Most of the world is committed to limiting global temperature rises to 1.5°C above pre-industrial levels to see off the worst effects of climate change. That means halving greenhouse gas (GHG) emissions by 2030 and hitting net-zero emissions by 2050.
Already, 53% of global GDP has made an intended or actual commitment to reaching net zero by 2050, according to the Energy and Climate Intelligence Unit. Among big businesses, Unilever pledges net-zero emissions from all of its products by 2039. Apple says it will become carbon neutral across its entire business, supply chain and product lifecycle by 2030. Ikea aims to be climate positive by 2030.
These three global brands are signing up to three different pledges. ‘Carbon jargon’ can make it difficult to differentiate the net zeros from the carbon neutrals, negatives and positives.
What’s in a pledge?
With net zero, the key word is ‘reducing’. Businesses pledge to reduce, as far as possible, greenhouse gas (GHG) emissions across all activities, including suppliers, buildings and processes. They cut their GHG emissions by improving operational efficiency and investing in plant and equipment upgrades, and by acquiring on-site or off-site renewable energy. Surplus emissions are offset by investing in projects such as sustainable reforestation or off-site renewable energy projects. In other words, what these businesses emit into the atmosphere is counterbalanced by what they take out.
Net zero pledges have risen 3-fold since 2019, with 1,541 commiting in 2020 from around 500 recorded in 2019.
A carbon neutral company balances its GHG emissions by removing an equivalent amount of carbon from the atmosphere. It doesn’t have to reduce its overall emissions but neutralizes its carbon footprint by either funding GHG reduction initiatives elsewhere or by purchasing carbon credits.
Carbon negative companies remove more carbon from the atmosphere than they emit. Microsoft President Brad Smith said in January 2020: “neutral is not enough” and pledged to reduce the company’s carbon impact to below net zero by 2030. Carbon positive companies go further still. They remove more carbon than they emit and deliver environmental benefit to other companies or localities. A carbon positive business might, for instance, generate more renewable energy than it needs and feed the surplus back to the grid.
If there is a hierarchy of pledges, then carbon positive sits at the top, but other rungs on the ladder are no less important. Ambition, however, must be matched by high-quality, verifiable and transparent data, with timelines and progress against goals to prove to the public, investors and employees that the business really does mean business on climate change.
For businesses that declare their intent to become net zero, carbon neutral or something else, pledge platforms help with publicly validating their ambitions and pegging performance to targets. Here’s what the major platforms do.
- More than 290 qualifying companies, listed on RE100’s website, have ambitious targets for achieving 100% renewable electricity across their global operations by 2050. As a minimum, they should be at 60% renewable electricity by 2030, and 90% by 2040.
- Electricity sourced by businesses must fit with RE100’s published criteria and be consumed within the same market boundary that it is produced.
- Every year, companies report their progress towards 100% renewable electricity via either RE100’s reporting spreadsheet or CDP’s Climate Change questionnaire. Data is published in RE100’s annual reports.
- Member companies already drive enough renewable demand to power a medium-sized country.
Race to Zero
- Almost 1,400 companies, as well as 569 universities, 454 cities, 23 regions, 74 of the biggest investors and 120 countries are in the Race to Zero.
- It aggregates net-zero commitments from leading networks and initiatives across the climate action community and sets out the substantive criteria that industry participants must meet.
- Participants pledge to reach net zero by 2050 at the latest.
- Ahead of the UN’s Climate Change Conference (COP26) in November this year, participants will submit interim performance targets for 2025 and 2030, and their net-zero roadmap.
- They commit to report progress against targets annually.
Science-Based Targets initiative (SBTi)
- More than 1,200 global businesses are part of SBTi. They include Facebook, Amazon and Ford.
- Science-based targets demonstrate how quickly and by how much private-sector companies must reduce their GHG emissions.
- Businesses receive technical support, independent assessment and validation of their targets and report annually on progress.
The World Green Building Council (WorldGBC)
- WorldGBC defines a net-zero carbon building as a structure that is both highly energy efficient and fully powered by on-site or off-site renewable energy.
- Its Net Zero Carbon Buildings Commitment challenges businesses, organizations, cities, states and regions to have all buildings within their direct control operating at net-zero carbon by 2030, and all buildings by 2050.
- A mix of energy-efficiency improvements, including behavioral changes; upgrades to plant and equipment, such as retrofitting LED lighting; green energy purchases and, if necessary, carbon offsets, will help deliver a net-zero carbon building.
- WorldGBC’s Advancing Net Zero (ANZ) project is embraced by 27 Green Building Councils, including in Australia, the US, Canada and the UK.
- Under the program, 418 buildings have been certified net zero.
- 95 businesses, cities and states/regions have committed to net-zero buildings.
All human activity puts GHGs into the atmosphere. Over the next three decades, efforts to balance GHGs going in with those going out – or, better still, creating a carbon deficit – will have planet-changing consequences. There is overwhelming support from businesses for net zero; increasingly, investors prioritize net-zero companies too. But not all companies are at the same level of preparedness. Though any action to combat climate change is valid, time is short. Businesses need to deliver visibly on ambitious and measurable climate pledges.