Businesses play a pivotal role in reaching net zero carbon emissions. This objective, often referred to as "net zero," involves balancing the amount of carbon released into the atmosphere with an equivalent amount removed. This equilibrium is essential to mitigate climate change's adverse effects and achieve a sustainable future. Here are 5 steps businesses can take to actually reach the net zero carbon future.
Regulators worldwide are taking action on climate change. One of the most ambitious policies came in 2019 when the European Union announced the Green Deal. In essence, the European Green Deal is a comprehensive and ambitious policy initiative to address climate change, achieve carbon neutrality, and promote sustainable economic growth. It was introduced in December 2019 as the EU's flagship strategy to transform the region into the world's first climate-neutral continent by 2050. The Green Deal encompasses a wide range of policies and measures aimed at reducing greenhouse gas emissions, enhancing energy efficiency, protecting biodiversity, and fostering a circular economy.
Also in Europe, the UK Climate Change Act is a landmark piece of legislation enacted by the United Kingdom in 2008. It was the world's first legally binding climate change legislation and serves as a key framework for the UK's efforts to address and mitigate the impacts of climate change. The Act was designed to establish a comprehensive approach to reducing greenhouse gas emissions and promoting sustainability.
Elsewhere in the world, countries are passing legislation or taking action to ensure a framework where businesses need to work in and towards a sustainable future. China, for example, is taking action in multiple ways: they are a signatory to the Paris Agreement, a global treaty within the United Nations Framework Convention on Climate Change (UNFCCC). More importantly, China launched a national carbon market in 2021, known as the China Emissions Trading Scheme (ETS). The ETS aims to limit carbon emissions from various sectors by establishing a cap-and-trade system, where companies can buy and sell emission allowances.
The USA, the biggest economy in the world, is still somewhat redundant, although some states are taking steps towards a Net Zero Future. California has stringent emission reduction targets and cap-and-trade programs. The federal government is re-engaging in global climate efforts, with renewed commitments under the Paris Agreement, which encourages businesses to align with emission reduction goals.
All these regulations have something in common, they all depend on businesses. Without them, there is no Net Zero Carbon Future. So their role is even more important than ever to mitigate climate change and make the world a better place. Here are 5 steps that businesses need to take to ensure that that world is actually possible.
5 Steps Businesses Need To Make For A Net Zero Future
- Holistic Carbon Assessment
The first and perhaps most crucial step is an honest evaluation of a company's carbon footprint. This assessment delves into every nook and cranny of operations, unearthing the direct and indirect sources of carbon emissions. By understanding where and how emissions occur, businesses can pinpoint areas for improvement and set informed reduction targets.
For example, businesses can use Life Cycle Assessment (LCA) techniques to analyze the environmental impact of their products from raw material extraction to disposal. This data guides the company's efforts in reducing emissions throughout the entire supply chain.
- Emission Reduction Pledges
Once armed with a comprehensive assessment, businesses must commit to substantial emission reduction targets. This involves overhauling operational processes, adopting energy-efficient technologies, and embracing sustainable practices across the board.
There are numerous companies using emission reduction pledges. IKEA, a global furniture retailer, has set a goal to become carbon positive by 2030. The company is not only focusing on reducing its own emissions but also on removing more carbon from the atmosphere than it emits. IKEA is investing in reforestation projects and renewable energy sources to achieve its targets.
Another example can be found in Unilever, a consumer goods company, which has set a target to achieve net zero emissions from its products by 2039. This includes not only the company's operations but also the use of its products by consumers. Unilever is focusing on reducing the carbon footprint of its products and sourcing renewable energy for its manufacturing sites.
- Renewable Energy Transition
The shift to renewable energy sources is a cornerstone of the net zero journey. By replacing fossil fuels with clean energy options like solar, wind, and hydroelectric power, businesses can drastically reduce their carbon emissions.
Google has been a pioneer in renewable energy adoption. The company has matched 100% of its global electricity consumption with renewable energy purchases since 2017. Google has invested in solar and wind projects, signed power purchase agreements (PPAs) for renewable energy, and continues to work towards its goal of operating on carbon-free energy by 2030.
- Carbon Offsetting and Removal
Some emissions are challenging to eliminate completely. Carbon offsetting and removal come into play here, allowing businesses to invest in projects that capture or prevent emissions elsewhere, effectively neutralizing their own impact.
Microsoft has committed to not only becoming carbon negative by 2030 but also removing its historical carbon emissions. The company has launched the Microsoft Carbon Removal Market Development program, which aims to accelerate the development of carbon removal technologies. Microsoft has also invested in projects that remove carbon from the atmosphere, such as reforestation and soil carbon sequestration.
- Collaborative Innovation
Businesses can amplify their impact by fostering innovation and collaborating with partners. Sharing sustainable technologies, practices, and solutions accelerates the collective journey toward a net zero future.
The Renewable Energy Buyers Alliance (REBA) is a coalition of companies, including Google, Facebook, General Motors, and Walmart, committed to purchasing renewable energy at scale. By collaborating, these companies leverage their purchasing power to drive the development of new renewable energy projects and accelerate the transition to clean energy sources.
Another example is the Climate Group's RE100 Initiative. The RE100 is a global initiative that brings together influential companies committed to sourcing 100% renewable electricity. Members include companies like Apple, IKEA, Coca-Cola, and Microsoft, who collaborate to share best practices, strategies, and challenges related to renewable energy procurement.
The path to a net zero future requires a strategic and concerted effort from businesses. By conducting thorough carbon assessments, committing to emission reduction, transitioning to renewable energy, embracing carbon offsetting, and fostering collaborative innovation, companies can lead the charge in mitigating climate change while securing a sustainable and prosperous future. As businesses integrate these steps into their core strategies, they not only contribute to a healthier planet but also position themselves as industry leaders and pioneers in the race toward a net zero future.
Merve Kanat Dogan is a senior executive and entrepreneur with extensive experience in foreign communications and relations. She has worked across various sectors, including pharma, health tourism, and technological devices. Her diverse career spans various industries, including foreign trade, consultancy, banking, health tourism, medical, cosmetics, HVAC, electronics, automation, manufacturing, equestrian business, mining, and food service. She has co-founded several companies and cooperatives, managed different departments, and established business relationships. Currently, she is the Vice President and Business Partner for Turkiye & Central Asia at ztudium group.