How do we know whether an organisation is genuinely transitioning to net zero?

Article 2 in the series: Building a Net Zero Transition Governance Architecture

Thousands of organisations now have net zero targets. But a target tells us relatively little about whether an organisation is actually transitioning: a company can announce a 2050 ambition without explaining how its business model will change. It can publish emissions data without showing how emissions will fall. It can make significant investments in renewable energy while continuing to expand emissions-intensive activities elsewhere.

So how do governments, investors, employees, customers and communities distinguish between a net zero commitment and a credible organisational transition?

This is one of the problems that the draft ISO/DIS 14060 - Net Zero Aligned Organizations - is seeking to address.

From commitments to credible transition

ISO/DIS 14060 is intended to provide a common framework through which organisations can demonstrate that their net zero strategies, targets and delivery are compatible with reaching net zero, and that they are making credible and verifiable progress towards that objective.

That distinction between ambition and delivery matters.

A credible transition requires more than setting a distant target. The draft standard addresses the development and implementation of a net zero aligned pathway and transition plan, target-setting, action and demonstration of progress. It places particular emphasis on deep greenhouse-gas emissions reductions and on organisations being able to substantiate their progress.

The question begins to shift from “Does this organisation have a net zero target?” to “Is this organisation changing in a way that is consistent with achieving it?”

Why does this matter beyond the organisation?

The answer takes us back to the idea of a Net Zero Transition Governance Architecture introduced in the first article in this series.

Governments need credible information when designing industrial policy, incentives and procurement requirements. Banks and investors need it when deciding which organisational transitions they are prepared to finance. Workers and communities need it when assessing what corporate transition strategies mean for livelihoods and local economies. Customers and supply-chain partners increasingly need it when making purchasing and procurement decisions. And organisations themselves need credible transition plans to guide strategy, investment and business-model transformation.

Without some common understanding of what credible transition looks like, each actor may apply different criteria. That creates fragmentation, uncertainty and opportunities for greenwashing.

Standards can help address this problem by establishing a common reference point. ISO/DIS 14060 is particularly significant because it seeks to provide a globally consistent approach that can be applied across different organisations and sectors, while supporting credible claims and integration of transition planning into organisational strategy.

But who defines credibility?

This is where the discussion becomes more interesting.

A global standard inevitably has to answer difficult questions. How ambitious should organisational targets be? Which emissions should an organisation be responsible for? What role should carbon removals and credits play? How should progress be demonstrated?

And perhaps most importantly for countries such as South Africa: should every organisation in the world be expected to follow the same pathway to net zero?

The Paris Agreement recognises equity and the principle of Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC). A global standard for organisational net zero alignment therefore has to operate in a world in which countries have very different development histories, capabilities, energy systems and responsibilities for climate change.

Credibility cannot simply mean uniformity.

That makes ISO/DIS 14060 more than a technical standard. It becomes part of a much larger conversation about who defines a credible transition, on what scientific and normative basis, and how global ambition should be reconciled with different national and sectoral circumstances.

Next in the series

How do we decide which pathway to net zero an organisation should follow?

That question - and the implications for sector, location, justice and CBDR-RC - will be the focus of the next article.

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