As a business owner, the word “net” is part of your vocabulary. You make net profit, and you have net profit margins. Net is, as you know it so well, what is left after you take away the expenses and tax. Net in the “Net Zero” is therefore what is left after you reduce your carbon emissions to zero.
Think of “Net Zero” as a shorthand for lowering carbon emissions from your entire operations to almost zero. However, the emissions that cannot be reduced any further, can be offset.
According to Climate Change News, this concept has emerged out of discussions in 2013 as to how to convince the world to fully decarbonise, in other words, to achieve zero emissions so that global temperature does not rise above 1.5C and therefore limit the impacts of the changing climate on this planet.
Knowing this may be difficult to embrace, as no economy or an individual can be emitting zero carbon, Net Zero was introduced instead. Since then, the concept has entered into everyday vocabulary; it has been translated into law in the UK and countless countries and companies have even pledged to be Net Zero by 2050.
Unlike carbon neutrality, the concept of Net Zero focuses on reduction of emissions as far as it is possible. It is not about offsetting what is emitted into the atmosphere, but rather, it is about offsetting what cannot be reduced after emissions are almost at zero. So when others speak of Net Zero, they hopefully mean the same thing. However, despite its wide use, there was no common definition and so multiple interpretations followed. So, if you feel you got it wrong, do not worry as Net Zero has only recently been defined. In 2022, Science-based Targets Initiative published a Net Zero standard for businesses and in it said that it covers “a company’s entire value chain emissions, including those produced by their own processes (scope 1), purchased electricity and heat (scope 2), and generated by suppliers and end-users (scope 3). Most companies will require deep decarbonization of 90-95% to reach net-zero under the Standard”1.
The key message here is that Net Zero means deep decarbonisation in phases in order to archive its target by 2050 while keeping your business profitable in the long term.
Here is what you can do:
- Calculate your carbon footprint – because knowing how much you emit and what parts of the operations have high emissions, you can be practical about decarbonisation.
- Integrate decarbonisation strategy into your business strategy – because to keep your business going for years to come, you must redesign your operations so they are not impacted by the changing climate, legislation, distruption to supply chains and consumer backlash,
- Set targets and a decarbonisation plan – because this cannot be done in one day and as a business owner you know that having a plan and targets keeps you on the right track.
- Be honest about your efforts before you make the pledge – because staff and consumers stand behind businesses that back up words with actions and as you know it all too well, without them you cannot trade for years to come.
Net Zero is an opportunity for businesses to thrive for years to come and to be rewarded by consumer and staff loyalty. A sustainable mindset, communication, education and actions are paramount to effective decarbonisation and therefore your future.
Useful resources for businesses for Net Zero: