Recent years have seen a proliferation of commitments by companies and financial institutions to achieve “net zero” greenhouse gas emissions, in line with global climate change goals under the Paris Agreement. Initiatives like the UN Race to Zero campaign and Glasgow Financial Alliance for Net Zero have established criteria and guidelines for these efforts, and in 2022 a UN High-Level Expert Group (HLEG) was convened to develop definitive recommendations for “high-integrity” commitments.

While various initiatives have consolidated around common principles, there are important differences in their specific requirements – such as policies related to financial support for fossil fuels – and in how they are being put into practice. There also remain fundamental questions about the conceptual framing of net zero commitments, especially for financial institutions. Most challengingly, both companies and financial institutions are committing to reduce emissions at a scale and pace that individually they have no hope of achieving – something most financial institutions readily acknowledge in disclaimers to their commitments.

The HLEG thus called for a “road to regulation” that would (a) bring greater accountability to voluntary net zero commitments and (b) “transform [them] into ground rules for the economy overall”. This report argues that greater attention is needed to the second objective. To be successful, voluntary net zero commitments must be tied more directly to advancing national and global climate policy, including efforts to decarbonize energy systems and phase out fossil fuels. Further coordination is needed between governments, voluntary net zero initiatives, companies and financial institutions to jointly explore this vision.