Last year, the UK Government set a net zero target by 2050 and since then businesses have been setting net zero targets with ever shorter timeframes.
In the last few months we have seen a number of companies announce net zero carbon targets. The race is on to see who can be the most ambitious. In this race for leadership, there’s a risk that commitments get labelled as greenwash, damaging corporate reputations.
So, which of these targets have the potential to have a real impact on the greenhouse gas emissions responsible for the climate crisis, and which of these targets are set by those who are simply jumping on the net zero bandwagon in an attempt to make their business look good? Recent net zero announcements include ambitious targets from the like off National Trust, Microsoft and IKEA, click here to see the full list.
What makes a net zero target credible?
We are seeing numerous businesses announcing very ambitious timelines to achieve net zero by 2030 and even 2020, but in some cases there is little real substance behind these targets. Some targets do not demand energy and carbon reductions in line with what the world needs to achieve to limit global warming to 1.5 degrees or well-below 2 degrees. Some businesses are simply buying a whole lot of carbon offsets, while continuing to produce the same carbon emissions or reducing at a slower rate than what is required. Whilst offsetting has many benefits, there are several different offsetting approaches, some more credible than others. The costs vary dramatically and so too does the impact on the global accumulation of greenhouse gases in the atmosphere.
Carbon Intelligence is working with leading businesses and some of the most prominent brands in the world, to develop a clear roadmap of emissions reductions in their operations and across their supply chains. In line with the Paris agreement, this roadmap needs to drive reductions that will limit the world’s increase in temperature to 1.5 degrees or well-below 2 degrees as a maximum limit. Couple this science-based emissions reduction pathway with a credible strategy of carbon removal and a business can confidently announce a net zero or net negative target that stands up to scrutiny.
These emission reduction targets are called science-based targets and they are approved through the Science Based Targets initiative (SBTi). The SBTi has been set up with the combined backing of the CDP, WRI, UN Global Compact and WWF. Incorporating a science-based target for carbon reduction into a net zero strategy will create a meaningful impact on carbon emissions
A credible pathway to achieve a net zero target by 2030
Both carbon reduction and carbon removals are required to achieve a credible net zero target as shown in the chart above. A net zero roadmap should prioritise absolute reduction in emissions – e.g.: through improving energy efficiency in buildings and operations, reducing travel and supply chain emissions, and switching to renewable energy. Then secondly look to remove emissions, which can be achieved through investing in carbon removal in the supply chain or purchasing credible carbon offsets in the market. The carbon offsetting market is complex and whilst some standards exist (e.g. Goldstandard and VCS) there is unfortunately no single international standard for guaranteed carbon removal, so businesses need to make a choice of what is credible and what is not.
Carbon offsets need careful selection
The crux of understanding whether a project can be used as part of a net zero strategy is in determining additionality – whether the project would have occurred in the absence of the revenue gained from the sale of the offsets. This is often hard to prove – for example – with a renewable energy project, as these projects are in many cases viable without this source of revenue.
Business must also consider whether projects are truly preventing a net-release of emissions and stopping the accumulation of emissions in the atmosphere. For example, balancing emissions through carbon sequestration by trees or carbon capture and storage technology. As opposed to balancing emissions by avoiding emissions elsewhere, for example fuel switching schemes, which ultimately still results in an accumulation of carbon within the atmosphere.
There are also issues in quantification that come with some renewables projects, and sometimes savings can be counted twice. For example if a community school benefits from the installation of solar power to replace fossil fuel energy, and this 1 tonne of avoided emissions is sold to a company in the UK to offset flights, does that community school now report its carbon emissions based on solar power or fossil fuel power? If it reports its carbon emissions based on solar power, the avoided emissions are being counted twice – once by the school and once by the company in the UK. But the atmosphere has only seen the avoidance of 1 tonne of carbon not 2 tonnes.
As more and more business set net zero targets, the demand for offsets will grow and so too will the cost per tonne. Businesses should therefore focus on the reduction of carbon emissions as a priority. It’s the best way to mitigate climate change, improves resource efficiency and helps reduce a company’s exposure to the transition risks it will face as it adjusts to a low carbon economy.
If you are looking to set a net zero target for your business, then consider the following three questions.
Will your net zero targets stand up to scrutiny?
What you can do next
Before setting a net zero target, it is imperative that a business develops a clear roadmap of the actions that will reduce its own emissions as far as possible in the first instance. Announcing a net zero target without a clear strategic roadmap may well have the opposite effect to what was intended – it risks damaging your green credentials more than enhancing them. Our team of carbon experts are working across a range a sectors to develop credible net zero strategies and we can help you and your board set a strategy that will stand the test of time and position your business as a true market leader.