2023 was the hottest year on record. It’s no secret that human-driven activity has a serious impact on climate change and the global temperature increase. One of the highest contributors to climate change are corporate greenhouse gas emissions. As more and more consumers seek to reduce their impact on climate change and transition to a more sustainable future, companies are increasingly looking for ways to reduce their carbon footprint – which has helped propel the corporate net-zero conversation in recent decades.

Roughly 70% of all industrial emissions produced since human-driven climate change was officially recognized (1988) are due to just one hundred energy companies. When other business sectors are included, this percentage is unfortunately much higher.

To address these challenges, a growing number of businesses are incorporating standardized net-zero frameworks into their corporate strategy. In summary, net-zero entails cutting greenhouse gas emissions to as close to zero as possible, with any remaining emissions re-absorbed from the atmosphere by oceans and forests. In 2021, The International Energy Agency released their Seven Key Principles for Implementing Net-Zero which were adopted by most major member nations to help guide their strategies to meet the 2050 Paris Agreement climate commitments. To keep global warming to less than 1.5 degrees Celsius, member countries’ emissions need to be reduced by 40-45% by 2030 (from 2005 levels) and net-zero must be achieved by 2050.

Companies such as Amazon, Apple, Ford, and Nestle have made commitments to become net zero by years ranging from 2025 to 2040, while more than 130 countries have pledged to reach net zero emissions before 2050.

There are principles that can help guide companies in developing tailored approaches to meet net-zero goals well ahead of global commitments. The two most recognized standards are the Science Based Targets or SBTi Net-Zero Corporate Standard (which can be found here) and the ISO Net-Zero Guidelines. Companies should also look to the Greenhouse Gas Protocol Corporate Standard for calculating emissions and conducting audits. The Net Zero Tracker is a reliable resource that monitors the progress of entities towards their net zero goals.

Net-Zero Strategy – The journey to net-zero begins an overall strategy. We Mean Business Coalition has published a guide called the 4 A’s of Climate Leadership which includes sections on ambition, action, advocacy, and accountability. These four A’s encapsulate the essence of what it takes to become net-zero and serve as a good benchmark for designing corporate sustainability efforts.

Emissions Audits – Typically, the first step to becoming net zero is to understand the full scope of the company’s emissions. This entails setting a base year and conducting a greenhouse gas inventory or emissions audit – otherwise known as establishing a baseline. This means defining all the areas of the business and supply chain that have an impact in terms of carbon emissions. The different types of emissions are categorized as Scope 1, 2, and 3. According to the Greenhouse Gas Protocol, Scope 1 emissions are direct emissions from owned or controlled sources (like fuel emissions from company-owned vehicles), Scope 2 are indirect emissions from the generation of any purchased energy , and Scope 3 are all indirect emissions that occur in the supply chain of the reporting company (ex: purchased raw materials, operational waste, business travel, distribution, leased assets). Most companies follow the methodology outlined in the various Greenhouse Gas Protocol guidance documents.

Setting Targets – Once companies complete a baseline audit, they can create their near and long-term targets and execute on a more comprehensive, data-driven roadmap aimed at meeting their goals. Near-term targets should cover emissions reductions for the next 5-10 years, aiming to halve emissions by 2030, while long-term net-zero targets should see a reduction of 90-95% of emissions by 2050.

There are many publications that have covered target formulation in detail – two of those include articles by Sustain Life and NetO. The process involves setting base years and target years, understanding the full scope of emissions audits, setting science-based target boundaries for both near-term and far-term targets, and designating clear methodologies, terminology, and communication practices.

Most forward-thinking companies are setting targets with a 1.5-degree Celsius climate scenario in mind, which is the ISO recommendation. According to SBTi, companies should not make any net-zero claims until long-term targets are met – and companies cannot claim success until they’ve reduced emissions by at least 90% by 2050.

Mitigation Pathways – Planning various mitigation pathways will be a key part of the overall strategy. A notable example of decarbonization pathways is the transition from fossil fuel-based energy to renewable energy sources like biomass, hydro, wind and solar power. This involves implementing policies, investing in infrastructure, and encouraging technological advancements to facilitate the shift towards low-carbon energy production and processes.

Emissions Reduction, Carbon Offsetting & Neutralization – Once systems are in place to reduce a company’s operational carbon footprint, carbon offsetting efforts should be considered. This refers to the process of balancing or offsetting greenhouse gas emissions that cannot be eliminated entirely.

In the case of the paper, paper-based packaging and print industries, the Carbon Balanced Paper program is an example of a successful carbon offsetting program. The program works in partnership with World Land Trust, a global conservation organization, to protect highly biodiverse forest habitats in the tropical regions of the world. Once approved, organizations can use the World Land Trust logo on their products as a sign of commitment to climate action and corporate responsibility. The total amount of CO2 balanced and land area preserved is quantified in a unique certificate, which an organization can use in its environmental reporting and marketing.

In the past eight years, more than 5,000 brands have used Carbon Balanced Paper to offset their carbon emissions, helping protect over 75,000 acres of forests that have offset over 470,000 metric tons of CO2.

As outlined in the above guidance documents, companies will also need to consider how they approach;

1) Advocacy & Stakeholder Engagement, and

2) Standardized Monitoring, Reporting, and Verification.

While achieving net-zero status may seem like a daunting task, the ongoing mission to contribute to net-zero targets is key to addressing climate change.

 

 

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