The Sustainability Frameworks series includes four articles focused on key components of corporate sustainability – Net Zero, ESG and Carbon Footprint Consulting. Part 1 dives into the Net Zero agenda and the need for better sustainability reporting.
2022 has passed, but its climate chaos follows us well into 2023.
The world’s carbon emissions from fossil fuels and cement hit a record high, rising by 1% to 36.6 billion tonnes – the highest ever.
What’s worrying is that, at this rate, the remaining carbon budget keeping the global temperature in check at 1.5o C will vanish in the next nine years.
If humanity wants to meet climate targets of limiting global temperature increase to 2o C, it needs to stabilise current emissions and also reduce emissions significantly, reaching net zero towards the end of the 21st century.
This article dives into the world’s net zero targets and how it aims to achieve them.
The World’s ‘Net Zero’ Agenda
In recent years, net zero has achieved celebrity status and almost become a buzzword to the extent that attention could dilute its meaning.
So, what does it, in effect, mean to be net zero?
For every unit of emission that individuals, organisations and countries pollute the environment with, an equal unit is cleared – making the net emissions’ zero’.
Becoming net zero calls for transformative, innovative and universal changes at scale. This transition reduces the odds of catastrophic damage from climate change while creating growth opportunities for low-emission projects and products.
Owing to its success, individuals, companies (big and small), and countries focus on controlling and offsetting their carbon emissions.
- By September 2022, 136 countries set a net zero target for the coming decades covering 83% of global carbon emissions. These include some of the world’s biggest polluters – China, the United States and the European Union.
- 1,100+ cities, 1,100+ educational institutions, 7,000+ companies and 500+ financial institutions are now part of the Race to Zero, pledging to take action against global emissions by 2030.
- More than 700 of the world’s largest publicly traded corporations took on net zero targets in June 2022. This number has gone up from 417 in December 2020.
These are big strides.
But Why Is the World Scrambling to Join the Net Zero Agenda?
Current estimates suggest that the world will not achieve the targets set by the Paris Agreement of 2015. Carbon emissions must reduce by 43% by 2030 (compared to 2019) to reach net zero by 2070. This will help achieve the 1.5o C target by the end of this century.
It warrants a substantial improvement in effective climate action efforts.
Notably, consumers and investors today are becoming increasingly aware of sustainability shortcomings across the globe. They’re more inclined to pump their money into socially and environmentally responsible enterprises.
As much as 76% of consumers are willing to cut all ties with companies that treat the environment, employees or community poorly.
PWC
In light of these developments, businesses are redirecting their strategic approach to better align with the global sustainability agenda.
How Can Businesses Achieve Net Zero?
Net zero has gradually evolved into a new standard of leadership for the corporate ecosystem. And private companies are joining the movement, too.
There are several ways by which businesses can work towards becoming net zero.
For instance, we can take carbon emission units out of the atmosphere through various sustainable projects, such as promoting land restoration, decreasing world hunger or conserving water.
A better and more strategic way is adopting ESG analysis and reporting. ESG can provide valuable insights into tracking the carbon footprint and creating long-term value for stakeholders. It also has a substantial positive impact on a company’s financial health, reinforcing confidence among investors.
As a result, ESG is becoming a popular method of achieving net zero for public and private companies:
88% of publicly traded, 79% of venture capital and private equity-backed and 67% of privately owned companies have ESG initiatives in place.
A deeper understanding of the ESG framework is crucial for businesses that want to reach their net-zero goals. Part 2 of this article covers ESG and its framework in detail.
Credits
The article was strategised by Deepa Sai
Ayesha is a freelance writer and editor with 5+ years of experience building brands online. She works extensively with B2B businesses in SaaS (Sales, Marketing & Ecommerce) and Sustainability. Previously a social media manager, she now loves writing long-form articles backed by meticulous research. Connect with her on LinkedIn.
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