine McKenna, is set to lay out a global review of net zero targets and identify ways forward.

Without prejudging the report, I predict it will state again what thousands of experts have already affirmed: any credible path to net zero requires phasing fossil fuels down and out. Surely they can’t sue all of us?