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Walking the Talk
Racing to Zero, Part 1:
On Track, or Playing with Numbers?

Many companies say they’ve reached their net-zero goals, but is it really that easy? We can make the numbers look good, at least in the short-term; or we can strive for greater impacts — towards real zero and beyond. If we don’t take this challenge seriously today, we won’t be in business in ten years’ time.

COPs come and COPs go, but one constant remains: After the show is over, there’s much hard work still to be done. Yet, delivering net zero is deceptively easy — at least, arithmetically.

It’s entirely possible for companies to declare victory, with apparent ease, in meeting their net-zero goals — and to do so within impressively rapid time frames. No sooner are leading companies announcing their net-zero commitments, that they’re actually delivering the result: Bolt and EY have already declared; Nespresso and many others are set to follow. Even Salesforce announced it had reached net zero, this September.

If everyone follows these great examples, our work is complete: Humanity will manage to avoid the worst ravages of catastrophic climate change. With everything at stake if we fail, can it be that easy to achieve this increasingly ubiquitous climate action target? Are we really on track, or are we playing with numbers?

OK, here’s how we do it. Firstly, we might put in a ‘good shift’ and develop a good range of practical solutions — usually focused on quick wins, including efficiency and demand reduction, reducing waste, and switching to renewable energies — to reduce emissions by up to 50 percent. An impressive start, we’re already halfway there.

Or are we? Did we include everything we should? Or, were we tempted to get somewhat ‘creative’ in the types of emissions we included within our initial footprint exercise? Scope 3 (supply chain) emissions are often conspicuous by their absence, along with other aspects we might consider as harder to measure, or difficult to influence. A case of out of sight, out of mind?

Credibility gap

Mars CEO Grant Reid is rightly concerned that too many corporations are making net-zero promises that do not cover the full range of their emissions. He has called for a complete value chain approach — from supply chains right through to customers — arguing that where companies fail to fill the gaps in their net-zero commitments, they ‘will undermine their credibility, and even more importantly, the climate action movement.’

Reid is right: Credibility is at stake. Without complete value chain models and full transparency, we are leaving a gaping hole in our obligations to people and planet. And just because something is perceived as difficult to measure or influence, it doesn’t mean we shouldn’t try. Scope 3 emissions could be worth up to 80 percent of our total footprint, we should be using every tool in the box — and perhaps some new ones — to influence these emissions, rather than ignoring them.

By developing a comprehensive value chain perspective, not only are we more complete and accurate in recording emissions and scaling the real challenge, this broader level of visibility can also reveal a wider range of further opportunities and benefits. Adopting this approach, on our recent projects with eBay, we have developed strategies that potentially quadruple positive impacts, while delivering significant levels of new business — towards true decoupling.

Furthermore, if we are to develop comprehensive solutions to the net-zero challenge, we will ultimately find the need for effective collaborations, right through the value chain. Net zero and our wider sustainability challenges cannot be solved in isolation — taking a value chain perspective makes everything possible.

But, back to the numbers — there’s a further wrinkle we need to work on. Not only do we need complete transparency in measuring the various sources of our emissions, we also need equal clarity when projecting the precise impacts for each of our net-zero solutions. This means complete visibility on how specific initiatives might contribute towards a complete figure of emissions reduction. In many cases, communication around how solutions will deliver specific impacts is rather opaque. How does it really work? Do the numbers really stack up? We need credibility and confidence here, too.

Get out of jail?

OK, presuming our footprints and net-zero solutions are complete, accurate and transparent, up to this point: Then so far, so good. Right? In reality, this is where the going gets tougher. We now face the significant challenge of what to do about the remaining 50 percent of our emissions — the portion that is harder to get at, lying beyond the quick wins. For now, “offsetting” remains the instrument of choice.

Developing viable solutions for the next tranche of emissions reduction is widely perceived as difficult, so companies are resorting to offsetting — buying into schemes elsewhere to compensate for their own residual emissions — like never before. A rapidly growing field, the global market for offsetting could be worth $100 billion by the end of this decade. And, for sure, the financial markets will be happy to promote apparent solutions from which they can derive further profitable business.

Yet, offsetting remains a controversial practice — especially at scale. There are serious issues we need to address, not least with the efficacy of offsetting schemes as a viable solution. Of course, everyone is signed up to the best, gold-plated schemes, right? Except they can’t all be.

Rather shockingly, less than 5 percent of offsets actually remove CO2 from the atmosphere, according to research from the Taskforce on Scaling Voluntary Carbon Markets. By utilising ‘questionable’ offsets, companies are effectively playing a get-out-of-jail-free card, yet relying on an easy licence to keep on polluting. They’re also throwing good money away, which might be used more productively — for example, by reinvesting in decarbonising their own value chains. Meanwhile, offsetting is becoming so common, our board rooms are in danger of normalising the acceptance of this rather blunt instrument.

Furthermore, offsetting comes cheap — typically in the range of $75 to $2000+ per tonne of CO2e. There is very little in the way of financial incentives for companies to invest in real action towards deep decarbonisation when the price of offsetting is so low. Cheap, yes — but no guarantee of quality or impact.

Ultimately, offsetting can only offer a pragmatic expedient; it only buys time — and very little at that — while we work out what to do with the rest of our emissions, after the relatively straightforward work on efficiency and switching to renewables.

Even nature-based solutions, such as afforestation, can still be problematic — especially at the scale we are now starting to consider. A recent Oxfam report calculated the total land required for planned carbon removal could amount to five times the size of India, or the equivalent of all farmland on the planet. Expanding carbon sinks at scale will also have serious implications for land use, with many other competing demands — including food production. If used at scale, land-based carbon removal methods such as mass tree planting could see global food prices surging by 80 percent by 2050.

We need nature-based climate solutions but optimised within a balanced system. Quite simply, the world doesn’t have enough carrying capacity for all our offsetting projects and the continued allowances for polluting. The numbers just don’t stack up.

Setting the standards

Part of the problem, thus far, has been the lack of clear and consistent standards for how we measure and achieve net zero, but help is at hand. Towards the end of October, the Science-Based Targets initiative (SBTi) launched the first global framework for net-zero business — the Net-Zero Standard — seeking to bring much-needed clarity in this space.

Within the new Standard, there’s no room for greenwashing. Emissions-reduction targets must be in line with keeping the global temperature rise within 1.5°C by 2050 — incorporating robust measures to deliver deep decarbonisation targets of 90-95 percent across all scopes, with only a limited reliance on carbon offsets (no more than 5-10 percent). The new Standard appears to be much more rigorous than most current net-zero commitments.

While there is a desperate need for such standards, this should not detract from the need for serious innovation in developing real solutions. Reaching net zero is not primarily about compliance — fundamentally, it’s about reinvention. So, what else can we do to make a genuine impact?

Orca rocks!

Many businesses and governments are heavily reliant on new technologies to deliver their net-zero targets. Yet, such solutions, as we know, are still in their infancy; they’re expensive and lacking in impact at scale. Furthermore, they have the potential to distract us from the essential job of reducing emissions at source. The most sustainable tonne of CO2 is, after all, the one we don’t need to emit. Can we really afford to rely on capital-intensive workarounds?

That said, there is plenty of hope that emerging carbon-reduction technologies can add to the solutions mix. Orca, the world’s biggest carbon-suction machine, was switched on in September of this year and is expected to capture 4,000 tonnes of CO2 from the atmosphere every year, quietly mineralised within the rocks of Iceland.

Keeping this breakthrough in proportion, we might remember that we will need to sequester a total of 30 to 40 billion tonnes of CO2 annually. Based on current performance, this would mean developing and operating around 10 million Orca machines, dotted strategically around the planet. And, at a cost of more than $10 million for the first piece of kit, this solution doesn’t come cheap.

For sure, technology and cost-improvement curves will eventually kick in, but we might be dangerously complacent and profligate if we rely on technology alone to save the day. Perhaps, this is why carbon-capture technology solutions are not yet taken seriously enough within scientific discussions on climate action?

Given where are today, it’s clear that we need to do much more work within our net-zero strategies.

Curveball

Yet, there’s one further challenge we need to be mindful of. While there is so much energy and momentum behind net zero, we also have to consider: What if net zero is not enough?

In fact, the science is now calling for us to go further still, towards real zero and beyond. The Climate Crisis Advisory Group — an independent expert group advising governments on the climate and biodiversity crises — has warned of the gap between the Paris climate goals and the implications from the latest IPCC report. Basically, due to the lack of effective action over the last six years, we’re likely to exceed the Paris Agreement's 1.5°C warming threshold as soon as 2030, precipitating a new era of dangerous climate change.

Net zero is no longer enough; we have to become carbon negative — which means both reducing and removing greenhouse gases at the same time. It’s time to get ultra-practical — we need radical strategies that will deliver a major impact, today.

Silver bullet?

Given the scale of the challenge and the need to deliver increasingly bold targets, rather than incrementally diminishing returns, it is perhaps surprising that a circular economy appears to be strangely absent from so many climate-action strategies. Going circular can provide a major contribution, enabling up to 40-50 percent of our emissions-reduction targets.

Circularity could become an increasingly important strategy — arguably, our most powerful single instrument for delivering radical reductions in carbon emissions. Yet, why have so few businesses made this important connection?

In Part 2, we will explore the explore the virtuous link between radical climate action and a circular economy, including reference to data from our recent eCAP project with eBay.

Six key takeaways for your race to zero and beyond:

  1. We must account for all emissions, throughout the value chain — avoiding the urge towards creative accounting, at all costs.

  2. We must move rapidly beyond quick wins and develop a robust range of deep decarbonisation interventions, avoiding over-reliance on offsetting.

  3. We need integrity when accounting for impact contributions derived from specific solutions — transparency is vital for credibility of progress reporting.

  4. We also need a healthy dose of reality, not placing too much store in future technology fixes coming to the rescue — some might work, some will not; and some might not be as effective as desired.

  5. We must also align with more rigorous standards, such as those established by SBTi.

  6. The bottom line: We need to do much more heavy lifting, today; not at some ill-defined point, later on.

Ultimately, we can make the numbers look good, at least in the short-term; or we can keep it real — striving for a greater impact towards real zero and beyond. If we don’t take this challenge seriously today, we won’t be in business in ten years’ time.

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