Over the past few years, companies have started setting ambitious sustainability targets due to the time-sensitive nature of climate change. Among these targets, net zero and decarbonization have emerged as critical goals. Both represent a new and exciting opportunity for companies to take the lead in introducing and embedding emission reduction strategies throughout their business. It can be a daunting endeavor, especially with an ambitious goal such as net zero. However, with the right strategies and tools in place, companies can easily move the needle and meet their goals. In this blog we explore the concepts of net zero and decarbonization, highlighting their significance and challenges. We also provide practical steps companies can take to embark on their sustainability journey.
Understanding Net Zero
One of the most well-known and widely adopted targets is net zero – a state of equilibrium between the amount of greenhouse gases (GHG) released into the atmosphere, and the amount of greenhouse gases removed. Achieving net zero means offsetting any greenhouse gas emissions by removing an equivalent amount of these gases from the atmosphere, resulting in zero additional carbon from baseline levels.
Many countries have set a timeline to achieve a 45% reduction in their GHG emissions by 2030, and to reach net zero in 2050, based on guidance by the United Nations. The Race to Zero campaign rallies non-state actors, including companies, cities, regions, along with financial and educational and healthcare institutions, to halve their emissions in the next few years.
But achieving – and more importantly – maintaining a net zero world is said to be one of the trickiest challenges that we will ever face. It involves completely shifting the way we move in this world, what we consume, and our footprint produced. Rapid transformation and decisive action are required from all parties across the globe. And a key player required to achieve these goals is private enterprise.
The Role of Decarbonization
Decarbonization is one of the ways of getting to net zero. It involves the reduction of carbon in the atmosphere, often done by switching to sustainable energy sources that emit less. Popular sources include solar or wind power. Companies can use decarbonization principles to guide their strategic decisions and ensure that sustainable measures are being taken in every area of their business. Plus, there are benefits to integrating decarbonization strategies.
According to a McKinsey report, there is a potential for $9 to $12 trillion USD in annual sales by 2030 because of external demands from customers and investors shifting to focus on a low-carbon economy. Failing to decarbonize, on the flip side, could risk up to 20% of economy profit for companies by 2030.
How To Start Your Net Zero Journey
1. Create your data management strategy
To achieve net zero, it’s crucial to ensure you have the right data collection processes in place. This will enable you to capture the full picture of your performance and ensure accuracy when reporting to stakeholders. A technology solution, like a sustainability performance management software, can be the ideal partner here. The right software allows you to streamline data acquisition, and capture insights across your business through multiple capture options. It also enables you to view an audit trail of what has been tracked, when and by whom.
2. Get insight into your supply chain
Supply chains play a critical role in enhancing a company’s sustainability. It’s estimated that they generate approximately 60% of all carbon emissions globally. In order to reach net zero, a company must look to their supply chain to find areas of opportunity to reduce their emissions.
However, getting a full picture of your supply chain can be tricky, especially if you work with numerous large suppliers globally. Leveraging a solution that streamlines supplier assessments, engagement, and reporting can reduce manual administrative work. Additionally, it will ensure you are accurately capturing your data.
Cority’s Supply Chain Sustainability solution includes engagement and reporting tools like dedicated compliance dashboards and customizable scorecards to compare across supplier groups and categories. Capture primary carbon data directly from suppliers, accurately calculate emissions with easy-to-use Scope 3 tools, and feed this into your larger sustainability data collection for a full picture analysis.
3. Set targets and initiatives to track progress
When embarking on your net zero journey, it is key to set milestones and targets to better track performance. This will also help you understand any risks and opportunities, and showcase how your efforts are contributing towards your end-goal. Leveraging science-based targets (SBTs) can help provide specific standards and guidance to set goals that are in line with what’s needed to reach net zero.
Cority’s Sustainability Performance Management software collects the robust and verifiable ESG data required to inform setting SBTs. Once these targets are set, leverage dedicated targets dashboards and monitor progress on your net zero targets. Easily identify areas of risk and opportunity and share key successes within the company and external stakeholders.
4. Lean on the experts
Setting ambitious targets, like achieving net zero emissions, is necessary for our world, given the time-sensitive nature of climate change. It can be tricky to figure out where to start and what areas to focus your decarbonization efforts on. Here, it can be helpful to lean on sustainability experts that provide advisory services to help you build and define goals and milestones that are achievable for your organization. Cority’s award-winning team of ESG experts support our customers with defining their sustainability strategies through activities including training and workshops, carbon footprint assessments, supply chain risk analysis and more.
Climate change is one of the most critical issues in our lifetime. So, it is imperative that companies take a lead in reducing their carbon footprint. At Cority, we partner with 600+ companies looking to achieve and exceed their sustainability goals. Our software and advisory services support organizations along their data management and reporting journeys, increasing transparency and enabling them to build confidence in setting (and achieving!) net zero targets.
To start your net zero journey, explore Cority’s Sustainability Cloud solution and connect with our ESG and sustainability experts today.
