Current climate standards are not sufficiently incentivising the “big-picture innovations” necessary to deliver net zero and should be expanded to include companies’ broader influence on climate action, experts from Oxford Net Zero have said. A new paper from the Smith School of Enterprise and the Environment discussed actions that companies can take to accelerate the global transition to net zero across three spheres of influence: product power, purchasing and political power, and additional reporting to capture impact in these areas. These actions would demonstrate companies’ wider contributions to net zero, including lobbying for cleaner energy systems or signalling financial support for new net-zero technologies. The research comes after a period of fierce public debate about climate standards, and aims to help those seeking to improve both integrity and impact of corporate climate action. “To date, corporate climate standards have been created primarily to guide companies in setting targets (e.g. through the Science Based Targets initiative) and to help them track emissions resulting from their own activities (e.g. using the Greenhouse Gas Protocol),” the paper mentioned. “While these standards have been essential for reducing the emissions of individual companies, they fail to incentivise broader climate action and can even discourage it.” Of the world’s 2,000 largest companies, close to half still lack net-zero targets, while some are “going further without reward”, argued co-author Matilda Becker – Strategic Partnerships Manager at Oxford Net Zero. Companies’ efforts should be further incentivised. “It is essential that companies report and reduce emissions across their value chains,” said co-author Claire Wigg, Head of Climate Performance Practice at the Exponential Roadmap Initiative. Lead author Kaya Axelsson, Research Fellow and Head of Policy and Partnerships at the Smith School, highlighted the need for a better method to compare and reward companies that are changing the world – not just their operations. “The way standards are currently set up, a high-growth renewable energy company might fare poorly because of the emissions generated in making turbines and solar panels, despite the fact these products can help to reduce emissions globally,” she said.
