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.
What does carbon neutrality really mean to your business and why should you consider a carbon neutral commitment?
What does carbon neutrality mean?
Essentially carbon neutrality means accounting for and reducing your CO2 emissions 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?
This sounds like a lot of 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 recognized as a real performance lever for organizations and has many advantages:
Future-proof your organization
The Paris Climate Change Agreement has now been ratified by 176 nations worldwide. These nations will come under increasing pressure to meet their commitments. While the United States has signaled that it may withdraw, this could change before the deadline that occurs shortly after the next presidential election. In parallel, the We’re Still In campaign continues to gain momentum with over 2,800 organizations signed on from over all 50 states.
In any case, legislative changes are likely, if not imminent globally. Making a carbon neutral commitment and putting a strategy in place today will ensure your organization is ahead of the curve and fit for the changing regulatory landscape of tomorrow.
In addition to this, the more organizations that commit to reducing their emissions, the more likely we are to limit global temperature rise to less than 2 degrees 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 industriesand fund managers as well as insurers are beginning to penalize 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 recognized 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 at the moment and if could set you apart from others in your industry. In the beverage sector, Carlsberg has committed to carbon neutrality with its ‘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 last year, enabled them to be seen as innovators in their industry.
Carbon Neutrality reinforces your current disclosures as the process to achieve neutrality provides you with valuable data. This includes long-term targets that can be used in your annual reporting and will likely make it easier for you to complying 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, identifying energy efficiency measures will likely reduce your energy costs. Many organizations 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. Furthermore as a de facto price on carbon, offsets are a key way to support clean development globally while also acting as an incentive to reduce emissions further.
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. Developing a clear strategy and following best practice with using internationally recognized offset certification standards, projects 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 demonstrates contributions to the Global Goals, demonstrate your commitment to social improvements and build a more prosperous and sustainable world that will benefit us all long-term.
There are significant opportunities awaiting you in a carbon neutral strategy. In the wake of Paris, nations around the world have agreed that our future must be a de-carbonized one meaning the pressures will continue to mount as the deadlines for our goal move ever closer. Now is the time to make the most of these opportunities.
Our latest eBook explains how to implement a carbon neutral strategy and provides a practical approach to achieving it. Are you ready to start your countdown to zero?