The Rise of Corporate Carbon Neutrality: What it Means for Your Business
This is part I of a two-part blog series exploring carbon neutrality goals for business
It’s Climate Week and today from the UN Climate Action Summit, Secretary-General António Guterres is calling on leaders to present their concrete, realistic plans to dramatically reduce greenhouse gas emissions and move toward a zero-carbon future.
Business plays a key role in that future. Increasingly, companies like Nestle, Amazon and Schneider Electric are making bold promises to carbon neutrality. But what is carbon neutrality, how can it benefit business and how can businesses act? In this blog, our sustainability expert, Gabriel de Malleray, explores these questions and more.
What does it mean to be carbon neutral?
In October 2018, the International Panel on Climate Change (IPCC) issued a report stipulating a new climate change red line: global temperature change of only 1.5 degrees Celsius, a reduction from the previous 2-degree threshold. The report found that without drastic measures to cut carbon emissions, reduce energy use and remove carbon already in the atmosphere, it is unlikely that warming will remain below 1.5 degrees. The report also shows that the difference between 1.5 degrees and 2 degrees – the limit governments committed to in 2015 under the Paris Agreement – is critical to millions of peoples’ homes, jobs and lives.
To reach the 1.5-degree limit, an increasing number of organizations are committing not only to carbon reduction, but to carbon neutrality. Carbon neutrality means changing how we behave to ensure that no additional carbon is added to the atmosphere, striking a net zero balance between releasing carbon and capturing, or sequestering, it. This net zero balance can be applied to any subsystem on earth, such as countries, cities, companies or even individuals.
Today, net zero, carbon neutral or climate neutral claims lack clear, widely accepted definitions. Initiatives differ based on what a company sells, owns, or influences.
For instance, an organization may choose to focus on going carbon neutral with one product or product line as an interim step toward making greater organizational reductions. Another typical step is to adopt carbon neutrality for direct emissions (scope 1) and indirect emissions from purchased electricity (scope 2). While an important step, this goal does not address other sources of indirect emissions (scope 3), which are typically one of the largest and most difficult to address components of an organization’s overall carbon footprint.
The bottom line? Our carbon footprints must shrink faster.