Some of the biggest companies in the world, including AstraZeneca, HP, and Salesforce, have made net zero pledges, encouraging others to do the same. They’ve adopted the deep-decarbonization route that tackles climate change.
Antonio Guterres, the UN Secretary-General, warned us back in 2021 that we need “inclusive and green economies”. If nothing is done to cut back on greenhouse gas emissions, we face grave environmental consequences.
Therefore, net-zero emission is a fantastic goal for companies to set. Businesses are afraid of the transition to net zero, but it’s important to keep in mind that this is the only chance to avoid the climate apocalypse.
What Does The Net Zero Pledge Mean?
To put it simply, the pledge to net-zero is a worldwide commitment, which requires science-based objectives from the parties who sign the agreement to address greenhouse gas emissions within their organizations.
To preserve a liveable planet, the global temperature increase needs to be limited to 1.5°C above pre-industrial levels. Net-zero is the internationally agreed-upon goal for limiting global warming and its related effects. A company has to identify and report the emissions it produces and reduce them as much as possible. If it still has emissions and has exhausted all other options, the company has to do its best to reach a net-zero balance on paper.
There’s a lot of talk about green growth, clean technologies, and balancing profit with purpose. Regrettably, not all businesses embrace sustainability. They either don’t know what to do or lack the necessary tools and resources to become sustainable.
Companies can reach net-zero emissions, but they have to make drastic changes in the way they operate their businesses. Organizations have to take steps toward making fundamental changes in their value chains, political engagement, and governance structures. Tackling climate change requires investment, ingenuity, and cooperation.
The Net Zero Surge Is The Biggest Commercial Opportunity To Try In 2022
UK companies are well-placed to adjust and benefit from a net-zero transition. It might very well be the biggest commercial opportunity of our times. Seizing this opportunity requires scaling existing activities, building strategic partnerships, and findings routes to access new markets.
A McKinsey article of October 21, 2021, pointed out that “many UK firms could use decarbonization as a spur to reduce their costs, increase their revenues, optimize their capital structure—or all three.” The point is that it’s possible to create value from the net-zero transition, even if it presents enormous challenges.
Three main opportunities emerge for the corporate sector, as follows:
Cutting Costs By Cutting Business Carbon Emissions
Reducing costs brings about an increase in revenue. Taking action on climate change offers the opportunity to save costs. Measuring your carbon footprint helps identify ways of reducing consumption and, therefore, costs.
Let’s take an example. A commercial baler machine can be placed inside the business. Miltek waste balers help organizations save on labor by reducing employment costs associated with waste management. It’s an opportunity that applies to businesses in lean manufacturing, auto repair, and hotels and restaurants, to name a few. Excess waste leads to rising carbon emissions via increased track pick-ups.
Supplying Goods And Services For The Green Energy Revolution
Green goods and services are paramount when it comes to achieving smart, sustainable growth. Sustainable products help save energy, are free of toxic compounds, are made of recycled or reused materials, and are durable and easily repaired, not to mention that they minimize the environmental impact.
Green services, on the other hand, benefit the sustainability of the planet and conserve natural resources. B2B companies in sectors such as information, communication, or financial services can take advantage of the underused opportunity. Manufacturing and construction businesses can also benefit.
Supporting A Reduction In Customers’ And Suppliers’ Emissions
OVO Energy, the leading independent energy retail company in the UK, has come up with smart charging solutions for their customers with EVs. They now know the best time to charge their electric cars. Businesses in sectors such as manufacturing (food, apparel, and other consumer goods) can play a key role in helping customers build sustainable habits.
There’s no better time than now to take action. Food companies, for example, can meet the demand for sustainability by sourcing local, organic, fair-trade ingredients, using less packaging, and producing more plant-forward products. Also, they need a comprehensive understanding of the sustainability impacts of their supply chains.
The Path To Net Zero Is Different For Each Type Of Company
Everyone can agree with the fact that net-zero is more than a fad. It’s here to stay. At a time of climate emergency, it’s crucial to achieve net-zero emissions. The path to net-zero is narrow, and it implies:
- Tackling value chain emissions
- Neutralizing all future residual emissions
Needless to say, not all companies start from the same place when embarking on the sustainability journey. They adopt sustainable development strategies appropriate for the category they belong to. Even if the policy environment is becoming more supportive, enterprises still seek out partners, such as suppliers, distributors, and affiliate organizations, to gain understanding and specific data.
The net-zero transition has far-reaching economic and social implications. It’s best to assume the transition, even if it’s going to be chaotic. Taking into account the scale of the technological, economic, and societal changes needed for deep decarbonization, an orderly transition is improbable. Business leaders should change their mindsets to see this problem as an opportunity.
Climate change is reshaping the operating environment for businesses, creating opportunities for firms willing to innovate. Visionary entrepreneurs know how to transform their businesses to become part of the net-zero tomorrow.
Challenges facing companies to improve their sustainability performance are common around the world. Many businesses have not yet pledged net-zero out of fear of failure. Time is running, so we should all get going. There will be many challenges along the way, so it’s necessary to be bold and versatile in the face of difficulty.