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Achieving net zero emissions is a really important measure of how well a company is doing, and it should be a big focus when company leaders meet to make decisions. A bold statement, but let us explain.
If a business is making good progress toward its net zero goals, this is a good indicator that the business is doing well. That business will be saving money over the long term, pleasing its customers and investors, and attracting talented employees. Plus, net zero is an effective risk mitigation strategy and ensures compliance.
In the next part, we explain why it's important for companies to create a strategy to reach net zero.
Companies that are serious about reaching net zero can get ahead of the competition by satisfying what their consumers want, attracting top talent, meeting investor needs, and saving money.
Consumers: According to Globe Scan’s 2022 Healthy and Sustainable Living research, 65% of consumers are really worried about our warming planet, and half of them want to make changes in how they live and what they buy to help the environment. If your company sets clear goals to reach net zero emissions and comes up with a plan to achieve them, it shows your brand is committed to the same values as this consumer majority.
On this note, achieving net zero helps businesses sell to large company buyers by aligning with the growing emphasis on sustainability and environmental responsibility in corporate procurement practices. A Carbon Dated report found that, in 2021, 67% of multinational companies (MNCs) stated: “A reduction of supply chain emissions is the first step in their net-zero strategy”. By demonstrating a net-zero commitment, businesses not only meet these buyers' sustainability requirements but also enhance their reputation, making them more attractive partners.
Employees: A 2023 Deloitte survey found that 40% of Gen Z and Millennials have already changed jobs or want to change jobs in the future because they care a lot about the environment. So, if your business comes up with smart plans to achieve challenging net zero goals, you'll be able to attract and keep talented employees.
Investors: Investors are beginning to pay attention to the serious climate problem we have. There’s been an 84% increase in investments in companies that care about social and environmental issues, as mentioned in PwC’s Asset and Wealth Management Revolution 2022 report. For example, a big investor called BlackRock asks companies to disclose how much emissions they create.
Cost reductions: Net zero helps businesses save money over the long term by:
Once more, net zero businesses can worry less about the prices of fossil fuels going up and down.
Governments are making tougher rules about how companies should take care of the environment. If companies take action to reduce their emissions, they can receive financial rewards, support, and funding. These companies will also remain compliant and steer clear of expensive fines for emitting too many greenhouse gasses.
Below we’ve listed key laws, regulations, standards, tax credits, and funding to be aware of. These have been set to support America’s net zero targets and will impact your business.
Climate change poses big challenges for businesses, with supply chain disruptions, extreme weather, and increased operating costs.
For instance, to deal with these issues, a 2022 Gartner study reported that 27% of supply chain experts are now looking into the risks linked to climate change.
"The effects of climate change are hard to predict, but it is possible to model the risks and opportunities that might occur. Chief supply chain officers (CSCOs) regularly assess various risks and opportunities as part of normal business – this must be done for climate change as well.” - Heather Wheatley, senior director analyst with the Gartner Supply Chain practice, Gartner Survey Reveals 27% of Chief Supply Chain Officers Have Conducted a Climate Change Risk Assessment
A net zero strategy pushes a business to address these risks today. This means businesses are better prepared for future disruptions caused by climate change.
In addition, net zero helps businesses:
Before you set your net zero goals, it's important you understand the specific elements you need to consider.
Setting a net zero target means:
Usually, net zero covers all the greenhouse gasses (GHGs) listed in the Kyoto Protocol. These gasses include:
Note, that after measuring each of the above gasses, your business has to standardize these measures by converting them to the equivalent amount of carbon dioxide (CO2e) emissions. You can use the Environmental Protection Agency’s Greenhouse Gas Equivalencies Calculator to do this or use an automated solution for a faster, easier measurement.
The Greenhouse Gas Protocol has established a framework to help businesses identify the different activities that release GHGs into the atmosphere. Call this framework the “Scoped” approach. We’ve defined this framework below:
For your business to achieve net zero, you must include emissions from all business activities that come under each of these Scopes. Create a table with three columns, and list business operations as per the Scope they relate to. We’ve given an example below for a clothes retail business.
Use Aclymate to record and track your business emissions across these three Scopes. Our proprietary algorithm will quickly sort through your organization’s financial transactions to tell you what was an emission. Once more, emissions are tagged, categorized, and assigned, e.g. to offices, employees, or vehicles. Aclymate gives you the information you need to conduct an accurate assessment to identify emissions under each Scope.
Begin your path towards net zero today by making the pledge, and become part of the solution.
While there's a bit of discussion around when we should reach net zero goals, most people who work on climate issues agree to set net-zero targets for 2050. It’s also recommended you have smaller goals along the way to keep the momentum high. The recommendation for these smaller goals is to achieve a 50% emission reduction by 2030.
“The net zero Standard also requires companies to set long-term [net zero targets] to cut all possible emissions before 2050. Most companies must reduce emissions by more than 90%” - Science Based Targets, The Corporate Net Zero Standard
Offsetting gives businesses the means of taking out the emissions they release into the atmosphere.
For example, imagine your delivery truck produces four pounds of CO2e during one trip. To make up for these emissions, you invest in an offset project that takes away four pounds of CO2e from the air. This means the total emissions from your delivery end up being zero.
While there’s some debate over the effectiveness of offsetting, most climate experts worldwide agree that offsetting can be helpful when we follow specific rules. Call these the rules of offsetting. These rules are:
Visit Aclymate's marketplace to explore our transparent offsetting projects. These projects are approved by trusted organizations like the Gold Standard, the American Carbon Registry, and the Climate Action Reserve. Hence, our projects follow the rules of offsetting. Projects that aren't certified yet are focused on using new technology to create offsets, and they're in the process of getting certified.