Net Zero and Transitioning to Sustainability
As business leaders, some of us are starting to get our heads around Net Zero and Scope 1, 2 and 3 requirements. Some of us will be making progress with Life Cycle Analysis; perhaps also traceability of our products and services.
And others will be baffled by all the above.
So let’s start with a refresh of terminologies. Sustainability is about balancing the needs of turning a profit, with environmental impact and also with communities and culture. Those three elements are often referred to as the three pillars of sustainable development.
Net Zero is about creating zero impact by balancing the harm of creation of greenhouse gases against practices which actively absorb them. The term is often interchanged with Carbon Neutral or climate neutral but Net Zero is about eliminating carbon from your business footprint without having to mitigate against the harms and Net Zero isn’t just about Carbon Dioxide, it’s also looking at the other greenhouse gases, Methane. Nitrous Oxide and hydrofluorocarbons.
The top emitter countries are: China, USA, India, Russia and Japan
Top emitter industries are:
But it is important that all companies and all industries look at their impact and understand where their carbon footprint comes from.
This is where Scope 1, 2 and 3 come in.
Scope 1 emissions - This one covers the Green House Gas (GHG) emissions that a company makes directly — for example while making products and delivering goods.
Scope 2 emissions - These are the emissions it makes indirectly – like when the electricity or energy it buys for heating and cooling buildings, is being produced on its behalf.
Scope 3 emissions - These are the emissions associated, not with the company itself, but that the organisation is indirectly responsible for, up and down its value chain. For example, from buying products from its suppliers, and from its products when customers use them.
Scope 2 is probably the easiest to quantify and to adjust – you can change energy supplier to a renewables company, you can get upgrade the insulation in your building etc. Scope 1 is harder as that might involve major upgrades to manufacturing equipment or a new process created around green chemistry routes and there could be a need for re-certifying with regulators.
Scope 3 is the most challenging. It requires you to understand the full Lifecycle Analysis of your product or process and have full traceability of where your product has come from and the processes it has undergone. AND to look to the future of what will happen to it once it has left your control.
Understanding all this is vital for your business. Look to the future, observe that many large consumers like the NHS and governments are moving to require full understanding of Scope 1, 2 and eventually 3 information from all suppliers. Grant bodies in the UK and at EU Level are also taking all this with the utmost seriousness. Explaining how your company aligns with the 17 UN SDG (UN Sustainability Goals) is already part of grant applications, and a waffly answer about “working towards” imprecise measurables is not going to score as highly as applications with a clear plan, targets and achievements.
SSC would encourage all businesses to push themselves further than the Net Zero area and balancing the environmental impacts against profitability. We would ask you to challenge yourselves and your businesses to go further, faster towards real sustainability not greenwashing for PR purposes.
We believe it is to your advantage to take the foot off the profitability pedal and to think about what other values and growth indicators your company identifies with. What could you do for the benefit of your business if you didn’t have to beat last years profits? How would you invest that excess cash? In your team? In your community? In your products and services?
We believe that by moving faster to true sustainability you are positioning your company strongly for the future, being seen in the market as an ethical business that values its employees and its customers, that cares about the health and wellbeing of the businesses in its value and supply chain.
Change is coming, you can get ahead of the curve.
Let us know if we can help adjust your strategy and plans.
Author: Dr Cait Murray-Green, CEO, Strategic Scientific Consulting
