Emissions

Introduction

In the fight for climate, the corporate sector plays a critical role, while at the same time bearing a heavy chunk of responsibility. Ultimately, it’s a matter of survival for businesses: climate change and extreme weather events have a direct impact on 70% of all economic sectors worldwide. Good business and climate action is now one and the same thing.

‍

For a while now, most companies tackled their emissions by simply measuring them, then buying carbon offsets in order to declare themselves “carbon neutral”. That’s not enough anymore; not for the climate, not for shareholders and employees, and definitely not for consumers.

‍

In this playbook, we take an in-depth look at how any company can contribute to the global goal of achieving net zero emissions and building a safe climate future. We describe the steps employees can take to put this goal at the centre of their company’s strategies.

‍

We know that each company’s climate journey is different, just like every individual is. We’ll help you meet your company where they are, and take the next step towards bold and equitable climate action.

‍

‍

Setting the scene

“The cumulative scientific evidence is unequivocal: Climate change is a threat to human well-being and planetary health. Any further delay in concerted anticipatory global action on adaptation and mitigation will miss a brief and rapidly closing window of opportunity to secure a liveable and sustainable future for all.”

This quote is from the 2022 IPCC report, which represents the latest and most sophisticated analysis of climate change. The message is pretty clear: no more debate, no more equivocation, we need to act now.  

It's a lot to take in, we know. And it can feel overwhelming at the best of times. But you’re here because you’ve made the decision to step up to the plate. You’re here because you’re committed to using the influence you have to make a positive impact. That’s amazing, and we’re glad to have you with us.  

Science tells us that halving our global emissions by 2030 and achieving net zero by 2050 is basically our best shot at securing a liveable future. In other words, if we don’t get this right, nothing else really matters.

So what can we do about it? Well, there are two main levers we can pull when it comes to emissions:

1. Reduction: Emit less CO2e into the atmosphere in the first place
2. Increase Carbon Sinks: Develop carbon removal and sequestration projects

A meaningful corporate climate plan tackles both these levers. Let’s see how this needs to play out and let’s do this!

‍

Further reading: A mental model for combating climate change - by Nan Ransenhoff, Head of Climate change at payment company Stripe.

‍

Why choose this goal as an employee?

Typically, company emission reduction goals sit within sustainability teams, but if we’re realistically going to hit these targets, we need everyone in the organisation working together. Every employee can and should leverage their unique skills to advocate for stronger emission reduction efforts.  

Is this the right goal?

Every company needs to cut carbon. For some companies, the bulk of the impact lies with how they engage with their customers - who they choose to work with, and the type of work they do for them. Think about the biggest opportunity for your company, and what simple actions can bring about meaningful change.

‍

Things you need to know right off the bat:

• Anyone can do this. The people who make change are the ones who try. You already have more expertise and power to build your case than you know. The most important thing is to get started.‍

• Community is key. You’re not alone in this. People working for companies of all sizes and sectors are concerned about the climate crisis. They’re looking for ways to take action. This means there are probably others in your workplace who also support the establishment of an ambitious climate commitment. You’ll be more successful when you get together with a few colleagues and have a team of voices working together.

• ‍This is a journey. Reducing emissions is not a one-off initiative. It’s a dynamic process that will mobilise the entire company and has transformative potential. The trick is to take it one step at a time.

What is a climate plan?

First we need to understand what makes a credible and robust climate plan. A corporate climate plan generally has three steps: Measure, Reduce, Contribute. We’re going to run through each of them below.

‍

Measure

A 2021 BCG study revealed that while 85% of organisations are concerned about reducing their emissions, only 9% of them are able to measure them comprehensively. Around 86% of the reporting is still done in Excel (no offence to Excel, but there are better, less stressful ways to measure emissions) and the average error rate is as high as 40%.

In order to understand where your emissions are coming from, and how to measure them, you need to run a carbon footprint assessment. This assessment can be done in-house, or with the help of consultants. New solutions are also emerging, with software companies looking to improve the process by leveraging automation and artificial intelligence (see our guide on this below)

This stuff can get complicated, especially if you have a large organisation with dozens of offices. If you’re looking for a place to get started, we’ve put together a handy guide to explain the process, along with simple solutions for your company.

‍

🛠︎Solutions Guide: Carbon Measurement

‍

What are emissions scopes?

Emission scopes define the boundaries for the calculation of the carbon footprint. In other words, they represent exactly what’s being counted.
‍
The Greenhouse Gas Protocol defines three different scopes, or categories, of emissions:
‍Scope 1 -> Direct emissions from things that are owned by your company, like emissions from burning fuel to drive company-owned vehicles, or natural gas used to heat your office.
‍Scope 2 -> Indirect emissions from consumption of purchased electricity, heating, cooling and steam, such as electricity used to power your warehouse.
‍Scope 3 -> Basically everything else. Scope 3 divides the value chain into “upstream” (production and transportation of products and services) and “downstream”  (the use and disposal of products by customers)

‍

Reduce

For a while now, most companies tackled their emissions by simply measuring them, then buying carbon offsets in order to declare themselves “carbon neutral”. That’s not really enough anymore; not for the climate, not for shareholders, and definitely not for consumers. Companies now are expected to lift their game and implement high-impact reduction initiatives in order to align themselves with a low-carbon future.

Here’s a few examples of things that can have a significant impact on your operational and value chain emissions:

• Switching to 100% renewable energy: We have a playbook all about this goal. You can download it here.
• Decarbonizing the supply chain: Scope 3 emissions often represent the bulk of a company's emissions, which makes decarbonising your supply chain a huge opportunity. Companies should prioritise suppliers that are making the largest efforts in this area. They can also encourage their vendors to take action by making climate disclosures mandatory.
• Reducing business travel:  Two years of a global pandemic have shown that it’s possible to run a business without physical meetings. Consider which business travel is truly essential, and try to limit flying to meetings whenever possible. Encourage employees to consider alternatives to flying (for example, giving them extra time off when they choose not to fly!)

‍

Contribute

This is the last piece of the puzzle, and should only be considered for emissions that truly cannot be reduced today.

Companies can fund projects that either reduce emissions or remove carbon from the atmosphere. This ties back to our second lever: increasing carbon sinks and sequestration projects.

‍

Further reading: Measurement platform Sweep’s helpful guide on how companies can implement climate programmes.

So what about Net Zero?

A lot of companies appear to be taking climate change seriously and have announced fairly progressive commitments. Despite all these pledges, emissions in 2021 are projected to rebound by nearly 5% from 2020, just below their 2019 peak. (IEA)

The problem is exactly what you might expect: lots of noise and very little action.

The reality is that most organisations' commitments are not adequately addressing the challenge. Here are the three most common pitfalls when it comes to corporate net zero claims:

1. Setting a vague, distant target (“Net Zero by 2050” is currently the most popular one) with no near-term accountability. The convenient thing about setting a target far in the future is that it can be the next CEO’s problem. We need immediate reductions and interim targets.

2. Relying on problematic carbon offsets to achieve targets. Though carbon offsets are an important part of the puzzle in reaching global net zero, they should only be used as a last resort, for truly unavoidable emissions.

3. Having a strong commitment but no plan to achieve the target. Without proper climate literacy training, few leaders really understand what it takes for a business to achieve its decarbonisation goals. (That’s where this playbook comes in.)

Further reading: Why the world needs better climate pledges - Jonathan Foley from Project Drawdown

‍

What is Net Zero?

Net Zero, or carbon neutrality, is defined by science as a balance between anthropogenic (i.e. human-made) CO2 emissions and anthropogenic CO2 removals. In its scientific definition, it really only applies at the global level. Net Zero has been extended to countries, in the context of the Paris Agreement, but when it comes to corporations, the concept loses some of its substance.

Can a company be Net Zero?

Net Zero has been extended to companies to mean a balance between the greenhouse gas emissions a company produces versus those taken out of the atmosphere through carbon sinks. Most of the time, ‘net zero’ and ‘carbon neutral’ are used interchangeably.

In theory, net zero implies that carbon emissions have been reduced to their absolute minimum, with offsetting only used as a last resort. But practically speaking, this is hard to do, because there’s no formal way of measuring what “absolute minimum” actually means.

As a result, an increasing number of climate organisations are calling for a shift in paradigm, pushing the corporate sector to rethink its approach to carbon neutrality. It looks like this:

‍

This is more than a rhetorical debate. It has important implications on how organisations set and communicate their climate commitment.

‍

For more information on this topic, check out:
Net Zero Standard by the Science-Based Target Initiative
Net Zero Initiative by Carbone4

What are the benefits for companies?

Having a strong climate plan does not necessarily come at the expense of profits and growth. There are many benefits associated with planning for a low-carbon future, both short- and long-term, including:

Recruit and retain talent

Companies that demonstrate strong environmental and social values have an advantage in recruiting and retaining employees. Deloitte found that purpose-driven companies had 40% higher levels of employee retention than their competitors. That’s huge news for your bottom line. Google’s CEO Sundar Pichai stated that companies that fail to go carbon-free will lose the talent war.

Get ahead of regulation

Countries and regions are increasing regulation around climate disclosures. In Australia, companies that meet certain emissions thresholds have to disclose their emissions under the National Greenhouse and Energy Reporting scheme.  The Californian Senate recently passed the first bill in the U.S. requiring large companies to disclose all GHG emissions.  Governments are also making carbon pollution more expensive by implementing carbon trading schemes. All this stuff is coming down the pipeline. You can either hide from it, or fix it beforehand.

It’s only a matter of time until climate policy catches on, and the earlier your organisation starts taking action, the better positioned you’ll be in the future.

‍

Further reading:
How can your business benefit from climate action — short and long term? - Leaders for Climate Action

Climate Justice

Addressing the climate crisis is about more than just emissions. It’s about making a just transition and addressing the structural inequalities that created the crisis in the first place.

Climate justice is about recognising a simple truth: that climate change disproportionately affects communities who contribute little to the problem. These communities also disproportionately live with the key drivers of climate change, including the mining and burning of fossil fuels, air, land and water degradation, and industrialisation. As is often the case with climate disasters, the people causing the problems are rarely the ones picking up the tab.

As companies take action to reduce their carbon footprints, they also need to put climate justice at the centre of their plans and make sure they address the potential impacts of their actions on marginalised communities.

So how will this look? Well, let’s start with the type of offsets purchased by companies. Nature-based solutions and emission reduction projects often require the use of land that belongs to Indigenous people, who in many cases have not given their consent.

A more effective strategy might be to invest in strengthening the land rights of Indigenous people, who tend to be the most effective guardians of ecosystems, and the carbon they contain.  

‍

‍