Learn how to set a net zero strategy for your business. This article shows the basics of achieving net-zero and provides a generalised framework to help you set specific goals to get where you want to be.
As the world becomes more aware of the urgency of climate change, many businesses are looking to adopt net-zero strategies. A net-zero strategy entails offsetting all greenhouse gas (GHG) emissions produced by a company through activities that reduce emissions or sequestration projects that remove GHGs from the atmosphere. But that's just a high-level description of what it's about. Let's dive a little deeper.
First, build a GHG Inventory
The first step to developing a successful net-zero strategy is building a complete and accurate GHG inventory. This requires collecting data on all sources of emissions within the company, including Scope 1 emissions from owned or controlled sources, Scope 2 emissions from purchased electricity, and Scope 3 emissions from other indirect sources typically in a company's supply chain.
In order to build an accurate inventory, it is important to establish clear protocols for data collection and management. Once the inventory is complete, companies can set science-based targets (SBTs) for reducing their emissions in line with the goals of the Paris Climate Agreement.
A GHG inventory can help a company to identify areas where they are emitting the most greenhouse gases, and therefore where they can make the biggest reductions. There are a number of different software platforms and tools available to help companies manage their GHG inventories, such as the Climate Registry's Inventory Management System (CIMS) or The Carbon Disclosure Project's (CDP) Climate Change Reporting Framework. Additionally, there are platforms that help you record and manage your inventories including Alectro, Avarni, trace, and Watershed - each platform has a different use case depending on what type of business you are.
In order to ensure that your company's GHG inventory is accurate and complete, it is important to:
- Define the sources of emissions that will be included in the inventory - typically, this will include all sources of Scope 1 and 2 emissions, as well as any significant sources of Scope 3 emissions. For example, if your company has a large fleet of vehicles, you will need to include data on fuel consumption and emission rates in your inventory.
- Collect data on emissions from all relevant sources - this data can be gathered through direct measurement, estimation based on activity data (e.g. fuel consumption), or calculation using emission factors.
- Calculate emissions for each defined source - this calculation should take into account the type and quantity of emissions, as well as the time period over which they were emitted.
- Record and report emissions data in a consistent manner - this will ensure that your company's GHG inventory is comparable year-over-year, and will allow you to track progress towards reduction targets.
When developing your company's first GHG inventory, it is important to use consistent methods and data sources across all years in order to ensure comparability. Once your inventory is developed, you can begin setting reduction targets and taking action to reduce your emissions. Reducing emissions can be good for both the environment and your bottom line - by improving energy efficiency, switching to renewable energy sources, and implementing other best practices, you can save money while shrinking your company's carbon footprint.
Next, set your Science-Based Targets
Once your inventory is developed, you can begin setting science-based reduction targets. Science-based targets are reduction goals that are in line with what the latest climate science says is necessary to prevent the worst impacts of climate change. They help businesses align their efforts with the Paris Agreement's goal of keeping global temperature rise to well below 2 degrees Celsius (or in our opinion a 1.5 degrees Celsius). Setting a science-based target is a key step for any company that is serious about reducing its impact on the climate.
There are a few different ways to set a science-based target. The most common method is to use an emissions reduction calculator, which takes into account your company's specific emissions and recommends a reduction goal that is in line with the latest climate science.
Another option is to set an absolute reduction target. This means setting a goal to reduce your company's emissions by a certain amount, regardless of growth or other factors. Absolute targets are often more ambitious than those based on emissions calculators, but they can be more difficult to achieve.
Finally, you can also set a sector-specific target. This means setting a goal to reduce your company's emissions by a certain amount compared to other companies in your sector. This can be a useful way to benchmark your company's performance and ensure that you are doing your part to reduce emissions in your industry.
Once you have selected a target, it is important to put together a plan to achieve it. This will involve setting interim goals and timelines, as well as identifying the specific actions that need to be taken to reach the target. The plan should be designed to ensure that the target is achievable and that it meets the needs of your business.
Achieving an emissions reduction target can be challenging, but it is important to remember that every little bit helps. Even small reductions in emissions can make a big difference when it comes to protecting the environment.
There are a number of ways to reduce emissions in your industry. Some of these include:
- Improving energy efficiency: This can be done by installing more efficient equipment, using energy-saving practices, and investing in renewable energy sources.
- Reducing waste: This can be achieved by recycling and reuse programs, as well as by reducing the amount of waste produced in the first place.
- Changing production processes: This may involve using alternative materials or methods that result in less pollution.
- Making transportation more efficient: This can involve using fuel-efficient vehicles, carpooling, and Telecommuting.
- Educating employees and customers: It is important to educate employees and customers about the benefits of green practices so that they can be more likely to adopt them.
Lastly, let's carbon offset
Carbon offsets are a way for businesses to mitigate their GHG emissions by investing in projects that reduce emissions elsewhere. There are many different types of carbon offsets available, but they all essentially work by reducing emissions in one area to offset emissions from another.
One popular type of carbon offset is the purchase of renewable energy credits (RECs). RECs are generated when renewable energy is produced and can be sold to businesses or individuals who want to offset their own emissions. By investing in RECs, businesses can help finance the expansion of renewable energy production, which reduces GHG emissions overall.
Another common type of carbon offset is the voluntary retirement of greenhouse gas emission allowances. Emission allowances are permits that allow businesses to emit a certain amount of GHGs. When a business voluntarily retires an emission allowance, it is permanently removed from circulation and can no longer be used to offset emissions. This action reduces the total amount of GHGs that can be emitted into the atmosphere.
Carbon offsets can also be generated through activities that destroy greenhouse gases or prevent them from being emitted in the first place. These include projects that capture and store carbon dioxide (CO2) from power plants or other industrial facilities, as well as projects that prevent deforestation or promote reforestation.
Carbon offsets are typically measured in metric tons of CO2 equivalent (MtCO2e). One MtCO2e is equal to 1 metric ton of CO2, or about 2,205 pounds. Offsets are generally sold in lots of 1,000 metric tons.
There are a number of different types of carbon offsets, each with its own advantages and disadvantages. Voluntary offsets are those that are purchased by businesses or individuals to offset their own emissions. These projects are not required by law, but companies may choose to purchase them to demonstrate their commitment to reducing their environmental impact.
Government-mandated offsets are required by law as part of a cap-and-trade program or another regulatory regime. These programs place a limit (or "cap") on the total amount of GHGs that can be emitted by a certain group of sources, such as power plants or factories. emitters that exceed their allotted emissions must purchase offsets to cover the difference. This provides an incentive for emitters to reduce their own emissions, since they can then sell their offsets on the open market.
There are a variety of offset projects that can be used to meet compliance obligations, including:
- Forestry projects that involve planting trees or preventing deforestation;
- Methane capture at landfill sites;
- Capturing and destroying industrial emissions of methane, HFCs, or other GHGs;
- Efficient cookstove initiatives;
- Renewable energy projects, such as solar, wind, or hydropower.
Please note that not all offset projects are created equal. Some offsets may provide more GHG reductions than others, depending on the specific project type and location. It is important to carefully select offset projects that will result in genuine emission reductions.
Not all voluntary carbon offsets are verified by a third party. However, there are many reputable carbon offset providers that offer high quality offsets that have been verified by independent organizations. The Gold Standard and the Verified Carbon Standard (VCS) are two of the most well-known carbon offset verification programs.
Ongoing monitoring is necessary
Finally, companies need to continuously monitor and report their progress in meeting their net-zero targets. This involves setting up systems to track emissions data and reporting it on a regular basis. Additionally, companies should engage employees, shareholders, and other stakeholders in their net-zero journey to ensure buy-in and support.
With the right planning and execution, companies can successfully transition to a net-zero future. By taking action now, they can not only help mitigate climate change but also position themselves as leaders in the low-carbon economy.