Why Australian companies need to reconsider their net zero plans in 2025
A net zero target has become a commonplace goal for Australian corporations looking to solidify their environmental, social and governance (ESG) efforts and reputation. In fact, over 66% of ASX200 companies have committed to a net zero target as of 2023. While a target is a great first step forward, developing a plan to actually achieve net zero is a longer, more complex, but highly necessary next step, critical to ensuring that progress is made and key milestones are met. Globally, a 2023 analysis by the Net Zero Tracker showed that fewer than 4% of corporate net zero targets are backed by a credible plan to achieve them. How can we close that gap?
Australia's demand for corporate sustainability and accountability
According to Australian consumers, greater progress is needed on corporate efforts towards sustainability, despite growing recognition of why such action is necessary. A recent survey conducted by BSI shows that 74% of Australians believe businesses need stricter regulations to reduce their carbon emissions. 61% of Australians believe that climate change is the most critical issue facing the world at present. Globally, 79% of individuals want an international approach to address climate change.
This highlights not only the public demand for organizations to make a commitment towards a greener future but also the high level of scrutiny that Australian organisations will be under to commit to net zero targets and successfully achieve them in the long term. Most recently, Santos has been accused of greenwashing by its investors after failing to provide substantial evidence of its pathway to net zero by 2030 target. Aside from the financial implications, this could leave lasting impressions on Santos' reputation as a leading energy supplier. Many other companies may fall under the same scrutiny in the coming years. As climate change continues to be an increasingly pressing issue globally, companies must be prepared to verify the trajectory of their ESG goals and ensure they have the means to deliver on their commitments.
Introducing a new path to net zero emissions
One of the ways Australian organisations will soon be able to develop credible, comprehensive net zero transition plans, and demonstrate the integrity of these plans, is by using ISO's upcoming net zero standard. As I most recently discussed at the Australasian Emission Reduction (AER) summit, this standard will be the world's first international, independently verifiable net zero transition plan standard for organisations. Harmonising over 33 of the most prevalent voluntary net zero frameworks and initiatives in one place, this standard will reflect the consensus of negotiations between thousands of climate change and net zero experts across the world. What has previously been described as the "alphabet soup" of net zero action will be converged and harmonized in one global comprehensive standard that will help bring order to the fragmented landscape of initiatives and frameworks currently governing the net zero transition. By defining clear standards for credible net zero action and leveraging the market power of the international standards system, the ISO net zero standard will represent one of the most significant changes to net zero governance since the start of the transition.
The importance of a global standard in net zero transitions
The ISO net zero standard will allow businesses to be credible, comprehensive net zero actors, which is imperative both for organisations to thrive and for the net zero transition to succeed locally and globally. Not only will the standard provide the principles and recommendations for organisational net zero transition plans to be successful in achieving their targets, but this global accreditation will also ensure that organisations can safeguard their reputation as they reduce their greenhouse gas emissions and holistically act to combat climate change.
Beyond business - the climate impact of net zero standards
Companies looking to substantiate their net zero targets and craft a credible net zero transition plan will soon be able to use BSI's world-first international, independently verifiable net zero standard to chart their paths to net zero with confidence. This standard won't just verify organisations' individual climate impact, but by virtue of adoption increasing globally, the holistic and comprehensive nature of action the standard facilitates will encourage collective economic, technological, and societal change, thereby making the achievement of net zero and a more sustainable world by 2050 possible.
