We need to talk about net zero bullsh*t.

13 min readJun 22, 2021


After being accused of lying in the 1980 comedy classic the Blues Brothers, Elwood Blues tells his brother Jake that it “Wasn’t lies, it was just… bullsh*t”. Fast forward 25 years and what was a funny, slightly crass and somewhat dubious distinction, took on an altogether more profound meaning when Princeton University Philosopher Harry G. Frankfurt released his 2005 book On Bullsh*t.

Frankfurt argued that:

“bullsh*t is speech intended to persuade without regard for truth. While a liar cares about the truth and attempts to hide it; the bullsh*tter doesn’t care if what they say is true or false, but rather only cares whether their listener is persuaded.”

Elwood Blues was more right than he knew.

In matters of sustainability Greenwash is a form of bullsh*t. At its most sinister, it is trying to persuade with green tokenism from a fundamentally unsustainable core, but mostly it is less conscious with elements of truth intertwined. As the greenwasher is less interested in truth than persuasion, it is bullsh*t either way.

In the same way that Elwood Blues decerned the difference between lies and bullsh*t, Duncan Austin divided ‘greenwish’ from greenwash in his 2019 paper, Greenwish: The Wishful Thinking Undermining the Ambition of Sustainable Business.

Unlike greenwash, greenwish is:

“the earnest hope that well intended efforts to make the world more sustainable are much closer to achieving the necessary change than they really are.”

On one level greenwash is bullsh*tting others, while greenwish involves bulls*tting yourself. The intention may be more sincere for the greenwisher, but it is bullsh*t just the same.

This brings us to the explosion of net zero carbon commitments by countries, companies and financial institutions. How much of this is bullsh*t? And even if it is, does it mark a positive signalling exercise which will drive real change, or is it a delusion that will collapse when greenhouse gas emissions continue to rise?

The fervour around net zero is such that these questions may seem out of place, even rude! Can’t we just celebrate this momentum and then move forward?

Source: Treehugger.com

A brief history of climate disclosure, it’s bullsh*t

A look at history is illuminating in this regard. 21 years ago — more than twice as much time as we now have to reduce emissions by 50% — the Carbon Disclosure Project (now CDP) laid out a framework for corporate climate change disclosure backed by a large group of investors. Today, these investors include 590 asset managers and asset owners overseeing more than US$110 trillion in assets.

I remember sitting at my desk around 2010 trying to find our investment company’s name amongst the (then) nine pages of CDP signatories. 2010 was also the year the US Securities and Exchange Commission made clear that climate change related risks were already covered by existing corporate disclosure requirements.

Fast forward to a meeting with a large property developer in around 2016 who had decided to stop responding to CDP three years earlier. When telling the story, the head of sustainability lamented that not one of the 100s of investor signatories appeared to notice — certainly, none had asked why.

Michael Bloomberg & Mark Carney

Fast forward to 2017, when, with much fanfare, the Task Force for Climate Related Financial Disclosures (TCFD) was launched. Mark Carney and Michael Bloomberg, truly big hitters in the world of finance, had sponsored a standard that would set the information infrastructure the finance sector needed to (finally) incorporate climate risks into their investment decision-making.

Was TCFD superior or even that different to CDP or the SEC’s guidance? Not really, although it did come with a new tool for delay and obfuscation — scenario analysis, which investors, companies and NGOs have argued about since.

Scenario analysis is a useful strategic tool for understanding the implications of different climate futures, but as a disclosure requirement the temptation to bend the scenarios to existing corporate strategy has been too great with a string of fossil fuel companies claiming alignment with climate goals while growing their production. None has imagined a scenario that puts them out of business. Truly audacious bullsh*t.

What did actual emissions do throughout this time? Between 2000 and 2019 annual emissions have increased 45% and the concentration in the atmosphere has climbed steadily. In 2020, the global pandemic saw the first fall since the global financial crisis, but one which was less than the annual reduction needed between now and 2030 if we are to reach the goal of net zero by 2050.

Concentration of CO2 in the atmosphere.

Source: Climate.nasa.gov

Bullsh*t aside

The fundamental question of this brief history is whether the finance sector really lacked the information it needed in 2000 or 2010 to take more decisive action or was the whole disclosure journey mostly bullsh*t?

Unburnable Carbon — Are the world’s financial markets carrying a carbon bubble?

How much disclosure did any of us need to identify the largest sources of emissions and where the best solutions might lie? After all, organisations like Carbon Tracker, which launched in 2009, were able to find the information it needed to draw what should have been an obvious conclusion: we are in a massive “carbon bubble”.

While climate science is complex, understanding 80% of what needs to change is not. It was the will to act not information that was lacking. If our two-decade journey on climate change disclosure tells us anything, it is that understanding how much of the current excitement around net zero commitments is bullsh*t matters. So, is net zero bullsh*t?

Proxy voting shows real change is happening, right?

The good news is that the acceleration in some areas has been truly remarkable. It was only a few years ago that shareholder resolutions at company annual general meetings requesting rudimentary climate disclosure would receive scant support. Now, these resolutions are often passed by a clear majority of shareholders, even when the companies oppose them. Resolutions with more teeth, like requests for net zero plans and targets, are also increasingly being supported. And for the first time, in the case of Exxon Mobil, company directors have been removed and replaced on climate grounds. An extraordinary event by any measure.

Source Morningstar

Can large investors who have made net zero commitments take credit for this? Perhaps for evolving their voting stance, but it remains the case that almost all climate related resolutions have been proposed by smaller investors. In the case of Exxon, it was a hedge fund, Engine 1, with less than US$300m in assets under management. Most other climate resolutions are driven by NGOs like ShareAction (UK), Follow This (Europe), As You Sow (US) and ACCR (Australia).

While large investors have the resources, technical expertise, moral obligation and financial interest to drive these resolutions, they continue to free-ride on the efforts of smaller players.

Even when voting positively, questions can be asked on the adequacy of the approach by these investors. The recent shareholder vote to approve Shell’s net zero climate plan, was promptly slapped down by a Dutch court which found the plan inadequate and a breach of Shell’s duty to reduce the harms from its products.

Good stewards should never be behind the courts. By definition, if you need to be forced to do the right thing you have acted too slowly.

Activists celebrate court victory. Piroschka Van De Wouw / reuters

The court ruling came on the same day as the vote on Exxon’s board, yet even this win came too slowly, as the company had spent years destroying value, slowing climate action and thumbing its nose at those demanding change. Exxon had rejected all 62 shareholder resolutions on climate change from 1990 to 2015, this continued despite in 2016, almost 40% of shareholders supporting a climate change resolution and in 2017 a resolution being carried by a majority of 62%.

It took another four years for a director to be removed at Exxon — 31 years after the first resolution — and these are the investors who will halve their emissions by 2030?

How can investors allow the boards of companies who have misled, lobbied and delayed climate action for decades appoint their own successors? It’s like a gangster appointing his own investigator.

Disclosure and voting are but two of many areas where we can point to a long history of bullsh*t by the finance sector on climate change. While it is greenwash for some and greenwish for others, these self-proclaimed responsible investors have time and again fallen short of what was needed.

It cannot go on.

Yes, but now we have Net Zero!

A commitment can set the stage for action, but it can also provide escape hatches for guilt free failure. Climate commitments must have genuine influence on the real economy and actual emissions, however commitments made today are based on pathways conceived in elaborate top-down models, most of which hold great faith in “negative emission technologies”.

As legendary environmental campaigner Sunita Narin recently wrote of US President Joe Biden’s climate summit:

“Net-zero as an idea itself is flawed. It means that countries will emit more; but they will mop up these emissions to say “net-net”…. So, it’s a scam — at least today — to talk about these (technologies) as the real options going forward. You can argue that these so-called disruptive technologies will come and so we should not be rejecting this idea today. I would say yes, but our dependence on these still experimental technologies to save us will distract attention from what can and must be done today. That needs to be our conversation. Not net-zero.”

What are these technologies? One Sunita mentions is carbon capture and sequestration, a technology which has so spectacularly over promised and under delivered that it would make the nuclear power sector blush. According to the IEA’s new Net Zero pathway this technology must be scaled up at extraordinary rates. Recent analysis by Ketan Joshi charts this out.

The growth the IEA says is required for this expensive technology which allows for the extended use of fossil fuels is the inverse of their history of failed predications for solar energy uptake.

Left chart: Ketan Joshi. Right chart: Auke Hoekstra

Yet these pathways, from an organisation with a history of underestimating the growth of green technologies and overestimating the dirty, are the ones the finance sector will turn to. Unwittingly, for most, these pathways will allow the finance industry to assume that its continued investment, financing, insuring and engagement with the companies responsible for driving carbon emissions is proportionate.

Rather than getting ahead of the issue, pathways like these act as a parachute for the old economy, slowing the transition.

It is greenwash wrapped in a greenwish.

Bullsh*t squared.

But this is not even the biggest problem. As Sunita notes:

“net-zero is intrinsically inequitable. … Given the fact that there is a huge and completely disproportionate difference in the emissions of the old-developed world and now newly developed China and the rest of the world, it would be logical to say that if the world needs to be net-zero by 2050, then these countries needed to have already turned net-zero or do so by 2030. No later…. Then it would provide space for countries like India — way below in the historical emissions and current emissions — to declare a net-zero goal by 2050.”

With the history of slow change in much more straight forward areas like disclosure and director accountability, concerns like those expressed by Sunita cannot be ignored.

To ensure that net zero commitments do not spawn another decade of bullsh*t, those committed to climate action must influence change in the real economy, as fast as possible. Fair shares, distant goals and net-net caveats must not be allowed to stand in the way of a more rapid transition.

So what can be done?

Trying to derail the net zero train would be both futile and further delay action. In a recent piece, From win-win to net zero: would the real sustainability please stand up? Duncan Austin points out that despite its issues, net zero has changed something fundamental in investors understanding of what sustainability actually means. Rather than the win-win philosophy of a little more “sustainability” always being a good thing, net zero implies an absolute threshold for sustainability (notwithstanding the net-net caveat).

In such a frame, the discussion changes from a highly polluting company who is better than a peer being a better investment (all other things being equal), to the question of whether these companies are willing and able to change enough, and in time, to support the transition — and if not, what is to be done about it?

In this way net zero has not just raised the bar for a group of investors, financiers and insurers who had long baulked at such commitments, it is forcing them to think about the world in a completely different way.

Meeting the 50% reduction goal by 2030 called for by the Net Zero Asset Manager Initiative, means more than 6% reductions annually from now until then, and faster afterwards.

Every year of delay steepens the curve.

Companies and their financiers must be held to that new standard.

Jonathan Foley, Executive Director of Project Drawdown, a research NGO which has identified 80 existing technologies which, if scaled, could deliver the 1.5oC climate goal, has outlined what that new standard demands and consequently what investors should strive for and expect:

  1. Cut your own emissions towards zero, not “net zero”, as quickly as possible.
  2. Only use carbon removal as a last resort — for truly unavoidable emissions.
  3. Pay the “Social Cost of Carbon” for your ongoing pollution.
  4. Don’t stop here: Address your historic emissions too.
  5. Carefully weigh issues of climate justice in everything you do.
Coal Policy Tool

Other NGO’s have also recognised the gap between net zero commitments and actions. Groups like Reclaim Finance have developed the Coal Policy Tool which outlines the policies of more than 450 financial institutions, pointing out the gap between the demands of net zero and these organisations’ current approach. Coal is the single largest contributor to carbon emissions yet only 21 having robust coal policies.

Similarly, Share Action has developed its assessment of asset managers’, insurance companies’ and banks’ approach to climate change, including voting practices.

Rather than see these NGO efforts as threats, organisations across finance should embrace the added accountability as essential ingredients in a race to zero.

We must stop debating things which don’t matter, like engagement vs divestment.

Engaging with companies to drive change and divesting (or not investing in the first place) where a company is misaligned with an investor’s philosophy and objectives both have a place in the race to zero. However, actions need to be fit for purpose and free of bullsh*t.

A key area of focus for investment organisations and the NGOs holding them accountable needs to be company directors. Voting for directors is the most powerful lever investors in polluting companies have, and they must use it. The NGO Preventable Surprises calls this Forceful Stewardship.

Adapted from treehugger.com

Even with the IEA’s reliance on carbon capture and storage, its net zero scenario makes clear that capital expenditure for exploration or developing already discovered fossil fuel reserves is unacceptable — there is no “net-net” caveat here.

If current directors are unable to deliver those outcomes, new directors are needed. Non-binding shareholder resolutions are no longer enough.

Large investors need to stop free-riding and lead these efforts. However, if these investors are slow to do so, coalitions of smaller investors and NGOs must propose new directors with mandates to do what’s required.

Large investors must be forced to choose. If engaging with polluting companies does not feel uncomfortable, it should. If investors aren’t willing to drive this level of accountability, they should divest rather than provide continued cover for inaction.

For those who choose to divest and instead focus capital on the new economy or rapidly transitioning companies (likely a better investment anyway), their responsibilities do not end there. All companies rely on the old economy, positive engagement from their investors can accelerate change to meet the high standard Dr Foley has prescribed.

In addition, public policy changes from the removal of fossil fuel subsidies to the implementation of carbon pricing are vital for accelerating the transition and are in the interests of the companies these investors own. This alignment offers unconflicted motivation for these investors to engage in policy debates with focus and purpose — an annual letter to the G20 or other forum is not enough!

US ‘Sustainable’ Fund Flows. Source Morningstar.

Sustainable investors must also tell the positive stories of new economy investment. The stories of investing in and financing solutions offers hope and drives the reallocation of capital which already underway.

These investors, banks and insurance companies must show the world that there is better way.

Humanity has a small window through which a stable climate can still be achieved. Only if we can distinguish the bullsh*t from the actions driving real and equitable change at the scale and speed required will we make it through. As Sunita Narin says:

“Let’s not end up losing another decade squabbling over yet another chimera. Climate change is real. It is time we stood up to it.”


Pablo Berrutti is Altiorem’s founder, he has deep investment and financial services experience including responsible investment, risk management, marketing, communications and strategy. He is currently a senior investment specialist for Stewart Investors Sustainable Funds Group and was formally the Head of Responsible Investment, Asia Pacific for Australia’s second largest fund manager.

For more resources visit www.altiorem.org, a community-built, freely available library that supports its members to be more effective sustainable finance advocates and to implement the changes needed to make it reality.

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