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Is Net Zero the right goal to set?

Net zero. You may have heard, read or spoken about it so many times already, and yet it may still raise a few eyebrows here and there. A rallying cry that is not only gaining in popularity but one that is synonymous to a world drastically in need of shifting gears. A world that needs to mitigate and adapt to the adverse effects of climate change. 

Ever since the Paris Agreement came into fruition almost ten years ago, worldwide consensus has been to remove carbon from the atmosphere whilst reducing our greenhouse gas (GHG) emissions with the hope of reaching net zero by the middle of the century. It is our beacon of hope in transitioning towards a more regenerative and renewable future. With the largest chunk of GHG emissions associated with climate breakdown coming from business-driven economic activities, it is clear that organizations across sectors have a massive role to play today and tomorrow.

But what does net zero even mean?

In a nutshell, net zero represents a state in which GHG emissions from human activities and the removal of these gases are balanced over a given period of time. This entails removing as many emissions as we produce. While it may seem like a great idea in principle, achieving net zero remains challenging for many companies in practice as it requires innovative technologies and cooperation across the entire value chain.

How do we achieve net zero?

As more companies are exposed to risks imposed by the climate crisis and other external pressures, more and more of them are adopting specific targets and strategies to do something about it. They set targets and bold ambitions with a combination of different approaches to reach net zero

  • Actions to reduce their own emissions as well as those across their value chain
  • Actions to directly remove greenhouse gasses from the atmosphere
  • Actions to offset their emissions by purchasing carbon credits

Why is it a problem to solely focus on GHG emissions?

Today it often appears that GHG emissions are the only source of damage inflicted by humanity on our planet. It causes all efforts to be focused on that rather than looking at the bigger picture. It diverts attention from other pressing environmental issues that need our attention. This prompts the question: has net zero purely become a misleading and unhelpful badge that companies strive for? Time to look at three key issues behind net zero.

Issues with net zero summed in an infographic

Issue #1 – Setting a target with no concrete action

Net zero claims vary enormously in terms of credibility. To date, there is no binding regulation requiring a transition to net zero, meaning that commitments and targets are purely made on a voluntary basis with little to no accountability, transparency or enforcement. Despite numerous promises and goals made in the past, few have been achieved. While some companies embark on clearly-defined pathways to reduce GHG emissions like Science Based Targets, even these initiatives have come under recent scrutiny for allowing the offsetting of Scope 3 emissions.  Now more than ever, companies are jumping on the bandwagon making ambitious pledges to reach net zero emissions by 2050. Yet, many are uncertain where to even get started…

Issue #2 – Compensating emissions through offsets

Many companies have embarked on a sustainability journey that requires the bare minimum. They base their efforts on continuing with business as usual and to instead rely on carbon offsets to make amends for the damage they cause. They compensate for their emissions by investing in projects that remove greenhouse gasses from the atmosphere, such as tree planting . The classic ‘burn now, pay later’ approach undermines the urgency of emission reductions by actively postponing action. 

To set the record straight here, not all offsetting schemes lack positive impact. However, the real issue is the lack of measurement and quality control coupled with companies’ over-reliance on doing what they have always been doing without prioritizing the reduction of emissions. They instead compensate and feel that they are off the hook without having to change their own operations.

Issue #3 – Falling into the carbon tunnel vision trap 

There is no doubt that limiting GHG emissions is imperative to fighting the climate crisis. GHG emissions are the primary contributor to global warming, making their reduction imperative for our future. It is therefore understandable that they are a common feature in most sustainability strategies out there. 

However, this focus can lead to some misunderstandings. A comprehensive sustainability strategy should not solely focus on a narrow concept of net zero, but instead encompass a broad range of challenges, risks, and implications. A narrow focus on carbon emissions can limit our ability to  drive impactful action by narrowly emphasizing on one metric alone: GHG emissions. This blind spot causes us to overlook other significant aspects integral to sustainability and ESG.

How can we adopt systemic thinking?

To achieve widespread and lasting impact, we must adopt holistic and system thinking in our approach to sustainability. Broadening horizons will not only allow us to explore new opportunities but also address present and future risks comprehensively. 

There are a myriad of complex and interrelated factors that go far beyond GHG emissions. From soil degradation to desertification, from water pollution to biodiversity loss, our planet is facing a range of inextricably intertwined issues all related to net zero emissions. By overwhelmingly focusing on emissions, we have neglected our greatest ally in taking out CO2e from the atmosphere and storing it away: nature. Without nature, achieving net zero is unattainable.

Using double materiality to focus your priorities

The question that arises now is: what should we prioritize instead? For actionable steps and a comprehensive sustainability approach, we can turn to a double materiality assessment. A strategic and impactful way of addressing the most pressing ESG risks and opportunities that your business may face. Instead of providing a long list for you to tackle, double materiality checks for interdependencies by clustering them into well-defined factors to consider. It looks at the impact that your business has on the planet and society, whilst also unfolding the potential impact a changing planet will have on your operations. By taking into account all stakeholders, a business can then prioritize which issues to focus on first and therefore not overlook new potential possibilities to drive meaningful, impactful action.

Conclusion

The need to go beyond GHG emissions does by no means downplay the value of reducing and removing emissions. Instead, it highlights the necessity of  taking comprehensive and holistic action across various sustainability dimensions. The planetary crisis we face is multifaceted and interconnected, and so should also be our approach to combating it.

How can we help?

Our Double Materiality Assessment not only analyzes the external impact on your finances but also scrutinizes the impact your company has on the planet and people. We help you shape a relevant, multidimensional sustainability strategy by looking at all essential ESG aspects of your business.

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