To achieve the United Nation's Sustainable Development Goals, it will be necessary for businesses to set net zero targets and work towards achieving them with viable strategies. This is a challenge that requires a growth mindset-meaning we should always be looking for ways to improve and do better.
As more regulations come into play in various regions and stakeholder demand for corporate sustainability rise, building net zero strategies is key for any industry. What is more, investors now agree that companies that lack net zero strategies are being overlooked. Businesses that aren't moving into the green economy are falling behind and won't receive the return on investment that is desired.
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Net zero global emissions refer to the balance between the amount of greenhouse gases emitted into the atmosphere and the amount removed from the atmosphere, resulting in no net increase in greenhouse gas concentrations. This can be achieved through reducing emissions and increasing carbon sequestration through methods such as planting trees or capturing and storing carbon dioxide.
According to Science Based Targets initiative (SBTi), a company is only considered to have reached Net Zero when it has achieved its long-term science-based target.
A science based target is a long-term goal that is in line with what the latest climate science says is necessary to limit global warming to well below 2°C above pre-industrial levels and pursue efforts to limit warming of the planet to 1.5°C.
This means that companies need to reduce their GHG emissions by half before 2030 and reach net zero GHG emissions before 2050.
Setting net zero targets means that a company is aiming to reduce their greenhouse gas emissions to zero, or even become carbon negative by sequestering more carbon than they emit.
It’s important to note that setting a net zero target does not mean that a company can stop reducing its GHG emissions. To reach net zero, companies need to continue to mitigate carbon emissions while also offsetting any residual emissions through carbon offsets and carbon capture projects (including carbon removals, direct air capture, carbon storage projects and others).
First, it is crucial to act on climate change and global warming to avoid the worst impacts. The Intergovernmental Panel on Climate Change has warned that we only have a dozen years to take drastic action to avoid catastrophic temperature rises.
Secondly, there are a lot of economic opportunities that would empower your business to thrive in a climate-first economy. For example, by moving to renewables and energy efficiency, companies can save money and make profits from selling products and services that help cut emissions.
Finally, setting net zero targets and strategies inspires others to do the same. It sends a signal that we are serious about limiting global warming and that businesses are ready to lead the way.
Setting net zero targets encourages a growth mindset because it leads to successful net zero strategies. When a business sets a goal to attain net zero GHG emissions, it recognises an opportunity for improvement that the business is willing to work hard to act on.
It’s also important to have a growth mindset when setting net zero targets because we cannot achieve these goals without innovation. We need to find new and better ways of doing things in order to reduce our global GHG emissions. This means that businesses need to be constantly searching for new technologies and solutions that can help them meet their targets. Long term net zero strategies that start with benchmarking and seeing progress become achieved through smaller targets is the key to progress and growth.
Finally, a growth mindset is necessary because we need to be prepared to adapt as the climate changes. As the effects of climate change and global warming become more pronounced, we may need to change our plans and strategies to achieve our goals. This means that businesses need to be flexible and ready to change course as the situation evolves. No matter the context, it is imperative that business leaders (alongside world leaders) prioritise limiting global warming.
Businesses face many challenges when it comes to reaching net zero by 2050. While some companies are beginning to adopt sustainable practices, many are still hesitant to make changes that could impact their bottom line. To reach net zero targets, businesses will need to make significant changes in how they operate, and many are reluctant to do so.
There are a few key challenges that businesses face when it comes to reaching net zero.
One is the cost of implementing sustainable practices. Many of the measures needed to accomplish net zero emissions – such as installing solar panels or retrofitting buildings – can be expensive. This is why net zero strategies must be firm enough to be accomplished yet flexible enough to adapt to changes and available resources. Businesses also need to be aware of the carbon emissions from their supply chains and make sure that all aspects of their operations are carbon neutral.
Another challenge for businesses is the lack of regulations or incentives encouraging them to go green. Governments and other institutions have been slow to put policies in place that would require or incentivise businesses to reduce their GHG emissions. This can be frustrating for companies who want to do the right thing but don’t have the support they need from the government.
Finally, businesses face a significant challenge in terms of public perception. Many people remain skeptical about climate change and are unwilling to change their habits even if it means supporting a business that is trying to get to net zero targets. This makes it difficult for businesses to get buy-in from their customers and employees when it comes to sustainability initiatives and achieving net zero targets.
Despite these challenges, there are many businesses that are working hard to cut net zero emissions by 2050. By banding together and sharing best practices, these companies can help pave the way for a more sustainable future.
A separate challenge that business leaders and managers are facing has often a lot to do with mindset. Leaders may feel forced to set up net zero strategies for a seemingly imposed goal, even though they might not be motivated to run this race for the following reasons:
At Net0, it’s our responsibility to encourage decision-makers to gather more information from experts (or manuals like our White Papers) to demystify this significant topic and shape a perspective that motivates leaders and their teams to tackle the net zero challenge.
When it comes to achieving net zero targets, business leaders need to change their mindset first. This means thinking long-term and being innovative in their approach. It also requires a focus on sustainability and becoming more resource-efficient.
In order to achieve net zero, businesses need to move away from the traditional model of growth at all costs. Instead, they need to embrace a sustainable growth model that focuses on reducing GHG emissions and waste. They also need to invest in renewable energy sources and energy efficiency measures.
Realistic target setting always needs to be based on a preliminary assessment that helps to make well-informed decisions. This assessment should include a feasibility study to determine if the proposed targets are achievable. Only then can realistic target setting be considered SMART - specific, measurable, attainable, relevant, and timebound.
SMART goals and respective reduction plans require:
Here is an analogy we can all refer to:
Imagine you decide to run a marathon (42km), even though you have never pursued any sports activity regularly, including running. In this case, you may want first to assess whether you fulfil the minimum requirements that make you fit for purpose and if you can set a foundation you can strategically build on to help you score success (and, most of all, make it an enjoyable experience).
First, you will need a minimum of metabolic fitness and joint health, time and motivation. Second, you need knowledge to develop a training plan with achievable short-term targets that helps you to stay motivated. Obviously, without consulting an experienced runner or experts in this field, the probability that you will make typical beginner mistakes, waste your energy, risk injury, and lose your motivation is very high.
The race to net zero is an imperative challenge that humanity has never faced before. But sustainable practices, including carbon reduction methods, have already been implemented for decades due to increasing environmental awareness.
As for an ambitious marathon runner who has no experience in running, it is highly advisable for any leader who has no experience in climate accounting and management to:
The goal to reach net zero global emissions should not be considered a sole obligation imposed by governmental authorities. Instead, businesses shall recognise it as an opportunity to make better choices for our corporate health. Leaders can instrumentalize the vision to reach net zero emissions targets as an incentive to be more mindful of our resources and to implement specific structural changes that ultimately save financial resources (e.g. through supply chain efficiencies).
Let’s get back to our marathon runner: The 42km could be a long-term goal you want to reach in 2030. To achieve this goal, you will nourish, strengthen, restore, re-strategise, learn, and readjust to become the fittest, most healthy version of yourself. You will set short-term targets, such as finishing a 10km or 21km run. If you were able to run those distances pain-free without any signs of long-term damage, it is an excellent indicator that you can set more ambitious goals. However, sustaining and further strengthening your health should be the underlying motivation to establish such an ambitious goal.
Thus, if you consider setting a net zero target as an incentive to:
• improve your corporate well-being as a whole
• save environmental and financial resources
• become the best version of yourself
• contribute to the well-being of the planet and its natural ecosystems
• contribute to the well-being of people and communities
• contribute to a greener, more resilient economy
• lead, manage and live in harmony with nature
…you increase the likelihood to approach climate management with the required whole system thinking, harness its full potential and have a much more successful net zero strategy in the long run.
Recommended articles:
• Article: Are Net Zero Business Models the Future of Responsible Leadership?
• Article: Decarbonization: How to Set Goals and Sustainability Targets
• Article: Redefining Value and Corporate Priorities for Successful Net Zero Climate Management
• Article: Integrating Climate Thinking into Corporate Strategy for Net Zero Business Models
• Article: Setting Net Zero Targets: Who Should be Involved in The Process?
There are many benefits for businesses that set and achieve a net zero target. These benefits range from improved public perception and brand value to increased employee engagement and motivation, to cost savings from improved resource efficiency.
Net zero targets can also help businesses to:
• Comply with, and often exceed government regulations
• Manage risk and opportunity in a carbon-constrained world
• Meet the expectations of investors, customers and other stakeholders
• Create a competitive advantage in the race to develop and commercialise low-carbon products and services
In addition, large businesses and public companies that achieve net zero carbon targets are often seen as leaders in the transition to a low-carbon economy, which can create further opportunities for business growth and development.
There are a number of ways in which businesses can continue to improve their sustainability performance even after reaching a net zero carbon target. These include:
• Improving resource efficiency and waste management processes
• Developing and implementing renewable energy strategies
• Introducing green procurement policies
• Embedding sustainability into business decision making
• Communicating and reporting on sustainability performance
These are just some of the ways in which businesses can continue to improve their sustainability performance. For more ideas, please see our article on ways to improve corporate sustainability.
Net0 not only allows businesses to set pertinent goals, but creates an environment that spurs employees to see the targets through for net zero strategies that work for any company. The Net0 framework for setting decarbonisation goals and sustainability targets is proven to be effective when working with large businesses and public companies.
In order to set ambitious yet achievable targets, businesses need to first have a baseline of their current performance. Net0 can help businesses to understand their base emissions by recording and measuring their carbon dioxide emissions across their operations and through the whole supply chain. This will give businesses a clear understanding of where they are starting from and what needs to be done to improve.
Good communication is key to any successful target-setting process. Net0 can help businesses to establish effective communication channels between employees, managers and other stakeholders like vendors and even investors. This will ensure that everyone is kept up to date with progress and that targets are achieved in a timely manner.
A life cycle assessment (LCA) is a tool that can be used to identify and quantify the environmental impacts of a product, service or system. Net0 can help businesses to conduct an LCA in order to understand the full environmental impact of their operations. This will provide valuable insights into where improvements can be made to reduce GHG emissions and achieve sustainability targets.
Once a baseline has been established and communication channels have been set up, businesses can then start to set targets. Net0 can help businesses to develop a roadmap to net zero by outlining the steps that need to be taken to achieve net zero carbon dioxide emissions. This will give businesses a clear plan of action and allow them to track their progress along the way.
Net0 has created a simulation tool which is powered by AI to provide predictions about the impacts of possible changes within a business on its carbon footprint. The simulator tool shows companies, quantifiably, what would happen if they were to eliminate different sources of carbon in their company. When you evaluate green initiatives before committing, it allows for a realistic understanding of what steps actually need to be taken.
Net0's simulator not only provides accurate simulations but is also paired with financial data to help businesses make more informed decisions.
The targets and benchmarking tools allow companies to set ambitious yet achievable reduction targets and compare their progress over time.
It is important that all employees are engaged in the target-setting process, as they will be the ones who are responsible for achieving the targets. Net0 can help businesses to engage employees by involving them in the goal-setting process and providing training and support on how they can help to achieve the targets.
Achieving net zero is not going to be easy, but with the right mindset, it is possible. Business leaders must think outside the box and come up with new ways to reduce carbon dioxide emissions. They also need to find ways to make their operations more sustainable which will require deep business transformation. Above all, they need to be committed to reaching net zero targets and be open to be transparent about their journeys and progress. With the right mindset, anything is possible.
Net0 is the perfect tool for businesses looking to reduce their GHG emissions and improve their sustainability. The platform takes businesses through the whole journey from helping business leaders to get in the right mindset (and encourage the team to shift the mindset, if required) to accurately measuring and effectively reducing carbon dioxide emissions in the long term.
By providing a variety of resources and tools, Net0 makes it easy for businesses to make sustainable changes and achieve their net zero emissions fast.
Book a demo to learn more about Net0 and how we work with large enterprises striving to set sustainable strategies and transition to net zero carbon.
