Net Zero for the private sector: real-world climate action or greenwash?

Summary

Pledges by big companies and big investors to achieve net zero greenhouse gas emissions in line with the international Paris Agreement on climate change are proliferating around the world, including in Australia. This project explores legal and regulatory drivers for these commitments and assesses their potential to deliver timely and ambitious emissions reductions in the real world.

Researchers

Dr Anita Foerster, Senior Lecturer, Dept of Business Law & Taxation

Project background and aims

Climate action in the private sector is critical to achieve the goals of the international Paris Agreement on climate change, particularly in nations like Australia where governments have been slow to commit to ambitious climate targets and to introduce substantive law and regulation to deliver on targets. Yet there are also well-founded concerns that the recent surge in corporate and investor net zero pledges is merely greenwash, and unlikely to deliver emissions reductions in the real world at the scale and pace necessary to avert dangerous climate change.

This project seeks to understand how companies and investors are influenced by legal obligations to identify, disclose and manage climate-related financial risks and by the associated web of rapidly developing private regulatory initiatives and activities (best practice standards, investor engagement, strategic litigation) that seek to influence their approach to climate change. Although underlying corporate law obligations are climate-neutral, private regulatory activity is increasingly organised around net zero goals and seeks to align private sector activities with the Paris Agreement.

Methodology

This project combines legal and regulatory analysis with an empirical study of corporate climate pledges, targets and their implementation by large Australian listed companies. This study assesses the nature and strength of corporate climate commitments and its relationship to regulatory pressure. The aim is to contribute to better understanding of the role that private climate regulation plays - in conjunction with legal obligations - in shaping corporate climate action.

Publications

Anita Foerster, ‘Aligning private climate risk management to Paris climate goals? – an Australian perspective’ submitted to Utrecht Law Review, Special Issue on Climate Risk Governance (forthcoming 2022) – available on SSRN

Presentations

Anita Foerster, ‘Aligning the private management of climate-related risks to Paris climate goals? – an Australian perspective’ presented at Managing Responsibilities for Climate Change Risks, Utrecht University and University of Sydney Research Workshop, 21-22 January 2021

Anita Foerster & Michael Spencer, ‘From climate risk governance to corporate climate responsibility: the role of private climate regulation’ presented at 8th Frontiers in Environmental Law Colloquium, Macquarie University,9-11 February 2022

Acknowledgments

This project was supported by the Monash University Advancing Women’s Research Success Grant (2020-21) and the Depart. Business Law and Taxation Research Grant (2021).