In order to best protect their shareholders, beneficiaries and other stakeholders from the systemic risks of climate change, leading companies and investors are increasingly setting and pursuing ‘Paris-alignment’ or ‘net-zero’ objectives and strategies. Currently, a wide variety of methodologies are used to set and assess such strategies. This flexibility is useful in helping to drive ambition. Unfortunately, it also creates a significant risk that ‘greenwash’ will undermine real action. Over time, improvements and standardisation of methodologies will help to address this problem. In the interim, lack of a perfect approach should not be an excuse for delay.
To ensure that bold ambition is translated into real action, ClientEarth believe that a principles-based approach, supported by clear, non-negotiable ‘Red lines’ can help strike the required balance between flexibility and credibility. Based on a review of existing methodologies, in this Position Paper, ClientEarth proposes three overarching ‘Paris-alignment principles’ and 10(+1) corresponding ‘Red lines’, that should underpin all ‘Paris-alignment’ or ‘net-zero’ claims, initiatives and legislative interventions.