Net Zero. A term on which the climate hopes of a planet are hung. A term which still doesn’t have an internationally agreed definition. A term that presents a lot of practical challenges. A term that raises a lot of questions. In this blog we aim to answer to them.
If you missed our webinar in July, we presented a live panel discussion with sustainability professionals from Danone, Experian and Farfetch. We asked our subscribers to put their questions to our experts and here are the answers to the Net Zero FAQs.
Is there really such a thing as Net Zero and how is it defined?
There is such a thing as Net Zero. Essentially it is an accounting term applied to carbon emissions. However, the challenge with “Net Zero” in this context has been the lack of internationally recognised definition and the absence of any universal guidelines on how to achieve it.
With no time to lose in limiting global warming, there is a growing consensus between climate experts in the sustainability sector who have been working with terms like “carbon neutrality” and “Net Zero emissions” for some time. Our definition is this: Net Zero is a state where we add no incremental greenhouse gases to the atmosphere. This means emissions output is balanced with removal of carbon from the atmosphere via carbon sinks (e.g forests, mangroves, carbon capture, etc). Essentially, what goes in, must be removed to equal Net Zero.
According to the Intergovernmental Panel on Climate Change (IPCC) it is crucial that we aim for Net Zero by 2050 at the latest. This gives us a 50% chance of limiting global warming to safe levels. So, it really is a very real and urgent goal for all of us that is supported by science.
If we remove the buzz word and confusion about definitions, what science is telling us is that we must limit global warming to 1.5 degrees or well-below 2 degrees if we are to avoid the most catastrophic impacts of climate change. In real terms that means we need to reduce emissions by 7.6% every year between 2020 to 2030 if we are to achieve it whilst also increasing natural carbons sinks, which is quite a big task but should be fundamental to any definition of Net Zero.
How do you distinguish between carbon neutrality and Net Zero?
The terms carbon neutrality and Net Zero are often used interchangeably (they also carry slightly different connotations and usage in different countries) but despite the lack of internationally recognised definitions, there is emerging consensus on how these terms are distinct. This is how we distinguish them at EcoAct.
Carbon neutrality is the process of offsetting emissions to neutral on a specific parameter. It is achieved through purchasing carbon credits from offsetting projects that reduce or avoid carbon emissions.
Carbon neutrality plays a vital role in the transition to Net Zero. As the markets and technology for sequestering are developed, credits from projects that avoid or reduce emissions (e.g cleaner cookstoves, forest conservation, etc) are helping to protect the carbon sinks and precious ecosystems that we still have and so urgently need to preserve.
Carbon neutrality is achieved when you offset all your emissions with avoided or reduced emission credits or a mixture of all credit types.
Net Zero as mentioned is a state where we add no incremental greenhouse gases to the atmosphere. This means achieving a balance between carbon emissions and carbon sinks through a combination of emissions reduction within your business activities and carbon sequestration.
Obtaining Net Zero requires large reduction in your emissions (in line with science) and any carbon credits used should be from verified projects that sequester carbon from the atmosphere.
What is the link/overlap between a Net Zero target and SBTs?
Science-based targets, rather than being removed from Net Zero should be an integral part of a Net Zero strategy.
Net Zero requires rapid decarbonisation and, therefore, we would recommend that companies look to set a science-based target for emissions reduction. This will ensure that your business is on a reduction pathway aligned to limit global warming to 1.5 degrees or well-below 2 degrees, which science tells us is necessary if we are to avoid the most catastrophic impacts of climate change.
Having these targets in place means businesses can demonstrate a credible commitment to reducing emissions as part of their Net Zero strategy.
What are the major challenges to tackling Net Zero and how do you overcome them?
There will undoubtedly be many challenges along the journey but here are some of the major blockers to getting your Net Zero strategy off the ground.
- Gaining buy in – a common question for sustainability managers is “How do I get the rest of the business on board, particular senior management?”. The good news is that this job is starting to get easier. For our speakers on the webinar, they are witnessing a growing ambition to tackle climate through all levels of the business, which is helping to drive forward change. There is plenty of compelling evidence that investors, employees and customers want businesses to take action on climate change, that inaction is a huge business risk and that there is great opportunity in action – what is good for planet is good for business. Team engagement will be really important. Educate the wider teams about why your targets are so important and what their roles are in the journey. Involve them in the decision-making. This will mean they are much more likely to get on board and, as Beth Vosper, Farfetch’s Sustainable Business Manager explained to us, you will have much less of a challenge and work to do later!
- Competing with other business priorities – It can be hard to compete with other business priorities that could have really clear revenue driving outputs compared to some of your sustainability actions. Again, this is going to be about making the business case for the long-term resilience of the company and reputational returns. You might find our TCFD eBook useful if you do need help making the financial case for climate action.
- Data collection and reporting – a sustainability manager could spend most of their time collecting data and reporting, which often feels at the expense of concerted action to drive change. Specialist software systems and external support can reduce the data collection and reporting burden considerably so make sure to have the right systems and processes in place to lighten the load and ensure the main focus is on delivering the strategy.
What are the impacts of the COVID-19 crisis on Net Zero?
Obviously COVID-19 has meant some enormous challenges to businesses (not to mention individuals) and a new urgent priority to factor in which inevitably will have some impact on some companies’ plans for sustainability, not least because of the impending recession.
Recession inevitably leads to a reduction in discretionary spend. The question, therefore, is whether climate is seen as discretionary or not? We’ve seen a huge increase in pressure around climate change in the last couple of years and with the post-Covid imperative to build back better or have a green recovery, there are likely to be a greater number of companies seeing this as a necessity.
COVID-19 has provided a unique opportunity to re-think our ways of working. It has also demonstrated that collective action is possible, science matters and should be taken seriously and that governments can and should act rapidly to lead. How we handle the recovery from COVID-19 will be crucial to our ability to achieve Net Zero.
What radical changes are required to become Net Zero emissions for energy intensive industries?
Ultimately, this will depend on the company or sector as each one is unique.
For example, if it is an airline, then investment in fleet changes (electric and hybrid plane technology) and sustainable fuels will be necessary. This means investing in technologies that are not necessarily commercially viable at this time but crucial for reaching Net Zero, minimising global heating, and for the future resilience of the airline industry.
Perhaps the most radical changes required for all energy intensive industries is to invest heavily in innovation and have a more future-focussed approach to business.
How do you reconcile Net Zero with the many other sustainability challenges? For example, how do we make circular thinking central to the Net Zero agenda?
This is a really good question. The circular economy has enormous potential to reduce our emissions and should be integral to the Net Zero agenda.
Obviously, we do need to be careful when making changes to address the circular economy that we are not shifting the emissions burden elsewhere, but the idea behind circular thinking is to ensure that there are no leakages in the system, and this also should include emissions as well as waste.
We would recommend conducting Life Cycle Assessment (LCAs) on your products and services or even thinking about an Organisational Life Cycle Assessment (OLCA) i.e one that doesn’t just look at one product in isolation but many if your company has them. In so doing it is possible to understand the various impacts of our activities through the life cycle, perform comparative analysis of different choices so we can make informed better ones, and find opportunities to innovate.
We would also recommend that this process isn’t a one-time activity but regularly updated to activate a cycle of continual improvement and ensure all sustainability priorities are aligned.
How do I tackle the most challenging area of my emissions: Scope 3?
Scope 3 emissions could look quite different for each organisation.
The first and most important thing is to identify the hotspot areas in your Scope 3. There may be aspects of your Scope 3 that are particularly challenging and out of your control. If they are of smaller materiality, then it is ok to move them to the lower priority list.
We’d recommend focusing on the largest areas of your emissions as well as what is important to you and your stakeholders, then you can understand which areas to focus your energies on and which levers to pull.
For more detailed information on tackling Scope 3 and a supplier engagement case study, you can access our Factsheet which includes our six step methodology to taking action on your Scope 3 emissions.
What role does offsetting play in Net Zero?
Net Zero will require rapid decarbonisation and, therefore, we would recommend that companies look to set a science-based target for emissions reduction as part of a Net Zero strategy. Having these targets in place mean businesses can demonstrate a credible commitment to reducing emissions as part of their Net Zero strategy.
Unfortunately, we are not going to all be Net Zero tomorrow and eliminating all emissions is going to be difficult (particularly in the short term), but we can demonstrate that we are taking every action possible today to take responsibility for our impacts and support sustainable development projects that protect and restore precious carbon sinks, help to build renewable infrastructure and support communities in developing sustainably. This is where offsetting and the voluntary carbon market can play a really vital role in the transition to Net Zero.
How do we influence policy to accelerate change?
First and foremost, make a public commitment to Net Zero. The more of us that do, the more we can start to collectively activate change and make the global goal achievable. It will also continue to send a message to governments that this is an important priority for business, and we need their collaboration.
As Melissa Goncalves Ferreira, Global Director of Corporate Responsibility and Community Relations for Experian, advised in our Net Zero webinar, get involved in consultations on climate change within your sector to make your voice heard. Ensure that government get to hear about the considerations for your sector when it comes to targeting Net Zero and reducing emissions and how important it is to you.
Should we aim for “carbon positivity” rather than Net Zero?
This is a really good question. We are already starting to see pledges from companies for carbon positivity (or negativity depending on the preference in terminology).
No commitment can be too ambitious when it comes to climate change. We should remember that achieving Net Zero globally by 2050 only gives us a 50% chance of avoiding the most catastrophic impacts of climate change according to the Intergovernmental Panel on Climate Change (IPCC) so the more ambitious we can be, the better.
More Net Zero FAQs answered
If you have any further Net Zero FAQs, or require more information on how companies can achieve Net Zero and even go beyond, you might find our A to Zero Factsheet useful.