The road to net zero

Developing a net zero strategy for your company is a long-term process. The cornerstone of a company's net zero strategy is to drastically reduce carbon emissions and then neutralise any that remain.

The first step is to assess your starting situation, which means calculating your carbon footprint and identifying emissions hotspots. In addition to the standard net zero requirements, you should assess the opportunities and risks relevant to your company. What factors affect whether you can achieve the targets? Is the commitment to net zero currently feasible? Only then can you set concrete goals.

To assess whether companies' net zero strategies have a basis in the latest available science, the Science Based Targets initiative (SBTi) introduced the Corporate Net-Zero Standard. Based on the recommendations of the Intergovernmental Panel on Climate Change (IPCC), the SBTi developed methods and criteria for companies to set scientifically sound net zero targets that are consistent with limiting the global temperature increase to 1.5 °C. The Corporate Net-Zero Standard covers the entire value chain of a company, meaning scope 1, scope 2, and scope 3 emissions.

Companies are made accountable by publicly committing to a net zero pledge. After the targets are validated by the SBTi, the company's progress is published and trackable via the SBTi website. 

Climate change has already had observable damages in every region all over the world: rising temperatures, prolonged periods of drought and dryness, heat waves, flooding and other extreme weather events are becoming increasingly intense. These negative impacts will soon become worse unless greenhouse gas emissions are quickly reduced.

The climate crisis is also a humanitarian one. The countries that contribute the least to global warming are those that are hit the hardest by the climate-related consequences. Deadly heatwaves, droughts, storms, and floods are particularly affecting areas of the Global South.

Taking climate action is also significantly beneficial for businesses. According to the Tyndall Centre for Climate Change Research, the more we reduce global warming, the more economies save costs and drive growth. Meanwhile, your contribution to reduce the impact on the planet and making the transition to a net zero economy will make the difference for your growth. 

To reach the net zero target, considerable changes will need to take place well before that date, and ideally before 2030. Businesses from all industries and of all sizes have a role to play in mitigating climate change and making the transition to a net zero emission economy. But what will it take to fulfil that ambition?

Step 1: Calculating your carbon footprint

The first step for any business is to understand its carbon footprint. A carbon footprint for a company means the total amount of all the greenhouse gases emitted directly or indirectly through its activities. To measure this accurately, the Greenhouse Gas Protocol has created a global, standardised framework.

According to the GHG Protocol, you set targets that cover the following three scopes:

• Scope 1: Includes all emissions released directly from your company such as your company's vehicles and facilities.
• Scope 2: Includes indirect emissions that your company produces such as your building's electricity usage.
• Scope 3: Includes all other emissions generated along your entire value chain, including raw materials, logistics, business travel by the team and how your employees commute to work.

Every good or service also has an impact on the environment. Calculating a product's carbon footprint means assessing and measuring the quantity of greenhouse gas emissions that are produced or consumed during the entire life cycle of a product, such as raw materials, manufacturing, packaging, and distribution. Additionally, it permits you to make your products more sustainable and in the long-term reduce the costs of production.

Step 2: Setting emission reduction targets

Drastically reducing your company's carbon emissions is by far the most important step you can take on your net zero journey. There are many steps that businesses of all sizes can take to get there, for example:

• Materials: Implementing recycling collections and use recycled materials such as purchasing recycled paper and working with sustainable suppliers.
• Transport: Encouraging the use of public transport or car sharing for business trips or switch to hybrid or fully electric company cars and fleet vehicles; drastically reducing flight intensity and frequency.
• Communication: Switching to online meetings and online events.
• Facilities: Improving the efficiency of your existing energy assets to avoid energy waste; sourcing as much energy from renewable sources as possible.
• Investments: Investing in efficient, reliable low-carbon technologies that reduce carbon emissions and costs.

Step 3: Contributing to climate projects

As not all companies are able to avoid all carbon emissions at once, taking responsibility for unabated carbon emissions is necessary. There is a wide range of climate projects that help to restore the planet's carbon cycle.

The carbon cycle consists of sources and sinks. The sources, for example, the burning of fossil fuels, emit carbon into the atmosphere and their increase is the biggest contributor to climate change. The sinks, such as plants, the ocean, and the soil, absorb carbon from it and serve as natural storage systems.

Climate projects, such as afforestation efforts or the expansion of renewable energies or providing clean water solutions to developing countries, contribute to restore the carbon cycle and at the same time help to achieve the UN Sustainable Development Goals (SDGs) worldwide.

However, businesses must be aware that supporting climate projects alone is not an alternative to reducing carbon emissions.

Step 4: Communicating your progress

Once you have successfully put a climate action strategy in place within your company, it is very important that you communicate your actions in sustainability and genuine commitment to reducing the environmental impact of your company and products to your stakeholders and your customers.

Incorporate credible labels on your products illustrating your sustainability efforts to help people make smart choices. Ensure that the label provides full transparency about your climate action efforts.