The Taskforce on Net Zero Policy was established in response to the 2023 UN High-Level Expert Group (HLEG) recommendations. It aims to strengthen corporate and financial net zero commitments by focusing on disclosures, transition plans, and regulatory harmonisation. With over 1,000 policies analysed, the Taskforce addresses fragmented regulatory frameworks to accelerate alignment with 1.5°C pathways.

The report evaluates net zero policy progress across G20 nations, tracking alignment with the HLEG’s 10 recommendations. It focuses on five policy domains: disclosures, transition plans, prudential regulation, taxonomies, and stewardship. The analysis reveals uneven policy adoption, with notable gaps in integrating just transition, adaptation, and biodiversity. Recommendations aim to inform future reforms and harmonise global standards.

Assessing progress of net zero policy reform

Policy adoption across the G20 has tripled since 2020, but gaps persist. While disclosures and taxonomies show progress, integration of just transition, nature, and adaptation remains insufficient. Only eight G20 countries embed mandatory transition plans, and none fully align policies with the 1.5°C threshold. Divergent regulatory approaches hinder progress, with just 21 corporate policies explicitly linked to 1.5°C pathways.

Key findings include:

• Disclosures are the most widely adopted tool but vary in depth and enforcement.
• Policies addressing methane and non-CO₂ emissions are limited, despite their importance for 2030 targets.
• Gaps in ambition and compatibility across jurisdictions create challenges for multinational corporations.

On the road to COP30

The report identifies four key focus areas to strengthen net zero policies:

• Transition plans and planning: Mandate comprehensive transition plans with clear targets, funding strategies, and pathways aligned with the 1.5°C goal.
• Integration of nature and adaptation: Include biodiversity, climate resilience, and social equity in corporate and financial policies.
• Policy compatibility: Improve cross-border coherence and harmonise taxonomies to support multinational firms.
• Interconnected justice: Address socio-economic impacts through just transition policies, emphasising equity and inclusion.
• Collaboration and knowledge sharing are recommended to build cohesive, effective net zero frameworks.

Stocktake of net zero policy

State of policy adoption across G20 countries

All G20 nations have adopted some form of net zero policies, with the number tripling since 2020. Transition plans remain at an early stage, with only the EU mandating them. Disclosures and taxonomies have seen the most progress, but significant gaps remain in addressing systemic climate risks and non-CO₂ emissions.

Climate-related disclosures

Fourteen G20 nations require or recommend Scope 3 emissions disclosures. Thirteen mandate third-party verification, improving reliability. Forward-looking metrics, including climate risks and transition plans, are expanding but often lack standardisation.

Transition plans

The EU leads with mandatory transition plans, covering targets, governance, and funding. Voluntary initiatives in Canada, Japan, and the UK encourage alignment with Paris goals. Transition plans are essential for aligning corporate strategies with national climate targets.

Prudential regulation of financial institutions’ climate risk

Prudential tools are emerging to address systemic climate risks. Stress testing and scenario analysis are being refined globally, with the EU implementing mandatory requirements for financial institutions. However, alignment with 1.5°C scenarios remains inconsistent.

Sustainable taxonomies

Sustainable taxonomies are in place or under development in 14 G20 nations. The EU’s taxonomy serves as a model, linking investment criteria to environmental goals. However, taxonomies often differ in ambition and scope, hindering global compatibility.

Stewardship and engagement

Stewardship policies remain underdeveloped. Only the UK explicitly links stewardship to climate goals. Investor accountability and alignment with public policy are areas for improvement.

Integrating multi-dimensional sustainability in corporate and financial net zero policies

Integration of just transition, adaptation, and biodiversity is limited. Only eight countries recommend or mandate just transition indicators, while five address biodiversity targets. Greater emphasis on multidimensional sustainability is needed to balance social, environmental, and climate goals.

Evidence of contribution to 1.5°C-aligned pathways

Policies explicitly linked to the 1.5°C threshold are rare, with only 21 corporate policies and 57 real economy policies aligning with this goal. Enhanced alignment through science-based targets and clear implementation pathways is critical for credibility.

Conclusion

The report underscores the need for mandatory transition plans, greater policy integration, and improved global coordination. By addressing gaps in ambition and compatibility, the G20 can accelerate action towards a just, resilient, and net zero future aligned with the 1.5°C target.