Beyond greenwashing

Aligning your organization with UN report guidelines for sustainable future

Aligning your organization with UN report guidelines for sustainable future


Bangkok, 22 June 2023 – The United Nations report on greenwashing was released at COP27. Entitled ‘Integrity Matters: Net Zero Commitments by Business, Financial Institutions, Cities and Regions’, the report was issued by a working group formally known as the High-Level Expert Group on the Net Zero Emissions Commitments of Non-States Entities. It offers a sharp rebuke to companies that claim to be tackling climate change without actually doing the work and sees the launch of a major crackdown on corporate greenwashing around Net Zero claims and ‘weak’ Net Zero pledges. The report warns these could undermine efforts to deliver the ambitions on the Paris Agreement by reducing emissions in line with 1.5C minimum target-setting.

Key recommendations

The report outlines key recommendations to ensure non-state actors are actively working towards decarbonization. It aims to build on the Race to Zero and Science-Based Targets initiative by providing corporates and investors with time-based frameworks to deliver Net Zero (based on short, medium, and long-term targets).

It offers a roadmap to prevent Net Zero from being undermined by false claims, ambiguity or greenwashing, providing 10 pointed recommendations for corporates and other ‘non-state actors’ like cities and investors to provide a pathway to Net Zero. 

These 10 recommendations are aligned to the following five principles:

  1. Ambition which delivers significant a significant near – and medium – term emissions reductions on a path to global net zero by 2050.
  2. Demonstrated integrity by aligning commitments with actions and investments.
  3. Radical transparency in sharing relevant, non-competitive, comparable data on plans and progress.
  4. Established credibility through plans based in science and third-party accountability.
  5. Demonstrable commitment to both equity and justice in all actions.

The report requires clear plans to be put in place - covering short, medium, and long term – that demonstrate a path to Net Zero. It calls on non-state actors to commit to immediate reductions in absolute emissions across the entire value chain, backed by short, medium, and long term science-based targets. These entities should also draw up and publish transition plans that showcase how immediate emissions reductions will be achieved and how spending will be reorientated and aligned with science-based targets.

Some of the 10 recommendations will be very familiar to financial service firms and corporates who have begun or are beginning their environment, social and governance (ESG) journey towards Net Zero. Other recommendations are, perhaps, less familiar. All the recommendations will be welcome in providing further clarity.

The report emphasizes that more regulation is required to ensure that net zero commitments are aligned to science-based targets. According to the report, that is the only way of achieving consistency, rigor, and enforceability.

The 10 recommendations, with commentary in relation to specific recommendations, are as follows:

Recommendation 1: Announcing a Net Zero pledge including targets.

This Net Zero pledge must be a commitment of the entire entity, and the Net Zero pledges must be made in public by the leadership, with annual publication of your greenhouse gas emissions baseline data (so stakeholders can judge your progress) and be reflective of the region, city, or corporation’s fair share of the needed global climate mitigation.

Recommendation 2: Setting Net Zero targets.

Non-state actors must create a transition plan. Initial targets must be set within a year of making your Net Zero pledge and include five yearly targets for 2025, 2030 and 2035 to act like stepping stones.

Transition plans must also set out how they will achieve Net Zero in accordance with the Intergovernmental Panel on Climate Change (IPCC), or the International Energy Agency (IEA) Net Zero greenhouse gases (GHG) emissions modelled pathways. The transition plan must also cover the entire value chain including end-use emissions.

The transition plan needs to start fast, not only reflecting the need to reduce emissions by 50 percent by 2030 but also demonstrating that the Net Zero pledge, announced pursuant to ‘Recommendation 1’, will help to achieve the 50% reduction in global emissions by 2030 as well as sustaining net zero beyond 2050.

Recommendation 3: Using Voluntary Credits.

Non-state actors must prioritize urgent and deep reduction of emissions across the entire value chain. The report does state that high integrity carbon credits in voluntary markets should be used for beyond value chain mitigation but cannot be counted towards a non-state actor’s interim emissions reductions required by its Net Zero pathway. High-quality carbon credits can be used only to balance out remaining emissions once short and medium-term science-based targets have been met. Companies also need to address their entire supply chain as well as how their own products are used. Organizations should stop focusing on reducing the intensity of emissions, rather than absolute measurements across the value chain. Where data is missing for Scope 3 emissions, companies need to explain how they plan to obtain the missing data, or they need to highlight what estimates they are using.

Recommendation 4: Creating a transition plan in accordance with Recommendation 2 is the beginning of your ESG journey.

Once created, this transition plan should not be put in a drawer to gather dust, to be credible and meaningful it needs to be updated frequently to remain relevant in the face of ever-changing issues.

Recommendation 5: Phasing out of fossil fuels and scaling up renewable energy.

The report states that the IPCC says existing and planned fossil fuel infrastructure will exhaust the remaining carbon budget. As a result, there is no room for new investment in fossil fuel supply – rather, there’s a need to decommission existing assets. Now is the time to accelerate the transition to a renewable energy future but the recommendation states that there is an urgent need for the IPCC and the IEA to define phase out dates for all fossil fuels in line with a Just Transition.

The report notes that there is a need to dramatically scale up the financing of renewable energy especially in developing countries. All Net Zero pledges should include specific targets aimed at ending the use and support for fossil fuels in line with the IPCC and IEA Net Zero GHG pathways. The transition away from fossil fuels must be just for affected communities, workers and consumers as well as avoiding transferring fossil fuels to new owners. The transition away from fossil fuels must be matched by a fully-funded transition towards renewable energy.

The report also offers clarificatory steps to avoid greenwashing and recommends that non-state actors should no longer claim to be Net Zero if they continuously build or invest in new fossil fuel supply, support deforestation, and other environmentally destructive activities that should be branded as “disqualifying”.

For financial institutions, there are specific requirements including;

  1. Net Zero transitional plans must include an immediate end to lending, underwriting, or investing in coal for power generation.
  2. Coal phase-out policies to stop financial and advisory services to the entire value chain by 2030 for OECD countries (2040 for non-OECD countries).
  3. Coal investments that remain in the portfolio must have plans with facility-by-facility closure dates that include a just transition for workers.
  4. For oil and gas, oil and gas policies need to include a commitment to end financing and support of exploration for new oil and gas fields, expansion of oil and gas reserves, and oil and gas production (the Recommendation does not specify a date for ending this).
  5. Financial services firms need to create investment products which are aligned with Net Zero emissions (targets) by 2050 and facilitate increased investment in renewable energy.

Recommendation 6: Aligning lobbying and advocacy.

The UN are also advocating for companies to use their lobbying influence to encourage climate-related rules and regulations. For example, the UN wants companies to stop lobbying or associating with groups that attempt to undermine government climate policies, namely through trade associations. Instead, the report calls that organizations align their advocacy and governance with their climate commitments and would include linking executive compensation to climate action and proven results.

This is a sensible joined-up approach to align external policy and engagement efforts including membership of trade associations to goal of reducing emissions. The recommendation asks organizations to publicly disclose trade association affiliations and also to encourage those trade associations advocate for positive climate action. One for us as consultants, accountants, and lawyers: we should work with our peers to transform our sector and should publicly disclose how our engagements with clients contribute to Net Zero and how greenwashing is being tackled.

Recommendation 7: People and nature in the Just Transition.

The financial sector should have a policy of not investing in or financing businesses linked to deforestation and should eliminate agricultural commodity-driven deforestation from their investment and credit portfolios by 2025, as part of their Net Zero plans.

Recommendation 8: Increasing transparency and accountability.

Trust is a critical currency of sustainability and can be achieved by increasing transparency and accountability in accordance with recommendation 1 and also generally.

Recommendation 9: Investing in Just Transition.

It is not enough to create a transition plan, that transition plan must be fair to all concerned. This is known as a “Just Transition” which takes account of the need to protect workers’ rights and help the people and nations who are most likely to be adversely affected by the move to Net Zero. Financial institutions and multinational companies should participate in developing country-led initiatives to decarbonize.

Recommendation 10: Accelerating the road to regulation.

The UN Report recognizes that another critical requirement to achieving Net Zero is further regulation.

KPMG Climate Change and Sustainability Services

KPMG in Thailand’s Climate Change and Sustainability Services can help you understand and address social, economic and environmental challenges. Our sustainability services practice is part of a global network comprising of more than 500 dedicated sustainability professionals, delivering advisory and assurance services in more than 50 countries. Our global network offers more than 30 years of sustainability knowledge and experience – all of which can be leveraged to support your business needs. Our service offerings have been developed to assist you in your sustainability journey, from initial integration to obtaining external assurance for public sustainability disclosures. We have extensive experience working with organizations in a wide array of sectors, including financial services, oil and gas, government, transport and consumer goods.

About KPMG International

KPMG is a global organization of independent professional services firms providing Audit, Tax and Advisory services. KPMG is the brand under which the member firms of KPMG International Limited (“KPMG International”) operate and provide professional services. “KPMG” is used to refer to individual member firms within the KPMG organization or to one or more member firms collectively.

KPMG firms operate in 143 countries and territories with more than 265,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. Each KPMG member firm is responsible for its own obligations and liabilities.

KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.

For more detail about our structure, please visit

About KPMG in Thailand

KPMG in Thailand, with more than 2,000 professionals offering Audit and Assurance, Legal, Tax, and Advisory services, is a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

For media queries, please contact:

Naruecha Putithanarak