To mitigate the negative effects of energy transition and emission reduction, businesses must take strategic and proactive action. A report by McKinsey addressed this, stating, “Many of these adjustments can be best supported through coordinated action involving governments, businesses, and enabling institutions, and by extending planning and investment horizons.”
Let’s examine what corporations need to do to prepare for a net-zero world.
Why Are Net-Zero Targets Emerging and Why Are They Important?
Beginning with the Paris Climate Accord of 2016, global leaders started to work together to create systems that would lower greenhouse gas emissions, hoping to stave off some of the most severe effects of climate change.
The impact of climate change is already being felt throughout the world as weather events intensify. In the United States alone, 2022 saw 18 separate climate-related disasters totaling more than $165 billion in damages.
This follows a pattern that has been emerging, with five of the past six years resulting in climate and weather-related damages topping an annual amount of $100 billion.
The industries and communities affected by these events are already paying the price for climate change. The net-zero targets are designed to reduce the human and financial suffering brought on by these events.
How Do I Meet Investor Expectations to Hit Net-Zero Emissions?
The good news is that investors are on board with investing in companies that prioritize addressing environmental concerns. Making the necessary changes in how your business operates to ensure you meet net-zero emission targets might seem like a monumental undertaking, but it really comes down to creating a process backed by science.
Commit to the science
Before you can make any significant changes within your organization, you must first gain buy-in from your C-suite leadership.
An excellent way to do this is to present science-based targets. These help your organization work toward realistic goals in a timely manner. Developed by the UN, science-based targets (SBTs) are grounded in decades of research, updated through ongoing research, and clearly define how much and how quickly companies need to manage their emissions to support the global prevention of further climate change.
Learn more: The Business Case for Science-Based Targets
Conduct an assessment
The process of determining what your SBTs should be involves a review of your current business facilities, practices, and suppliers. This process is best done in partnership with environmental services professionals who can offer guidance to make the data collection more complete and efficient.
Create an action plan
The data collected will then be used to create a baseline from which targets and timelines can be extrapolated.
We recommend using this opportunity to address topic-specific goals:
- Maintain: What is your organization already doing well that should be maintained?
- Improve: What are the areas that need to be improved upon?
- Optimize: Where are there opportunities for your organization to become a leader in net-zero optimization?
Addressing the successes and challenges your organization faces in a structured and forward-looking manner will make implementing change easier to do in phases.
Start taking action
The commitment to net zero requires real change. Real change can take time. While you put things in motion to address larger-scale concerns, an easy way to start moving your organization toward net-zero emissions is to work on greening up your campus. This is also a great way to get your workforce involved in sustainability.
Learn more: 7 Steps to Develop and Implement an ESG Strategy
Involve your marketing team
Taking real action toward meeting net-zero targets is something your organization should celebrate. Stakeholders may be privy to more internal information than the general public. Still, being vocal about the real progress you’re making will raise your profile and may even attract new investors.
Net-Zero Is the Future
Across the world leaders in government and industry are partnering to achieve net-zero targets. Now is the time to be a leader in your sector by taking direct action to reduce your organization’s greenhouse gas emissions.
