Yes, It is the expectation of all capital providers (Banks, Bond, and ESG rating agencies) and securities regulators that all material scope 3 GHG and carbon emissions are measured, reported, and increasingly will need to be third-party assurance verified.  The financial materiality test would be a greater than a 3% negative impact on revenue or operating profits as the cost of carbon becomes real in companies around the world.

While every company will have a different net zero transition plan and business strategy to achieve a net zero, zero, or carbon-neutral business model, all companies must have at least five core eco-efficiency plans, processes, targets, and disclosures to ensure their Net Zero Transition plan is bona fide and legally defensible. 

With plans, processes, and investments for 100% Carbon-Free Energy, Energy Efficiency & Conservation are at the core.

Yes, 90% of companies will be required to change their current “Board Approved” Business Strategy, Enterprise Performance Metrics, key strategic targets, and incentive designs for Net Zero.

This will include aligning the long-term incentive plan design to a rolling 5-year plan:

– 5, 10, and 15-year Research and Development Innovation targets 
– 5, 10, and 15-year New Zero Emission product and solution revenue targets 
– 5, 10, and 15-year GHG reduction targets 
– Employee Safety and well-being targets 
– 20-year C-Suite succession planning processes for strategic leadership talent with the potential to transform business models (net zero, circular, digital) 
– 5, 10, and 15-year Carbon Adjusted Return on Capital (CAROC) targets

Companies missing processes for all the above and related 5, 10, and 15-year targets and incentive design may find that their Corporate Directors and Officers are in breach of their legal fiduciary duty if challenged by their shareholders in a derivative action against the company.