Red Flags in Green Promises: A Framework for Identifying Greenwashing Risk in Corporate Net-Zero Pledges

This paper investigates the surge in net-zero commitments among businesses since the Paris Agreement's adoption in 2015, emphasizing not only the dramatic increase in pledges to achieve net-zero emissions by mid-century but also a growing trend of skepticism about the integrity and credibility of these corporate climate actions. By September 2024, over 1,145 of the largest publicly-listed companies had established their own voluntary net-zero targets. However, concerns about the credibility of these commitments have emerged, particularly regarding their interpretation and implementation. This paper introduces a framework to specifically evaluate corporate net-zero integrity, by evaluating potential indicators of greenwashing, which include elements of target definition, use of offsets, but also lobbying activity and emissions mitigation performance. Our framework builds on existing literature and employs data from multiple sources to evaluate the integrity of corporate net-zero claims. Ultimately, this study contributes to understanding private climate governance and aims to enhance accountability in corporate climate commitments, providing a systematic approach to evaluating net-zero pledges and their implications to narrow the emissions gap.