COP28: Accountability and integrity with Catherine McKenna and Johan Falk

We're now coming to another section where we're going to talk about accountability and we're absolutely delighted to have Katherine McKenna with us who's the CEO of climate and nature solutions and of course Canada's former minister of the environment and climate, and she chaired the UN Secretary General's high level expert group on Net Zero commitments of non-state entities that released the report Integrity Matters at COP 27 in Egypt. Did I do well there with the UN language?

Very good. Unfortunately the UN language is incomprehensible but yes, I have many people say 'what is a non-state entity?' It's like cities and financial institutions, cities and regions, and I think we should just say what it is instead of using this very foreign language which is actually a problem at COPs and in the environmental movement generally, that we use acronyms all the time, all this language that people don't understand, and we're trying to get people excited and ambitious, and so maybe we should talk like people.

Yeah, it's when somebody comes up and goes 'I'm with GFTWFBZ Z7' and you go 'Could you explain what that is?' They go 'You've never heard of us before.' But Katherine, if I can call you Katherine, the... yeah, it is Gender Day today, gender and trade, gender and this, gender and that, and it's really important, right? And you wanted to say something briefly on that before we start with you and Johan.

Well, first of all, every day should be Gender Day. And you may have seen the family photo, i.e., the leaders that came to COP, and it's almost all men. It is the most depressing thing. But on the flip side, it's women leading the climate revolution every day in their communities, in the negotiating rooms, in their boardrooms. They're really doing the work and I think we need to celebrate them, I think it's good to recognize them, but we need to also enable them. So tomorrow I'm having an event 'Women Leading on Climate'. It's literally about women leading the climate revolution to talk about real things women are doing, barriers to women actually being able to implement transformational change, and to be honest, and I'm going out on a limb here because obviously women are different, we come from different perspectives, but I think if you had women leading, if that family photo was all women, we would get a fossil fuel phase out. I'm still hopeful but I know women: we are practical and we are ambitious and we won't stop.

Yeah, and you know that there is not just short-termism but we also need a long-term vision about this world and women see that. Absolutely. Got Johan Falk with us as well, the CEO and co-founder of the Exponential Roadmap Initiative which gathers innovators, transformers, and disruptors taking action in line with the 1.5 degree Celsius safety goal of the Paris Agreement. And your mission right now is to halve emissions by 2030. So let me first turn to Katherine again. So one year ago, the expert group that you chaired presented the recommendations designed to make clear what companies could and could not do with their net zero claims. One year later, what's the progress?

Well, first of all, let's talk about what companies can and can't do because everyone's net zero... basically, I think 90% of global GDP is covered by a net zero commitment. So you see advertisements everywhere. Fossil fuel companies, it would surprise you because they think they're net zero. The reality is if you are going to be net zero, there's what you have to do and what you can't do. And the Secretary General is very concerned also about what you can't do, the greenwashing piece, because there's too much greenwashing and we're not going to meet the goal of halving emissions by 2030. We don't have everyone stepping up. So very quickly: what must you do? You can have a long-term goal 2050, but you need to have short-term interim targets. As my son says, 'Are you going to be dead in 2050?' And I'm like, 'That's not the plan.' But it's so far out, certainly for CEOs they're not going to be there, that we need to be taking action right now with interim targets. You need to be reducing your emissions across all of your scopes, so one, two, three, but boring language – across your value chain – and your absolute emissions need to go down. You need to have clear transition plans. Businesses need plans. So these are plans that actually demonstrate what you need to do across your business. And then you need to report transparently, so there's accountability. What can you not do? Because this is where the rubber hits the road. You cannot say you are net zero if you're investing or building new fossil fuel infrastructure. That is the science, that is what the IEA, the International Energy Agency, has said. Cannot simply buy cheap credits rather than reducing your own emissions. And you cannot lobby against climate action. You have to lobby for climate action. So the good news is there's been a lot of great businesses, financial institutions really stepped up using the report as a North Star. And this year though, it was clear our 10th recommendation – our report only has 10 recommendations, very short, you can go read it – our 10th recommendation was really a call to governments: we need you to regulate. The regulators need to step up because we need a level playing field. There's a lot of good businesses that are working hard, and then there's a bunch of businesses that are either doing nothing or greenwashing. And so until you actually regulate, it's going to be very hard to have accountability. So with the Secretary General we announced that yesterday, and I think it was really positively received, and moving forward got to keep on going.

Okay, Yan, let me turn to you. You work with more than 10 companies to develop such transition plans. Why is it a good idea for a company?

It's an important driver, that's a good point there. But I'm curious about this 90% of the economy or whatever is under net zero, right. Are there any numbers on what proportion of the companies that have set net zero are actually walking the talk, and what proportion are actually surfing the green... washing?

Well, I mean it's hard to know because actually a lot of the reporting isn't done transparently. So actually figuring out who's doing what... I mean the good news is Johan has a great group of companies that are doing things. There are good companies that are leading the way like you talked to, like Stad, there are other companies that are out there. The challenge is actually figuring out who are doing things. And there are folks like Net Zero Tracker out of Oxford University, and they've actually seen that having a net zero target is the easy part. Saying your net zero by 2050, easy. But actually folks that have transition plans and that have transition plans aligned with the science and that are actually doing the work is a very small proportion. But regulation is coming. If you're a business, like Europe is already moving forward, the UK is moving forward, and so we're going to see this come. And I find businesses are rational. They will actually react. And I think if you're a first leader, first mover, you're going to be in a much better position to future-proof your business and actually do the work. So I'm calling on everyone to actually step up. The Secretary General wants a report next year to see what is actually happening, to understand okay how many businesses are doing this and who isn't.

And Yan, if I was a company and I wanted to do a transition plan with the Exponential Roadmap, how would I set about? I mean, do I just give you a call and you say 'OK, pop round'? How's it work?

Yeah, last thing – law. I mean, I'm a lawyer, reformed lawyer, recovering lawyer. The Grantham Institute, and is it Columbia University as well? I mean, great report came out a few months ago on the... of legislation, litigation that's happening. ClientEarth we had here the other day and ClientEarth is great, suing KLM for claims that if you fly in their planes that the air is cleaner afterwards. Is that also a route for accountability?

For sure. In Canada, we have the Pathways Alliance, the six largest oil sands companies who have a campaign – they're net zero here, of course too – they're spending more money I think on advertising that they're net zero than actually reducing their emissions or investing in clean. And they're now being investigated by our Competition Bureau for misleading advertising. You see litigation by ClientEarth, California has been very aggressive in the litigation piece. So it's a risk. There's the risk to your physical infrastructure, there's a risk of litigation, there's a risk of missing out on the opportunities because we're moving to clean. And so it's both risk and opportunities that I think are going to drive this. And short of regulation, because regulation doesn't happen overnight, I think all these other factors are moving people forward. And we need an ambition loop. So let's be clear, we do need governments to step up, and we need businesses pushing government to enact the policies like carbon pricing that would be one of them. That's critically important that actually will enable businesses to do more good.

All right, we've run out of road. And we've run out of your grandson's car that the electric is not here. Either overheated, so I had to back? No, electric cars work by the way. Just so. Thank you very much for being with us again. I love your passion and also the fact that you know what you're talking about, which is always handy when you've got a guest. And Johan, a brilliant guy as usual. And I think you've got another session perhaps coming up quite shortly, so we have to close it down there and hand it back to Stockholm and Katarina.