The BiU Guide:

Road to Net Zero

"Right now, we are facing a man-made disaster of global scale.
Our greatest threat in thousands of years. Climate Change."

- Sir David Attenborough

Introduction to net zero

Anthony Mayall, CCO, Dated 22/6/20, Midst of C-19

We’ve been hearing the words “net zero” a lot in recent months, but if you’re running a business in the UK at the moment, your attention has probably been on more urgent issues.

The bad news is that climate change hasn’t gone away just because we’ve all been focused on COVID-19 – and it’s an even bigger global problem than the virus. The global death toll from the virus is currently somewhere below half a million, and we’re rightly pouring resources into fixing the problem. But climate change kills roughly that number of people every three years, and has done so for decades. The World Health Organisation (WHO)  estimates air pollution kills seven million people worldwide every year.

How have we reached a point where 0.6 million people are dying from the same cause between one Olympics and the next, yet this doesn’t make the news? And how can we not see it as a priority to stop that number of deaths getting any higher?

Businesses that commit to net zero are resolving to play their part in fighting this unprecedented global challenge. The good news is that businesses that start on the journey to net zero often find they improve in other areas, such as cutting unnecessary costs or streamlining process.

Because there’s a lot of confusion and misinformation about the topic, we’ve created this quick introductory guide to explain the basics. If you’re interested in getting tailored advice to your organisation, we’re always just a phone call away.

What is net zero?

“Net zero” means achieving a state where the greenhouse gases (GHGs) emitted do not exceed the gases being removed from the atmosphere, so that the overall balance is zero.

To achieve net zero means that you are no longer adding to the increasing concentration of greenhouse gases in the atmosphere, so you are no longer contributing to the warming of the earth. It’s sometimes described as being carbon neutral, but net zero is a more useful term because it covers all GHGs, such as methane and nitrogen oxide, not just carbon.

Why are businesses aiming for net zero?

The overarching reason is of course the huge threat posed by climate change.  The earth’s temperature has already risen by roughly 0.87oC above pre-industrial levels and the consequences of this seemingly small rise are estimated by the United Nations to kill over 150,000 people every year. We can’t reverse the earth’s warming, but the Intergovernmental Panel on Climate Change (IPCC) recommends that we try to keep it to 1.5oC or less above pre-industrial levels.

The more immediate context is that governments and intergovernmental organisations around the world are setting their own net zero targets in response to climate change. In the early 1990s, 154 countries signed the United Nations Framework Convention on Climate Change (UNFCCC), committing themselves to reduce their greenhouse gas emissions. There are now 196 parties to the convention, and in 2015 they all signed the Paris Agreement confirming the aim of staying well below 2oC of global warming (with the aim of limiting global warming to 1.5oC).

Individual governments are setting their own targets too. Sweden was the first country to give itself a legally binding target: net zero GHG emissions by 2045. Last year the UK became the first major economy to commit in law to a net zero target (with a slightly later deadline of 2050). France, Denmark and New Zealand have followed while many other countries are considering it.

It’s not hard to see that when governments are legally committed to drastically cutting emissions by a certain date, future policy will be created with this in mind. There may be stronger incentives for businesses to get on the path to net zero, or even regulations requiring it.

Net Zero Global Race

Achieved net zero

BHUTAN 🇧🇹
SURINAME 🇸🇷

Net zero in law

SWEDEN 🇸🇪 [2045]
UK 🇬🇧 [2050]
DENMARK 🇩🇰 [2050]
FRANCE 🇫🇷 [2050]
NEW ZEALAND 🇳🇿 [2050]

Net zero proposed legislation

EUROPEAN UNION 🇪🇺 [2050]
SPAIN 🇪🇸 [2050]
CHILE 🇨🇱 [2050]
FIJI 🇫🇯 [2050]

Net zero in policy

FINLAND 🇫🇮 [2035]
AUSTRIA 🇦🇹[2040]
ICELAND 🇮🇸 [2040]
GERMANY 🇩🇪 [2050]
SWITZERLAND 🇨🇭 [2050]
NORWAY 🇳🇴 [2050]
PORTUGAL 🇵🇹 [2050]
COSTA RICA 🇨🇷 [2050]
MARSHALL ISLANDS 🇲🇭 [2050]

Under discussion

EVERYONE ELSE IN THE PARIS AGREEMENT 🌐 [2050]

Businesses who engage with the issue now won’t be caught unprepared

But there is a more immediate incentive for a business to start on the journey to net zero: our changing culture

Business investors increasingly want to know that a company is environmentally sustainable before they invest. The Task Force on Climate-Related Financial Disclosures was set up less than five years ago to make information about companies’ carbon footprint more transparent, and the total market capitalisation of the organisations that have already signed up to support it is over $12 trillion. If your business model requires investors, having an achievable and robust plan to reach net zero is a huge competitive advantage.

There’s a similar shift in the attitudes of both customers and employees. A survey last year found that 47% of internet users had stopped spending money with a brand when they realised it didn’t fit their personal values – and environmental concerns were the main reason people gave for turning away. Meanwhile, 70% of workers in one American survey said that environmental sustainability was an important factor in their decision whether or not to stay with a company. If your business wants loyalty from customers and employees, a plan coupled with meaningful action to reduce your GHG emissions is no longer optional.

Which businesses are moving to net zero?

You might expect the list of businesses with a net zero target to be dominated by companies in “green” sectors, such as renewable energy supplier Ecotricity with its target of net zero by 2025. But many different kinds of businesses have made the commitment, including furniture giant IKEA, one of the world’s largest retailers Tesco, steelmaker ThyseenKrupp, and Nestle, the second biggest food and drink company in the world.

Net zero IKEA
Net zero Tesco
Net zero ThyseenKrupp
Net zero Nestle

It is significant that many companies in traditionally emissions-intensive sectors have made the commitment too, such as BP, Repsol, and the airline Qantas.

Net zero BP
Net zero Repsol
Net zero Qantas

In the UK, larger organisations have been helped along the road to net zero by their obligations under the Streamlined Energy and Carbon Reporting (SECR) regulations. These oblige large companies and LLPs to measure how much carbon they’re emitting and publicly report on it, even if they do nothing to reduce it.

Many companies find that the SECR-mandated process of measuring emissions in detail helps them to identify areas where it would be easy and cost-effective to cut emissions. So the process of complying with SECR often leads businesses to cut their greenhouse gas emissions, even though there is no obligation to do so.

Are there any other benefits to setting a net zero target now?

The most immediate benefit of starting on the path to net zero, for most businesses, is cutting energy costs. Most businesses start with the “low-hanging fruit” of changes that are simple and cost-effective in the short term, then move on to changes that take some time to pay for themselves.

Getting all the way to net zero usually involves re-examining every aspect of your business and making radical changes. That’s why most companies need a multi-year plan for getting there. But as time goes on, continuing with unsustainable levels of emissions will become a less and less realistic option. Public attitudes and legislative frameworks will eventually push businesses towards cutting emissions. Getting a plan in place and taking action now means that you can carry it out more gradually and future-proof your business. As new solutions are developed and investment in transformational technologies grows, these opportunities will become more accessible to your businesses which means your plans will and should develop and grow over time.

Where on earth do I start?

As the saying goes, you can’t manage what you don’t measure. Data is absolutely key to any kind of emissions reduction plan. You need to have a clear idea of what emissions you are producing in different areas of your business before you can work on bringing them down.

Some businesses focus just on their direct emissions (called Scope 1 in industry jargon), which means emissions from the fuel your business burns itself. On-site heating, fleet cars and so on. Emissions from electricity purchased and used by your business (Scope 2) must also be included in your net zero planning.

A genuinely net zero approach also looks at other indirect emissions from areas such as the raw materials you buy, the transport of your goods, the generation of the fuel you use and so on.

Once you know how much energy you’re using, you can then focus on what can be done to reduce it. That will typically happen through a mix of energy efficiency measures and energy demand reduction.

Your remaining energy demand should be supplied by renewable sources. These could be on-site, or off-site via a Corporate Power Purchase Agreement (for more info on CPPAs, read our guide).

Know the unknown

On-going data monitoring and clear visibility of your emissions is key. This ensures you always understand the “gap” between your current emissions and where you need to get to to achieve net zero.

Every business will have a different path to net zero, and the easiest way to develop a plan that works for your specific needs is by getting professional, tailored advice.

“The challenge of climate change sometimes feels too enormous to face, but a commitment to net zero sets a clear intention. This is one significant step you can take to slow global warming and save lives. Once the intention is set, actions will be aligned with that and when you start on that pathway, you’re moving from being part of the problem to being part of the solution.”

Bryony Karsenbarg, Head of Carbon and Energy, BiU

Pathways to net zero

Currently, there’s no definitive government-led way to journey to net zero. An organisation’s aspirations, budget and resources can determine the route it takes. There are a number of energy and carbon emissions reporting and reduction schemes companies can work towards, which will help build a base for reporting against any net zero tax the government will impose in the coming years.

Companies such as BiU develop an organisation’s energy and carbon optimisation program around their defined goals and baseline reporting. This provides an initial roadmap of how energy use and emissions can be reduced in line with their current level of ambition. We encourage action to be taken straight away to start making savings and to reduce emissions. From there a road map to net zero is developed in partnership with the organisation resulting in a comprehensive program by BiU for action.

The government may bring in its own reporting scheme, along the lines of past and present schemes such as CRC, CCA, SECR and ESOS, which will determine what and how emissions are reported against net zero UK goals.

Some of the most common schemes/initiatives a company’s carbon and energy program would adhere to are:

Science Based Targets (SBT)

“Science-based targets provide companies with a clearly defined pathway to future-proof growth by specifying how much and how quickly they need to reduce their greenhouse gas emissions“. As of writing, 817 companies are taking science-based climate action and 339 companies have approved science-based targets. SBT have become a widely regarded benchmark for net zero action.

Sustainable Development Goals (SDG)

The UN’s SDG is a shared blueprint helping governments and stakeholders make the sustainable development a reality. A pledge to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030.

FTSE4Good Index

An index measuring the performance of companies that demonstrate strong Environmental, Social and Governance (ESG) practices.

Carbon Disclosure Project

A global not-for-profit that runs the disclosure system for companies, cities, states and regions to manage their environmental impact.

Verified Carbon Standard (VCS)

The most widely used voluntary GHG program with over 200 million tonnes of carbon/GHG emissions removed/ reduced by over 1500 certified projects.

Achieving net zero

This is a great challenge with great opportunity and by  setting the intention and creating a comprehensive, robust, and actionable energy and carbon optimisation and reporting program you’re not wishing you started yesterday to achieve net zero emissions for your business.

Never put off tomorrow what you can do today.

Jargon buster: Net zero

Some of the phrases and acronyms you’ll come across when talking about net zero…

Net zero

Achieving a state where the greenhouse gases emitted do not exceed the gases being removed from the atmosphere

GHGs

Greenhouse gases

IPCC

Intergovernmental Panel on Climate Change

UN

United Nations

UNFCCC

United Nations Framework Convention on Climate Change

SECR

Streamlined Energy and Carbon Reporting

CPPAs

Corporate Power Purchase Agreements

Paris Agreement

A UN goal of limiting global temperature increase to well below 2oC

Top 3 FAQS: Net zero

1. What is the difference between net zero and carbon neutral?

Net zero is achieving a state where the greenhouse gases emitted do not exceed the gases being removed from the atmosphere, which includes a range of gases such as carbon, methane and nitrogen oxide. While carbon neutral solely focuses on carbon emissions reductions and neutrality.

2. What is typically the largest contributor to emissions/GHGs in a business?

This depends on the nature of a business. A full audit of energy and carbon emissions across the business will highlight significant areas of emissions and wastage and therefore significant opportunities for optimisation and reduction. A typical office based business will emit more emissions from building energy consumption – from boiling the kettles to cooling the meeting room. While a logistics firm will contribute more significantly though the emissions associated with the transport aspects of their business.

3. How do we achieve a net zero business?

Reaching net zero requires a business to look at all aspects of its infrastructure and operations from energy supply (moving away from fossil fuels and onto renewables and other low carbon sources) through to reducing the energy demand of its day-to-day operations. A comprehensive energy and carbon optimisation programme measures where a business is now and that provides visibility and understanding of the current “gap” where opportunities need to be identified and action taken to reduce emissions. This information can then be used to develop the pathway and journey to achieve a net zero future.

Net zero pocket guide

Net Zero Guide for Business

Our pocket guide outlines the BiU roadmap to net zero, and gives you a bite-size introduction to net zero and emission reductions. Request your copy today by entering your details below.




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