July 25, 2021
Combatting carbon emissions will need to be tackled from many angles. There are different ways CO2 is emitted from different industries and their various sectors so the strategies will come in many different forms and finding the best strategy for your company can be done with experts.
While every company and industry is different to scale, looking at regenerative businesses with circular supply chains are a great place to start. Achieving net zero will look differently for everyone but it doesn't have to be a tedious and expensive process. It also can be done more easily if it isn't done overnight. A simple and steady progression through adding renewables, taking away waste, and substituting certain materials for others can be done step-by-step. Other factors may be more complicated but the final goal can still be achieved.
A PwC analysis says that by February 2021 only 8% of the world's Fortune 500 companies had pledged to become net zero. They also state that between 2009 and 2019, carbon emissions went up by 1.5% per year when we need them to be cut in half by 2030 if we are going to achieve net zero by 2050. Businesses will eventually have to keep up with governments as 50% of the countries adding up to over 50% of global GDP have made the net zero by 2050 pledge. Eventually, there will be policies that will become laws and businesses will have to get going in that direction before it is too late. It is easier if companies do their part to achieve what they can in concurrence with or even before policies are in place as it is inevitable.
Environmental, social and corporate governance (ESG) measures have been on the rise for the past decade regarding climate change and will only gain momentum in the next. Since there is so much to be done and ESG is becoming more and more integrated into green business practices as of late, companies are at a loss of where to begin. What is more, with transparency being the supply chain trend of the 20's, clients are caring more about carbon footprints and fair working practices so it is in the best interest of companies from every aspect to get on board with environmentally friendly practices even before the laws begin to take effect.
Since all companies and industries run differently, we are going to see innovative progressions through the 20s in many different forms. It will be interesting to see what businesses come up with in regards to transparency, environmental procedures, packaging, transportation, working practices, sourcing, finding suppliers, building partnerships, and catering to customers, patients, homeowners, and the list goes on.
What are some examples of action plans that are in the works of some regenerative companies? And how can you follow their examples in reaching your net zero targets? Let's take a look at some of the ways international companies have begun to implement strategies.
Some companies are so green that they will only do business with other companies taking transparency and sustainability to the next level: regeneration. In fact, sustainability is no longer good enough; it is passive. Regenerative companies are now in the spotlight for not only recycling but improving societies. Many will not use vendors or outsource to suppliers without knowing their full green plans. Implementations of regenerative procedures at least must be in the works to draw the attention of certain companies, or partnerships with them will be mercilessly overlooked. If this strategy takes hold and offers a competitive advantage, it will become contagious and others will be forced to comply to stay in the game.
Nestle will be moving onto regenerative agriculture and only using renewable electricity. On December 3, 2020, Nestle came out with a press release in Switzerland saying they will focus on regeneration in their climb to net zero. Their impressive 49-page roadmap has details about their plans and what will work for them to halve their carbon emissions by 2030 and achieve net zero by 2050. They will only use renewable energy for production and aim towards cleaner logistics.
One of Nestle's impressive goals is to plant 20 million trees every year in the next decade in regions they source from for "improved diversity and soil health." Reforestation and ending deforestation by 2022 in the soy and palm oil tree industries is another goal to improve farming communities in those regions. Since nearly two-thirds of their carbon emissions are due to agriculture, this transition will combat most of their emissions. Nestle's targets have been approved by the Science Based Targets initiative (SBTi) and comply with the goals of the Paris Agreement.
Most importantly, Nestle will only do business with other green partners. From agriculture and packaging to logistics, they are green all the way down the supply chain. So far, their model still lies in the linear supply chain, not circular. It isn't clear what will happen at the end of life for their products and packaging but it would be beneficial for a company of this size to be able to scale final waste and what to do with it for a circular economy.
Going beyond sustainability to not only maintain the earth's resources but be regenerative is thankfully spreading. More and more brands are out to restore resources and environments and make the world better through their products, work practices, and packaging. "SC Johnson has already made 94% of its plastic packaging recyclable, reusable, or compostable." according to Forbes. GM plans on 20 new electric car models being made by 2023 to begin eliminating carbon emissions. And Levi Strauss will make their facilities 90% CO2-free by 2025. It may look expensive in the short-term to change to renewable energy and produce new packaging that is more sustainable, but in the long-term, the toll it will take on natural resources will be much more environmentally friendly and cost-effective for businesses and end consumers. Forbes also reports, "First, climate change is worsening, and resources are getting scarcer. This year, Earth Overshoot Day—the point in the year when humanity’s natural resources consumption exceeds the planet’s ability to regenerate—was on August 22, earlier than ever." Americans especially are demanding regeneration as opposed to passive sustainability and expect it to cost the same or less. It is a puzzle that we are all still trying to figure out. There is also the idea of triple regeneration which industry leaders are looking to embrace which entails restoration and renewal of people, places, and the planet.
One of the greatest factors that is trending in supply chain management these years besides transparency is the need for a circular economy, ending up with little to zero waste at the end of the supply chain cycle when logistics has brought the product to the end consumer. Eyes are watching the entire supply chain from start to finish and when you think it's finished, it must circle back to no waste. This continuous cycle to lead to regrowth has taken a linear supply chain circular, hence the name. This approach will be key in net zero carbon emissions as well. Transparency alone is not enough. The supply chain must be transparent and proactive in the 20s in all aspects of the business from suppliers to end consumers. It must circle back and lead to regeneration.
Patagonia went through many trials and errors with supply, geography, and upcycling concepts buzzing through their workshops and eventually leading them to a circular supply chain. They were pioneers of taking the concepts of recycled wool and other products that were actually cheaper and still had life to give, and building a company off of not only sustainable, but regenerative clothing and packaging that would last for years based on earth-friendly, quality materials and crafting, in the textile industry which produces 10% of all CO2 emissions. The aforementioned Patagonia article states that if the textile industry doesn't act, they will use three times as many resources by 2050. Patagonia had a vision for an eco-friendly brand before it was a trend, which has led the way towards the circular economy. They are better equipped for handling the shift than most brands because it was the point of their business from the very beginning. How they are doing their part is using recycled fabrics, waste-to-fabric materials, and partnering with sources that use innovative textile workings for optimal earth-saving results. They also gear towards making functional and practical products that can be reused for ages so they don't end up in the bin creating a need for producing more. “We need to work on being more aware of what’s going on in our full product life cycle. Every product has an end of life, and from there, it’s our job to make new products out of it. That’s going to be the model going forward." - Ciara Cates, Patagonia’s lead material developer.
There are industries, such as oil and gas that are necessary for transportation and more at this point, but could have been significantly reduced in usage by humans and hopefully can be eradicated and replaced with a more environmentally friendly material in the future. Some industries like coal mining will be eliminated to make way for renewable energy. These transitions into new markets make workers and industry leaders fearful but it paves the way for a new, cleaner, and healthier way to live, segueing into new jobs and opportunities for everyone to benefit from the resources and results in the long run.
In February 2021, Royal Dutch Shell announced they were setting out for net zero emissions and claimed their carbon emissions peaked in 2018 and oil production peaked in 2019. Some of their strategies include selling "clean power" electricity to 15 million business and retail customers around the world by 2030. They plan to invest $100 million a year on natural projects. Royal Dutch Shell will also transition to LNG assets. Regarding chemicals, they will produce them with recycled waste for a circular economy and cut their 13 refineries down to 6 to reduce the production of transitional fuels by 55% by 2030. Despite their many future plans in the works and transitions to alternative power and chemical solutions, implementing them will not be easy in the next few years and will be costly until they receive a return on investment. Royal Dutch Shell is obviously not the common scenario for every company and smaller businesses don't have the overhead or investments to make and carry out such detailed plans, but they also don't pollute in the same way so every business has got to make the plans that are best scaled to their size and the weight of their carbon footprint on the earth.
This is important for two reasons: carbon emissions are already at toxic levels, destroying the environment, and controlling the damage done is only the first step in not damaging the planet even further. Secondly, it is the law in over 50% of countries producing over 50% GDP to achieve net zero by 2050, so businesses will have to comply and get started as soon as possible because it is what is most beneficial to them, their employees, and the environment.
Whatever action plans you choose to take for your business, will depend on many factors crucial for you. Net0 is a carbon emissions measurement software that can accurately measure your carbon footprint in real-time, making it easier for companies to see their impact and how they can take responsibility and make action plans to offset emissions for carbon neutrality. Taking actionable steps like this will increase your ability to achieve what matters and decrease the amount of stress in the process.
Cover photo: Climate Zone