In January, the World Meteorological Organisation (WMO) confirmed 2024 as the warmest year on record. This stark reality emphasises why businesses must act on climate change now, and in the last decade, we have seen corporate Net Zero commitments rise significantly. There is now greater urgency to transition from pledges to tangible actions. Still, many companies find it difficult to translate broad pledges into actual, measurable transformation backed by scientific evidence.
The Importance of Corporate Net Zero Commitments
Net Zero is when greenhouse gas (GHG) emissions are brought as near to zero as possible and any leftover emissions are balanced by actions that take carbon dioxide out of the atmosphere. Reducing emissions across scopes 1, 2 and 3 by establishing science-based targets and following decarbonisation paths can help one to achieve net zero.
The Science Based Targets initiative (SBTi) states that corporate net zero requires two key conditions:
- Achieving value-chain emission reductions consistent with 1.5°C pathways
- Neutralising any residual emissions by permanently removing an equivalent amount of atmospheric carbon dioxide
Read More: Set Science-Based Targets for Net Zero Goals | Tunley Environmental
The UK government estimates that a third of the biggest companies in the country have made varied commitments to reaching Net Zero and eliminate their contributions to global carbon emissions by 2050. However, public pledges must also be followed by comprehensive strategies and practical actions.
Committing to Net Zero also offers additional corporate benefits for organisations including:
- Risk mitigation: Reducing exposure to fluctuations in carbon pricing and regulatory changes.
- Cost savings: Improving energy efficiency and reducing waste.
- Enhanced brand reputation: Demonstrating environmental responsibility to consumers and stakeholders.
- Investor confidence: Aligning with sustainability-focused investment criteria.
However, the challenge remains: how do organisations turn their net zero ambitions into measurable outcomes?
Setting Realistic and Achievable Net Zero Targets
The first step towards achieving Net Zero as a corporate entity is setting realistic and achievable goals on carbon reduction. Often, businesses set ambitious targets without fully understanding the complexities involved in reducing emissions. To ensure success, the following steps are an essential guide:
Step 1: Understand Your Baseline Emissions
To understand your emissions, conduct a thorough carbon footprint assessment to establish your starting point. This involves collecting data on all sources of emissions, including energy consumption, transportation and supply chain activities.
- Once all the emissions hotspots have been identified, they should be quantified by Scope 1, Scope 2 and Scope 3 emissions. Scope 3 emissions, which include indirect emissions from the supply chain, often represent the largest share and can be challenging to quantify.
- Utilise established frameworks such as the Greenhouse Gas Protocol to ensure accuracy.
Step 2: Align Your Plan with Science-Based Guidelines
SBTi provides the world's only framework that lines up corporate net-zero targets with climate science.
- Set up your targets and align it with SBTi to ensure they are compatible with the Paris Agreement. This means aiming to limit global warming to well below 2°C, with efforts to limit it to 1.5°C. SBTi already provides a framework for both near-term and long-term targets.
- When coming up with decarbonisation pathways, think of sector-specific routes to direct cutting plans. The manufacturing sector might give efficiency improvements first priority, while the energy sector might concentrate on renewable integration.
Step 3: Create an Actionable Net Zero Strategy
The final step is to create a comprehensive strategy to Net Zero based on the data collated from the baseline emissions.
- Break down long-term goals into short- and medium-term targets. Clear milestones help track progress and maintain momentum.
- Integrate net zero targets into corporate strategy to ensure alignment across all functions, from operations to procurement.
- Establish clear milestones and timelines, including quarterly and annual targets to measure success.
Success requires a balance between immediate results and transformational change. Organisations could also consider prioritising quick wins over long-term transformations. Quick wins like renewable energy adoption or energy-efficient lighting upgrades build momentum and show what's possible. While some sectors still need state-of-the-art solutions to reach 1.5°C-aligned targets, this shouldn't stop immediate action. The transition needs both short-term efficiency improvements and fundamental business model changes.
For a practical checklist to guide this process, see the Tunley Environmental Net Zero Strategy Checklist: Net Zero Strategy Checklist
Practical Steps to Implementing Your Net Zero Strategy
Companies need strong mechanisms to turn their strategic plans into action for corporate net zero commitments. Many organisations have a goal in sight but may find it challenging to move from planning to actual implementation.
Leverage Data-Driven Insights: Implementing advanced data analytics to process the data derived from the baseline emissions can help ease the complexities involved in the data. This data-driven approach can also enhance real-time monitoring and significantly improve responsiveness.
Build Internal Capabilities: Successful implementation requires clear governance structures with accountability driven throughout the organisation. Senior leaders should assign oversight of the net zero transition to specific management members and create appropriate incentive systems aligned with carbon reduction goals.
Regularly Engage Stakeholders: Organisations should ensure consistent and transparent engagement on targets and progress to stakeholders. This includes employees, customers, suppliers, investors and regulatory bodies.
Adapt to Emerging Technologies: Businesses should explore emerging technologies like carbon capture and storage (CCS) to address residual emissions. This is especially relevant for industries with hard-to-abate emissions.
Measuring Net Zero Progress
Tracking the progress of your Net Zero action plan is also an important part of ensuring that the targets are achieved based on the set timelines. Key metrics to track include:
Carbon Emission Reductions (Tonnes CO₂e): Measures the decrease in carbon emissions over a specific period.
Energy Efficiency Improvements (kWh Saved): Tracks the reduction in energy usage through efficiency measures.
Renewable Energy Adoption (%): Represents the proportion of energy derived from renewable sources compared to total energy consumption.
Supply Chain Emissions (Scope 3): Monitors emissions from indirect sources, such as suppliers and logistics.
Financial Savings from Emission Reduction Initiatives: Quantifies cost savings resulting from reduced energy consumption and lower carbon footprints.
Organisations should also consider implementing carbon tracking software to consolidate data from various operations and facilities. Another initiative is to develop a Net Zero Progress Report which all stakeholders have access to. This report outlines emission reductions progress, future strategies and areas requiring improvement.
The Bottom Line
Turning corporate net zero commitments into reality requires a mixture of structured planning, stakeholder engagement and the willingness to adapt strategies as needed. Businesses should take a proactive and data-driven approach to achieve their net zero targets and contribute to a more sustainable operation and future.