The opportunity in Carbon Neutrality

Published 23rd January 2019 by Lucy Haines

This post is also available in: Fr (Fr) Es (Es)

Since COP21 and the adoption of the Paris Agreement, a growing number of nations and businesses have pledged to take action on climate change and made a commitment to a common goal: carbon neutrality.

But what does this really mean to your business? Why should you consider a carbon neutral commitment?

What does carbon neutrality mean?

Essentially carbon neutrality means accounting for and reducing your emissions of CO2 across the value chain of your business, and offsetting unavoidable emissions with natural carbon sinks and/or carbon credits. You are aiming for net zero carbon emissions to gain the accolade of a carbon neutral business.

Why consider carbon neutrality?

Sound like a lot work? While it’s true this could represent a big commitment to you (it may not be depending on your business), carbon neutrality could actually be a significant opportunity. It is becoming recognised as a real performance lever for organisations and has many advantages:

Future-proof your organisation

The Paris Climate Change Agreement has now been ratified by 184 nations worldwide. These nations will come under increasing pressure to meet their commitments. To do so, legislative changes are likely, if not imminent. Making a carbon neutral commitment and putting a strategy in place today will ensure your organisation is ahead of the curve and fit for the changing regulatory landscape of tomorrow.

In addition to this, the more organisations that commit to reducing their emissions, the more likely we are to limit global temperature rise to the IPCC recommended 1.5 degrees Celsius and counter catastrophic impacts from climate change, the physical impacts of which could have a negative effect on your business operations.

Meet the growing expectations from stakeholders

Businesses are facing mounting pressure from consumers and investors to show they are taking action on climate change. There are signs that banks are moving towards financing policies that no longer support high carbon industries and fund managers as well as insurers are beginning to penalise companies that fail to act on climate change. This represents a lot of pressure on businesses and a carbon neutral commitment enables you to show clearly, with a recognised approach, that you are listening to stakeholders and taking action.

From an internal perspective, research has shown the importance that young people particularly place on working in companies that make a positive impact. This is an opportunity to attract talent and engage your current workforce with strong values and a clear commitment to climate action.

Stand out from the crowd

Carbon neutrality provides a competitive edge and it could set you apart from others in your industry. In the beverage sector, Carlsberg have committed to carbon neutrality with a ‘Together towards zero’ initiative. They see this as important, not only to contribute to climate action, but also as part of its “industry-leading sustainability ambitions”. This is a valuable opportunity for them to stand out in the market, a promotional opportunity to engage their customers and employees, and, with the opening of the first carbon neutral brewery in Sweden in 2017, enabled them to be seen as innovators in their industry.

Carbon neutrality will also help to bolster your current disclosures as the process involved in obtaining neutrality will provide you with valuable data. This can be used in your annual reporting and will likely make it easier for you to comply with new developments in disclosures, such as the TFCD recommendations. There is an opportunity now to sit above the standard benchmark in disclosures.

Reduce costs with energy efficiency measures

As you work to reduce your emissions of CO2 you will identify energy efficiency measures that will likely reduce your energy costs. Many organisations see significant savings.  Microsoft initiated their smarter building project in 2013 using software solutions to make their buildings more energy efficient, their processes more streamlined and their working environments more comfortable. They saved approximately $ 1.5 million in energy in 2013 and recovered their investment in just 18 months.

Contribute to the Sustainable Development Goals

The SDGs were established by the UN as a call to action to end poverty, protect the planet and ensure all people enjoy peace and prosperity. The profile of these global goals is rising along with the pressure on businesses to show they are having a positive impact on society.

To achieve neutrality many companies purchase carbon credits to offset residual emissions. The right projects should add more value than simply reducing carbon for offsetting. High quality projects help to embed sustainable development in communities, stimulate economies, introduce new sustainable technologies and make positive contributions to equality and well-being. Supporting such projects could really help you disclose against these vital goals and demonstrate your commitment to social improvements and building a more prosperous and sustainable world that will benefit us all long-term.

In addition to this, the more organisations that commit to reducing their emissions, the more likely we are to limit global temperature rise to the IPCC recommended 1.5 degrees Celsius and counter catastrophic impacts from climate change, the physical impacts of which could have a negative effect on your business operations.

There could be significant opportunities awaiting you in a carbon neutral strategy. Regardless, the latest report of the Intergovernmental Panel on Climate Change (IPCC) published last year in October stated that we need to reach global net zero emissions by 2050 if we are to avoid the worst impacts of climate change. The heat is now on, in more ways than one. Now is the time to make the most of these opportunities.


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At EcoAct we are driven by a shared purpose to make a difference. To help businesses to implement positive change in response to climate and carbon challenges, whilst also driving commercial performance.
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