Zero net emissions goals: Challenges for boards

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Abstract

The major research purpose of this paper is to identify the challenges for boards of directors concerning their responsibilities to assess and track their companies’ commitments to zero net emissions goals and performances. A major challenge for boards is to determine whether their companies are sincerely trying to reach zero net emissions or just doing greenwashing, i.e., just making commitments or pledges without any substantial subsequent performance. This literature-search research broadens previous research on companies’ commitments to renewable energy (Grove & Clouse, 2021) to zero net emissions goal commitments and related boards’ monitoring responsibilities, especially to avoid greenwashing. This study also extends previous research on climate change risks and opportunities (Grove, Clouse, & Xu, 2021) to develop and establish board challenges for zero net emissions goals with the following sections: overview of climate risk, current climate lawsuits and board risks, EU climate law, carbon inserts, carbon offsets, carbon credits for agriculture, climate disclosure metrics, global bank greenwashing, and conclusions. The International Organization of Securities Commissions Organization (IOSCO) includes 90% of the public market security regulators in the world and has established a working group that should establish climate disclosure metrics for public companies. Climate disclosure metrics are relevant and needed to help stakeholders, including boards, assess company climate performances, opportunities, and risks.

Keywords: Zero Net Emissions, Greenwashing, Boards of Directors

Authors’ individual contributions: Conceptualization — H.G.; Methodology — H.G.; Resources — M.C.; Writing — Original Draft — H.G.; Writing — Review & Editing — M.C.; Visualization — H.G.; Funding Acquisition — M.C.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G3, G30

Received: 17.07.2021
Accepted: 14.09.2021
Published online: 17.09.2021

How to cite this paper: Grove, H., & Clouse, M. (2021). Zero net emissions goals: Challenges for boards. Corporate Board: Role, Duties and Composition, 17(2), 54–69. https://doi.org/10.22495/cbv17i2art5