COP28

UNFCCC on the Edge  

The UN’s Recognition and Accountability Framework seeks to bring rigour and transparency to corporates’ net zero plans, but politics could get in the way.  

Since a breakthrough at COP20 in Lima, the role of non-state actors – including cities, states, regions, companies, investors and foundations – in the United Nations Framework Convention on Climate Change (UNFCCC) process has been a tentative, but long-fought-for journey in support of efforts to keep global average temperatures below 2°C, in line with the Paris Accord.  

On the one hand, there’s recognition that while the Paris Agreement is a policy structure that binds countries (or ‘parties’), a bulk of carbon emissions lie with other entities, such as companies and cities. On the other hand, these entities sit “on the edge” of the UNFCCC’s mandate, explains Antoine Gillod, Director of the Observatory at civil-society convener Climate Chance, meaning it lacks firm teeth to drive action.   

Nevertheless, progress by the UNFCCC has been steady – a milestone was achieved at COP21 in Paris with the creation of the Non-State Actor Zone for Climate Action, now the Global Climate Action Portal (GCAP), that highlights actions non-state actors are taking to address climate change. The following year at COP22 in Morrocco, the Marrakech Partnership for Global Climate Action was formed to enable collaboration between governments and the cities, regions, businesses and investors, with GCAP and other related initiatives such as Race to Zero under its umbrella.  

But the biggest shift came last year, explains Kate Levick, Associate Director of Sustainable Finance at climate change think tank E3G, when UN Secretary General Antonio Guterres came to COP27 in Sharm El Sheik, with the results of his High-Level Expert Group (HLEG) Taskforce on Net Zero Commitments by Non-State Entities chaired by Catherine McKenna, former Canadian Minister of the Environment. Its ‘Integrity Matters’ report, dubbed by Guterres “a how-to guide for credible, accountable net zero pledges”, was followed by the UNFCCC unveiling its Recognition and Accountability Framework (RAF) seven months later at its Bonn Climate Conference in June of this year.   

Gillod from Climate Chance explains that the RAF reflects the need for a shift from the ambition of the Paris Agreement to tangible action and implementation.  

“Accountability is not only a way to deliver investors with the proper data to make the choice in terms of risk management and opportunities regarding climate-related financial information,” he says. “But also to make sure that companies are in compliance with their targets and that they are on the right pathway.” 

In short, it can hold them to their stated net zero commitments.  

“This is what’s cruelly lacking at the moment.”  

Limits to UNFCCC mandate 

The RAF, which has been under consultation until this month, is expected to be part of discussions at COP28, starting tomorrow (November 30), with a progress report on the implementation of its accountability framework. If approved, it will lead to the setting up of RAF as a standardised template for organisations to submit their net zero pledges and transition plans for publication in GCAP, says Gillod.   

But, Gillod is also cautious about how much impact the UNFCCC’s RAF can actually have. “It [UNFCCC] has limited monitoring power over non-state actors.” he says, adding that “the coercion capacity” of the UN and its affiliated agencies remain very low. “At the end of the day, the implementation of the HLEG recommendations and the strengthening of the accountability framework are in the national states’ hands.” 

Gillod adds that at the Bonn Climate Conference in June, some states including the US and Saudi Arabia, were “very reluctant to see such a framework”. “It [RAF] won’t be top of the agenda at COP, but we hope to see some progress,” he says.  

Levick from E3G agrees that RAF didn’t have “an initial widely enthusiastic reaction” at Bonn, but she adds it’s significant that the UNFCCC has put two high-powered financial regulators from the US and China in charge of the RAF consultation – Sarah Bloom Raskin, former Deputy Secretary of the United States Department of the Treasury and Bing Lee, member of the International Sustainability Standards Board.  

The move, she says, helps make the link between countries needing to use regulation to drive climate action from non-state actors.  

“One source of truth”  

The consultation on the RAF, now closed, elicited broad support from some 35 respondents, though the United States Council for International Business said it is outside the mandate of the UNFCCC and the International Chambers of Commerce has said that business has not been engaged enough during RAF’s development.   

The Investor Agenda, a coalition of key sustainability bodies such as the UN-convened Principles for Responsible Investment, UNEP FI and the Institutional Investors Group on Climate Change, supports the RAF, but stresses it should avoid reporting duplication and does not believe the scope of the RAF should cover individual actors.  

Speaking to ESG Investor, Rev. Kirsten Snow Spalding, Vice President at Investor Agenda member Ceres, explains it wants UNFCCC to focus on the initiative level – the likes of Net Zero Asset Managers initiative or the Paris Aligned Asset Owners – rather than “becoming a scorecard for individual investors”.  

“We are encouraging that the UNFCCC take a high-level approach, aggregate commitments, and ensure that the initiatives themselves are creating the right accountability mechanisms,” she says.  

Ultimately, the RAF is seen as filling a gap of credible and comparable analysis of net zero and transition plans from companies, but also from local governments, says Gillod.  

“When you look at what companies are really doing to implement their commitments,” he says, “you realise there is a huge discrepancy in terms of methodology of each of these actors when it comes to measuring their ambitions, setting their objectives and targets and then having a transition plan to deliver their own targets. It makes it all very difficult to have aggregate data available to understand the contribution of companies at a global level to the global targets.  

“The framework is a way for non-state actors to deliver their results in the same language as each other.”  

John Lang, Project Lead at the Net Zero Tracker, agrees, saying “in essence, we need one source of the truth”. He says the RAF should be able to present data in an impartial, transparent, uniform and comparable way, with other initiatives taking on the role of providing the data, as well of the separate role of analysis and verification, “which the UNFCCC is not best placed to do”.  

Net Zero Tracker’s 2023 Stocktake assessed the net zero commitments of the 2,000 largest publicly-listed companies in the world, noting that none of the 114 fossil fuel companies with net zero targets have committed to phasing out fossil fuels.    

Lang also notes the RAF should also ensure a strong focus on non-state entities which are not decarbonising or disclosing their net zero plans – though others such as environmental disclosure platform CDP argue there is a balance between harmonisation and the burden of reporting with those having the largest CO2 impact having more responsibility to report.  

In the draft implementation plan for the RAF there are plans to create a working group of pledge verification entities which will be expected to confirm their assessment of the pledges registered in GCAP and the methodology employed in the verification. Organisations such as Net Zero Tracker, but also the likes of CDP, InfluenceMap, World Benchmarking Alliance (WBA) and Climate Chance are seen as bodies which could play this role.  

Data ecosystem  

The GCAP where parties are expected to report via the RAF plans to connect with the Net Zero Data Public Utility (NZDPU), currently in development by Bloomberg Philanthropies and partners, including the CDP. 

Amir Sokolowski, Global Director for Climate Change at CDP, says the NZDPU was launched to harmonise basic data points with the RAF and GCAP created to harmonise methodology for pieces of data such as carbon emission – kickstarting a theory of change. “More people will see it, consistently, and they’ll know where to point the finger.” 

The WBA is also a supporter of RAF with Engagement Lead Decarbonisation and Energy Romain Poivet saying it reflects “all the pieces of the puzzle coming together” to drive accountable climate action, while recognising the challenges the UNFCCC will face in trying to manage non-state actors without having a strong legitimacy to do so.  

In its consultation response, the WBA says revamping of GCAP with a higher level of granularity and quality in the data being reported is essential to ensure the relevance of the RAF.   

Poivet also says that ultimately regulation at a country level will be needed to drive climate action from non-state actors.  

With COP28 around the corner, and industry consensus that the RAF will be a vital tool for transparency and confidence in net-zero plans, it remains to be seen how countries will view it – their agreement will be important not just to get RAF off the ground, but to get robust data from their non-state entities to gather as accurate a picture as possible of where the world stands on tackling climate change.  

In this regard, CDP’s Sokolowski explains that RAF and the accountability it seeks to bring should be eventually reflected in the UN’s Global Stocktake, the first version of which only assesses the nationally determined contributions of parties.  

“It should facilitate access to harmonised information that helps civil society,” he says. “But ultimately it needs to get down to legislation and policies at an international level. It’s not only ensuring that there is a place to define credibility, but also a place to define ambition.”

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