By Duncan Grieve

Special Counsel | White Collar Defense and Investigations

By Timbre Shriver

Associate | Global Litigation

On October 26, 2023, the UN Environment Programme (UNEP) published a report with recommendations for linking climate-related actions taken by non-state actors (NSAs) to the Enhanced Transparency Framework (ETF) established by the Paris Agreement. Among other recommendations, the report, “Strengthening transparency of non-state actors: How national experiences and new digital technologies can strengthen the transparency efforts of non-state actors,” calls for the establishment of centralized data clearinghouses for climate action disclosures by both countries and NSAs, and proposes standardized disclosure rules for NSAs.

Countries that adopted the Paris Agreement in 2015 established the ETF, the mechanism that facilitates the process of documenting climate actions and tracking the progress of individual countries. NSAs can play a key role in enhancing and directing national climate change efforts by creating their own climate plans and emission-reduction goals, and assisting with the local implementation of national policy objectives. NSAs can also encourage other NSAs to make net-zero emissions pledges and help raise the credibility of those pledges.

No meaningful links between the ETF and NSAs currently exist, however. The report makes five recommendations on how to build strong links between the ETF and NSAs:

1. Ensure a good understanding among countries and NSAs of the benefits from harmonized and integrated approaches to monitoring, reporting and verification, and climate data management.
2. Provide specific guidance for national governments to include and reference NSA actions in official communications and reports.
3. Establish central clearinghouses for both country-level and NSA actions, utilizing digital tools to facilitate interoperability between existing and future datasets.
4. Encourage international institutions like the United Nations Framework Convention on Climate Change (UNFCCC) Secretariat and UNEP to play a more active facilitation role in creating dialogues between NSAs and country parties to enhance mutual understanding of actual and planned efforts.
5. Support NSAs, especially in developing countries, in improving data collection and reporting through the use of digital technologies.

The report also outlines recommended NSA disclosure standards. NSAs should:

• Annually disclose their greenhouse gas data, net-zero targets and the plans for, and progress towards, meeting those targets against an established baseline, along with comparable data to enable effective tracking of progress toward their net-zero targets.
• Report in a standardized, open format via public platforms that connect to the UNFCCC Global Climate Action Portal (GCAP) to address any data gaps, inconsistencies, and inaccessibility that slow climate action.
• Verify their reported emissions reductions using independent third parties, with special attention on building sufficient capacity in developing countries to verify emission reductions.
• Submit disclosures that are accurate and reliable, with large financial and non‐financial businesses seeking independent evaluation of their annual progress reporting and disclosures, including independent evaluation of metrics and targets, internal controls evaluation, and verification on their greenhouse gas emissions reporting and reductions.

Taking the Temperature: The UNEP report follows the UNFCCC’s introduction of the Recognition and Accountability Framework earlier this year to recognize voluntary climate change pledges by NSAs and ensure greater transparency and accountability regarding those commitments. As we also reported at the same time, voluntary pledges by non-party stakeholders will be recognized on UNFCCC’s GCAP. These measures bring NSAs around the world into the climate action disclosure fold to help ensure the accuracy and credibility of data disclosed. The UN has taken a leading role in encouraging NSAs, particularly those in developing countries, to follow the same standards as government entities. In late 2022, we reported that the UN established five principles to guide NSAs in setting and achieving net-zero targets, as well as a series of ten recommendations for avoiding greenwashing that include, among others, avoiding use of inexpensive carbon credits that lack integrity or undermining government climate initiatives, including through lobbying activity.