Mark Carney, a leading figure behind this year’s global climate talks, has sparked concern among green advocates with recent remarks claiming the half-trillion-dollar asset manager where he works zeroed out pollution across its portfolio. His comments call into question what it takes to attain net-zero status.
Carney is a former Bank of England governor who is currently advising U.K. Prime Minister Boris Johnson on the upcoming COP26 climate summit. He’s also a vice chair at Brookfield Asset Management Inc., Canada’s largest alternative asset manager. In a Feb. 10 interview with Bloomberg Live, Carney said Brookfield had fully neutralized emissions from its holdings.
“Brookfield is in a position today where we are net zero,” Carney said, referring to all of the company’s assets. “The reason we’re net zero is that we have this enormous renewables business,” he added, noting “all the avoided emissions that come with that” had compensated for the planet-warming toll of other investments.
Its operations have a small carbon footprint, measured at about 5,200 metric tons of carbon dioxide in 2019, but inside its $600 billion portfolio are investments in coal and other fossil fuels. In a statement posted on Twitter on Friday, Carney said “I have always been—and will continue to be—a strong advocate for net zero science-based targets, and I also recognize that avoided emissions do not count towards them.”
Carney was responding after his earlier comments drew criticism from experts who say his position misrepresents what’s required to cut an investor’s climate impact. “Most large asset managers have a renewable energy fund,” said Ben Caldecott, director of the University of Oxford’s Sustainable Finance Program. “Simply having one does not make you net zero.”
The dispute hinges on accounting for “avoided emissions,” in which a company takes credit for refraining from high-polluting actions. An investment in wind turbines might be claimed as avoiding an investment in the same amount of energy produced by coal.
The Science-Based Targets initiative (SBTi), widely regarded as the gold standard for climate plans, does not count avoided emissions in its framework. “Avoided emissions accounting can be useful for some purposes, but using these avoided emissions to meet net-zero claims is not credible,” said Alexander Farsan, global lead on science-based targets at WWF, one of the SBTi partners.
SBTi does not recognize any investor at Brookfield’s scale that qualifies as net zero. “It’s virtually impossible for a company to be a net-zero company now,” Farsan said.
Brookfield stands behind the claim it has reached net zero. “We believe emissions avoided through renewable power generation are critical to the transition to net zero, given approximately three-quarters of global emissions today can be tied to the energy sector,” said spokeswoman Claire Holland. “We recognize that avoided emissions are only one element of the transition to a net zero global economy. We intend to go much further in supporting that transition.”
Oxford’s Caldecott, by contrast, argues for a more stringent standard that doesn’t rely on avoided emissions. “Such commitments are not credible and represent greenwashing,” he said. Climate advocates are concerned Carney’s influence will give weight to Brookfield’s approach.