Net-zero FAQs: your top 10 questions answered

Net-zero. A term on which the climate hopes of a planet are hung. 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 the most important ones.

Net-zero pledges have been set by countries, cities and businesses as the deadline of halving global emissions by 2030 and limiting global warming to 1.5^oC looms. Pledges have increased but rapid and urgent climate action is still needed if we are to be in with a chance of achieving net-zero by 2050.

Is there really such a thing as net-zero and how is it defined?

There is such a thing as net-zero. However, the challenge with net-zero was the lack of an internationally recognised definition until the recent release of the SBTi’s Net-Zero Standard. Essentially, net-zero is a state where no incremental greenhouse gasses are added into the atmosphere. This means achieving a balance between carbon emissions and carbon removals through a combination of emissions reduction and carbon sequestration.

According to the Net-Zero Standard 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 relatively safe levels. So, it really is a very real and urgent goal for all of us that is supported by science.

If we look beyond the buzzword, what science is telling us is that we must limit global warming to 1.5^oC 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. This is no small task but should be fundamental to any definition of net-zero.

What is the link/overlap between a net-zero target and SBTs?

In October 2021, the Science-based Target initiative (SBTi) launched the first Net-Zero Standard for corporations, outlining a clear blueprint for businesses to set credible net-zero targets aligned with the latest science.

Net-zero requires rapid decarbonisation and, therefore, we would recommend that companies set near-term and long-term science-based targets for emissions reduction in line with this latest standard. This will ensure that your business is on a reduction pathway aligned to limit global warming to 1.5^oC, which science tells us is necessary if we are to avoid the most catastrophic impacts of climate change.

Obtaining net-zero requires a 90-95% reduction in your emissions (in line with science) and any carbon credits used to account for the remaining 5-10% of emissions should be from verified projects that sequester carbon from the atmosphere.

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.

1. 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. We 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.
2. 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.
3. 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 impacts has the COVID-19 crisis had on net-zero?

Obviously COVID-19 has meant some enormous challenges to businesses (not to mention individuals) and has been an urgent priority to factor in which inevitably will have some impact on some companies’ plans for sustainability.

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, more companies are 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 continue to 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 are 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?

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, companies should 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. We can however demonstrate that we are taking every action possible today to take responsibility for our impacts. By supporting carbon offsetting projects with multiple co-benefits that protect and restore precious carbon sinks, we can help to build renewable infrastructure and support communities.

This is where offsetting can play a vital role in the transition to net-zero. In line with the new Net-Zero Standard businesses are required to achieve full emissions reductions of 90-95% of emissions and offset the remaining 5-10% via projects that sequester carbon from the atmosphere. In addition, while progressing towards achieving this, companies are encouraged to invest in carbon offsetting projects that avoid or reduce emissions outside their value chain.

How do we influence policy to accelerate change?

First and foremost, make a public commitment to net-zero, following best practice. It is important to communicate your net-zero targets in a transparent way with clear details on your objectives and targets. 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.

Get involved in consultations on climate change within your sector to make your voice heard. Ensure that governments 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?

We are already starting to see pledges from companies for carbon positivity (or negativity depending on the preference in terminology). While no commitment can be too ambitious when it comes to climate change, we advise against using terms in your claims that have not been standardised. Following the SBTi Net-Zero Standard, net-zero is now a globally recognised framework for business and should be the long-term goal of your organisation to ensure climate commitments are credible, robust and in line with the latest science.

 

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 or our blog post on how to become a net-zero business.

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