Climate change is no longer a distant “problem” that people on the other side of the world or later generations have to deal with. Climate change is here, and it’s affecting our lives everywhere. To avert its worst effects, we need to rapidly reduce those 50 billion tonnes of greenhouse gas emissions that we emit every year. We need to reach zero.
Businesses also play a key role in addressing climate change.
It is time for thought leaders to show that they are serious about climate action, and they have set ambitious net zero targets aligned with the latest science (the 1.5C limit) with actual plans (with milestones & indicators to check the progress) to deliver on their promises.
This article provides a simple guideline to turn climate ambition into real action in your organization and achieve net zero emissions.
Setting a net zero strategy comes with incredible benefits for businesses: it will reduce the climate-related risk exposure, identify new businesses opportunities (therefore increasing your competitiveness & innovation), attract investments and talents, safeguard your reputation, give you a hedge on new/tighter regulations on climate change and many more.
If you want to unlock all these benefits and more, you need to start now. But first, let’s start with the basics.
What does net zero mean ?
There is a distinction between net zero carbon dioxide emissions and net zero GHG emissions.
According to the latest IPCC report, we reach net zero carbon dioxide emissions when anthropogenic carbon dioxide (CO2) emissions are balanced by anthropogenic CO2 removals over a specified period.
It means that we do not add any further carbon dioxide to the atmosphere. And we balance the emissions we can’t avoid with carbon removals.
Achieving net zero CO2 emissions means that we will achieve stabilization of global warming.
We want net zero GHG emissions.
We know that the Paris agreement also covers other GHG emissions such as methane and nitrous oxide. So, it’s essential to understand that we want to reach net zero GHG emissions. When we reach and maintain net zero GHG emissions, global warming is projected to peak and then gradually decline.
What does net zero mean for your organization?
Net zero is a serious commitment; it does not mean stabilizing the emissions at a certain level and purchasing carbon credits that avoid, reduce or remove emissions from the atmosphere. Buying carbon credits does not replace the need for your organization to reduce your emissions year after year. It means that you need to reduce your emissions year after year, compensate and eventually neutralize only unavoidable emissions.
Let’s remember the big picture. The aim is to go to net zero GHG emissions, a state where there is no incremental addition of GHGs to the atmosphere, as fast as possible.
Now, let’s start the journey toward net zero GHG emissions: where do you start?
Your six steps plan to net zero
- Measure your GHG emissions through your entire value chain. Start by defining your boundary, the type of inventory you want, and the emissions you will track (e.g., the sources of GHG emissions and their scope). If you can, it is better to have a third-party verified inventory and to include full scope 3 emissions (in addition to Scope 1 and 2). Remember that the quality of your data is critical, and you should follow a GHG quantification standard.
- Develop your unique strategy/plan to reduce your GHG emissions. Analyze your emissions and find ways to reduce them. Plan a trajectory to reduce emissions year by year across your entire value chain. And yes, this means Scope 1, 2, and 3. Your strategy must include interim targets with specific indicators of your business/sector.
- Set targets based on science and consistent with a 1.5ºC mitigation pathway. In October 2021, the Science Based Target Initiative (SBTi) developed the first science-based framework for companies to set net zero targets. The standard asks to set rapid, deep emission cuts across the entire value chain and set both near-term and long-term science-based targets. To give you an idea, we are talking about 90-95% of emission reductions in the long term and halving your emissions by 2030 in the near-term (5-10 years).
TIP: If your company prepares the CDP climate change submission, you already have a great starting point to assess your situation, and you can easily identify your areas of improvement. You might want to join the RE100, a global initiative bringing together the world’s most influential businesses committed to 100% renewable electricity. Having a 100% renewable electricity target might be part of your plan or not. There is no one size fits all. The right approach depends on your specific organization and where you are in your journey.
- Implement reductions in line with your plan.
- Measure & report your progress year by year. If you don’t have it, establish a committee to have a clear idea of the progress before the next reporting cycle.
- Now you can communicate your progress on climate action to your stakeholders, knowing that this is a credible, real commitment to solving climate change.
- Compensate/Contribute. For the emissions you haven’t been able to reduce yet, you might purchase high-quality carbon credits (you are going beyond your value chain). Carbon credits are much more than projects to avoid, reduce or remove GHG emissions. They unlock climate finance for developing countries and communities on the frontlines and contribute to their sustainable development. However, these investments must be in addition to deep emission cuts, not instead of them. By purchasing credits, you create an internal cost-based incentive mechanism in your organization; you are providing an economic incentive to reduce your emissions quicker.
It is the start of an amazing journey. Net zero is not a task. It is a process within your organization, as sustainability is good business and not just a reporting exercise on social, environmental, and economic aspects.
- Repeat & Repeat by incrementally reducing your emissions every year and purchasing carbon credits for the unavoidable emissions until you achieve your long-term target. You will then remove (neutralize) unavoidable residual emissions with permanent removals and carbon storage from the atmosphere and achieve net zero.
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