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What is Net Zero?
According to the Science Based Target initiative (SBTi), “Net Zero emissions are achieved when anthropogenic emissions of greenhouse gases to the atmosphere are balanced by anthropogenic removals over a specified period.”
To align with the 1.5⁰C climate ambition and limit the impact of climate change, the world needs to reduce net annual greenhouse emissions by at least 40 gigatonnes by mid-century.
Why is it essential?
In response to meet the ambitious, yet essential, global warming target of 1.5°C set out in the Paris Agreement, reducing carbon emissions alone is not sufficient. In December 2019, the UN announced that going beyond that temperature will most certainly lead to catastrophic disaster.
We need to go one step further in order to halt the climate emergency. The time to limit global warming is now. With the help of our approach to Net Zero, businesses, cities, and governments can unlock the opportunities and reduce the risks associated with climate change, meet climate goals and adapt to evolving expectations to achieve Net Zero.
A Path to Net Zero
Cities and corporations around the globe are setting targets to radically reduce their greenhouse gas emissions in order to control climate change. These targets and commitments often align with a desire to achieve Net Zero emissions by a certain date in the future. Simply put, this means balancing associated emissions produced by an organisation’s operations and supply chain, and emissions taken out of the atmosphere.
Achieving Net Zero requires coordinated action touching on many aspects of the organisation. What may seem daunting can be broken down into strategic and manageable pathways for transformation that starts with analytics, moves on to developing solutions, and ends in implementing change.
The Strategic Framework
Our Net Zero framework focuses on six key areas for organisations to consider on the transition to Net Zero. Click below to learn more:
- Assess your risk & impact: Assess your climate risks, opportunities and climate impact
- Set a target: Set a Net Zero target, aligned with science
- Plan for the transition: Plan for the transition via a strategic roadmap, addressing risk and reduction
- Implement reduction measures: Implement reduction and adaptation measures throughout your value chain
- Invest in climate finance: Invest in climate finance to address residual emissions
- Communicate performance: Communicate performance and enhance brand reputation
Assess your climate risks, opportunities and climate impact
Understand your current and future footprint
At the heart of the decarbonisation effort is the need to efficiently measure, track and understand the GHG emissions your organisation emits through a carbon inventory. In many cases, this is a requirement under national regulation and international frameworks such as TCFD.
By quantifying your emissions and identifying where your emissions come from, you can begin to determine opportunities for reduction. Pulling together the data and processing it into robust and reliable metrics can be difficult and time consuming. Embedding a digital technology solution to calculate and visualise emissions can drastically improve how you manage your data and track ongoing progress.
Assess your climate risk and opportunities
All companies face risks and opportunities from climate change, both physical risks and those linked to the changes that societies and economies will undergo as we adapt to the realities of a warmer, Net Zero world. Leaders must understand the financial impact of these risks and implement strategies to mitigate and respond to them.
We assess the risks and opportunities that climate change poses to each area of an organisation and the impact on financial results under different climate scenarios to provide clear, quantitative insight into areas of concern.
FAQ – Climate Risks & Impact
Who is involved in setting science-based targets?
SBTs are both a challenge and opportunity as they bring together disparate stakeholders, including:
- Energy and Carbon stakeholders from facilities and finance
- Sustainability teams
- Product managers
- In the supply chain: buyers, merchants and procurement organisations
When setting targets, a company is effectively setting an internal price on carbon. For those that implement the targets across the organization, it can change how people act and how decisions are made. The value of taking action on these topics might have a longer payout but reduce more energy and carbon than some of the shorter-term projects that fit into the standard quarterly corporate decision-making timescale. Carbon targets require a balance of near-term actions and long-term planning. Companies must shift their outlook to accommodate targets whose length and duration can be 5,10, or even 15 years in some cases. This shift forces a lot of new engagement and decision making.
These goals require a high level of ambition and engagement in decision making, oftentimes more than a sustainability team is used to. This includes getting C-suite approval for long-term duration and high-ambition targets that we don’t always know we can achieve. In addition to raising internal awareness around sustainability, these conversations can be a great catalyst for taking action on other topics too.
The accounting processes used in supply chain engagement and Scope 3 reductions have been around for decades. And yet, guiding a client through the process with their own data outside of the scope of their operational emissions (Scope 1 and 2) can be transformative. The long tail of impact in supply chains often leaves sustainability teams astonished in the face of a footprint that is up to 10 times their operational footprint. It’s an exciting challenge to work with clients to determine the most advantageous approach to collect data over time, engage for action and account for it.
Operational emissions will always be the lower hanging fruit and thus the first step to drive progress on SBTs and to move towards net-zero. Fortunately, the path is straightforward and well-trodden. It is mainly a transactional challenge to procure renewables across portfolios (China notwithstanding).
Getting to actual zero is going to be hard from a baseline point of view and in managing forward, future growth while remaining flat. This is where we need to see significant progress among businesses as they take steps to account for their footprint, engage with supply chains, and couple business value and net-zero action.
Anthesis recommends companies set science-based reduction targets (SBTs), preferably aligned with a 1.5°C pathway and preferably capturing scope 1, 2 and 3 emissions to form a foundational part of a corporate climate strategy. Companies should prioritize reductions across their value chain and think about their SBTs as incremental steps along their journey towards net zero, because, reductions alone will not get us there.
Set a Net Zero target, aligned with science
Once you have undertaken a GHG inventory, you can use this data to identify hotspots, drivers of emissions and reduction opportunities. Opportunities should be developed into clear targets, informed by the latest science, that can be communicated to stakeholders.
We support organisations to develop emissions-reduction targets consistent with the world’s carbon mitigation requirements to keep the globe below 2°C warming and align with Paris Agreement emission reduction forecasts.
What’s the difference between Science-Based and Net Zero Targets?
Science-based targets (SBTs) are near-term goals set by businesses that align with the scale of reductions required to keep global temperature increases well below 2°C compared to pre-industrial temperatures. Net Zero is a longer-term target to completely negate emissions produced, which also allows for absorbing remaining emissions through climate removals.
Plan for the transition via a strategic roadmap, addressing risk and reduction
A climate transition plan is a comprehensive document that outlines a company’s response to the challenge of reaching global Net Zero. It should show the specific steps which the company will take to adapt and, if necessary, transform its business to be able to thrive in the low-carbon economy. A transition plan is an output of a process of transition planning inside the company and must contain all relevant details to prove its effectiveness in execution.
Implement reduction and adaptation measures throughout your value chain
All organisations are part of a connected network that shares the risks and opportunities associated with moving towards a Net Zero world. Implementing the strategies that deliver sustainable performance will reach many parts of your network, both internally across business functions, as well as externally with supply chain and customers.
Invest in climate finance to address residual emissions
As your reduction plans are underway, investing in climate finance, known as offsetting, can help you tackle unavoidable residual emissions by removing carbon from the atmosphere in a way that benefit societies and people.
Through a range of technology-based, and nature-based programmes, Anthesis supports companies to invest in verified, guaranteed carbon credits that fund essential climate action.
Communicate performance and enhance brand reputation
Brands that commit to sustainability and purpose can inspire and motivate their teams, earn customer preference, drive investor confidence, and secure stakeholder credibility.
We support companies throughout their journey to communicate with stakeholders on Net Zero ambitions and progress clearly, accurately, and authentically.
Frequently Asked Net Zero Questions
Governments and businesses around the world have all differently set target dates for their own Net Zero impact. However, Net Zero by 2050 is often used as a reference point as it aligns with the Paris Climate Agreement’s statement that we must meet this target by mid-century if we are to avoid the most catastrophic impacts of climate change.
Climate science warnings state that if global temperatures continue to rise about 1.5C, lives and livelihoods across the globe will be impacted. The repercussions of a hotter world are hard to predict accurately, but expectations include mass climate migrations, food shortages, increased unpredictable weather events, as well as sea-level rises that could submerge whole countries.
Quite simply, no. Net Zero considers a range of greenhouse gas emissions, not just carbon. This includes Methane, Nitrous Oxide and Fluorinated Gasses, which also have an impact on the greenhouse effect.
A Net Zero target helps you know where to get to, and a carbon price helps you know how to get there. In particular, a carbon price can help you influence decision makers. You can apply internal carbon pricing to your investment process, for example, understanding your costs, and accounting for them, can also help you to achieve your overall Net Zero emission targets.
We are the world’s leading science-based advisory, purpose-driven agency and digitally-empowered activator. And always welcome inquiries and partnerships to drive positive change together.