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How can companies achieve net-zero?

Lots of businesses, including large polluters such as United Airlines, BP, Nestlé, and Dell, have promised to decrease their carbon footprint and achieve net-zero emissions by 2050. These goals seem bold, but what does it take to get to net zero, and would it be enough to mitigate climate change?

What are “net zero emissions”?

The starting point for achieving net-zero emissions is as follows: a company defines and reviews all emission levels it is liable for, reduces those much as possible, and then invests in projects that either prevent emissions elsewhere or pull carbon out of the atmosphere to achieve a “net-zero” balance on paper. The procedure is complicated, and it is still mostly uncontrolled and unclear. As a result, businesses have a great deal of leeway in how they disclose their emissions. A global mining corporation, for example, would calculate emissions from digging and refining ore but not those from transporting it.

Companies may also choose how much they rely on offsets, which are initiatives that they can support to decrease emissions. Shell, for example, expects to achieve net-zero emissions by 2050 while continuing to produce large amounts of fossil fuel through that year and beyond. How? It plans to offset the majority of its fossil-fuel-related emissions by investing in large-scale carbon capture and storage initiatives, such as forest and ocean restoration.

Environmentalists may applaud this conservative objective, but then if major oil firms, airlines, shipping businesses, and the US administration all suggest the same solution? Will there be enough space and ways to counteract climate change, and is just recovering habitats without drastically changing the business-as-usual paradigm a viable solution?

Because transitioning to net zero is such a difficult process, many businesses believe it is impossible to achieve while retaining profit margins. Many companies respond by focusing on low-hanging fruit and short-term solutions, such as offloading emissions onto others by divesting high-carbon emitting businesses like mining minerals, processing meat, or financing oil companies, or by creating “islands of green” within their company, such as the sourcing all electricity from renewable sources. Businesses may find it useful to begin by concentrating on immediate carbon reductions. However, in the long run, it is insufficient. Using renewable energy sources to generate power is an excellent approach to minimizing CO2 emissions. However, based on estimates we’ve done across 12 regions and 22 industries, it’ll be less than a third of what’s needed to go to net zero. Companies will eventually have to rethink their business strategies to cut emissions.

To help companies prevent the most terrible impacts of climate change, many companies are undertaking a pledge to accomplish zero emissions by 2050. Factually, the percentage of companies announcing a net-zero target almost doubled from 2019 to 2020.

Relocation and reconfiguration of value chains

An essential element of a net-zero corporate strategy is a reduction in total emissions. However, this chase is not simple given that most corporations are part of global production and supply networks, many of which operate in such an opaque environment that even the identification of suppliers can be a tedious task, let alone forging supply-chain collaborations Even if suppliers could be traced and their cooperation secured, suppliers would often be unable to reduce their emissions simply because of their locations: many prominent offshore production areas, e.g., China, India, Taiwan, and countless others continue to rely heavily on energy produced from fossil fuel rather than renewable sources.

Net-zero business models

Innovations will be key for companies to improve their emissions: CEMEX, one of the largest cement producers, is leveraging new technologies to change some of its production processes and components. However, companies cannot achieve net-zero targets by simply adopting new processes. It won’t take time in attaining more eco-productivity as ecological profits from eco-economical methods are short-settled and are rapidly balanced by improved manufacturing and transactions.

Political and governance changes

Companies cannot achieve net-zero emissions targets on their own, hence systemic changes are required of critical importance in engaging small business partners and consumers in value-chains. About Ninety-nine percent of all firms in the world are small firms without fully bringing these small firms on board, corporate net-zero emissions will remain hollow promises. Inducements and funds are vitally important for developing new and affordable technologies.

Companies with net-zero target

Orange

Orange has made a bold commitment to attain net zero emissions by 2040 by following the Intergovernmental Panel on Climate Change’s guidelines. Between 2015 and 2025, they want to cut emissions by 30%. To meet their objective, they intend to have 50 percent renewable energy in their electric source mix by 2025. Furthermore, they have already been able to lower their carbon emissions by 35% in the last ten years. They have shifted to 2,540 hybrid and electric automobiles in their workforce to cut CO2 emissions by 34% because buildings and transportation consume 20% of their energy. They may also minimize carbon emissions by 25% through video conferencing with other Orange facilities. Furthermore, Orange participates in various scientific programs to improve the world, such as Orange Marine, a collaboration with Euro-Argo for ocean climate protection, and their collaboration with the NGO CREA Mont-Blanc, which attempts to protect Alpine ecosystems caused by climate change and human environmental impact, for environmental monitoring and data collection.

 

  • Ford

Ford, the world’s third-largest carmaker, has joined the contest to achieve net zero carbon emissions by 2050. They have begun a scientific study to reduce emissions in scopes 1, 2, and 3. They also aim to invest $11.5 billion in 2022 to make some cars electric, such as the Mustang Mach-E and the F-150, and to provide locally-sourced renewable energy to every factory by 2035. “To meet this objective, Ford will concentrate on 3 sectors that account for about 95 percent of its CO2 emissions – vehicle usage, supplier base, and group’s infrastructure,” according to Ford.

 

  • Hon Hai

Hon Hai, the world’s biggest electronics manufacturer, had already set a target of being net zero by 2050, in line with the Climate Action 100+ Steering Committee goals of “strengthening climate change governance, taking any action further towards the group’s greenhouse gas (GHG) emissions all across the value chain, and providing disclosure of information in full compliance with the Climate-Related Financial Disclosure Recommendations (TCFD).”

This seems to be noteworthy since they are active across the whole value chain and are suppliers to Amazon, Apple, and PlayStation, to mention a few of their well-known global clientele.

 

  • Siemens AG

The multinational corporation focuses on intelligent infrastructure for buildings and decentralized energy systems, as well as automation and digitalization in the process and manufacturing sectors and smart mobility solutions for rail and road transportation. Siemens plans to save €20 million per year by investing in new technologies such as energy management and automation systems for buildings and industrial processes, as well as energy-efficient drive systems for manufacturing.

Siemens is now working on several businesses, community, and resource programs to achieve a net zero target in the next 10 years. They are leading the way in the energy sector to net-zero and hope to become a paradigm in what can be done by everyone to make a significant difference through their Energy Efficiency Program, which assists clients who responsibly do their bit to maximize building sustainability.

Furthermore, Princeton’s Siemens Advanced Microgrid Research and Demonstration Lab is a carbon-neutral research campus that runs on microgrids that have been placed throughout the world for various universities to produce inexpensive and accessible on-site electricity.

 

Lots of businesses, including large polluters such as United Airlines, BP, Nestlé, and Dell, have promised to decrease their carbon footprint and achieve net-zero emissions by 2050. These goals seem bold, but what does it take to get to net zero, and would it be enough to mitigate climate change?

What are “net zero emissions”?

The starting point for achieving net-zero emissions is as follows: a company defines and reviews all emission levels it is liable for, reduces those much as possible, and then invests in projects that either prevent emissions elsewhere or pull carbon out of the atmosphere to achieve a “net-zero” balance on paper. The procedure is complicated, and it is still mostly uncontrolled and unclear. As a result, businesses have a great deal of leeway in how they disclose their emissions. A global mining corporation, for example, would calculate emissions from digging and refining ore but not those from transporting it.

Companies may also choose how much they rely on offsets, which are initiatives that they can support to decrease emissions. Shell, for example, expects to achieve net-zero emissions by 2050 while continuing to produce large amounts of fossil fuel through that year and beyond. How? It plans to offset the majority of its fossil-fuel-related emissions by investing in large-scale carbon capture and storage initiatives, such as forest and ocean restoration.

Environmentalists may applaud this conservative objective, but then if major oil firms, airlines, shipping businesses, and the US administration all suggest the same solution? Will there be enough space and ways to counteract climate change, and is just recovering habitats without drastically changing the business-as-usual paradigm a viable solution?

Because transitioning to net zero is such a difficult process, many businesses believe it is impossible to achieve while retaining profit margins. Many companies respond by focusing on low-hanging fruit and short-term solutions, such as offloading emissions onto others by divesting high-carbon emitting businesses like mining minerals, processing meat, or financing oil companies, or by creating “islands of green” within their company, such as the sourcing all electricity from renewable sources. Businesses may find it useful to begin by concentrating on immediate carbon reductions. However, in the long run, it is insufficient. Using renewable energy sources to generate power is an excellent approach to minimizing CO2 emissions. However, based on estimates we’ve done across 12 regions and 22 industries, it’ll be less than a third of what’s needed to go to net zero. Companies will eventually have to rethink their business strategies to cut emissions.

To help companies prevent the most terrible impacts of climate change, many companies are undertaking a pledge to accomplish zero emissions by 2050. Factually, the percentage of companies announcing a net-zero target almost doubled from 2019 to 2020.

Relocation and reconfiguration of value chains

An essential element of a net-zero corporate strategy is a reduction in total emissions. However, this chase is not simple given that most corporations are part of global production and supply networks, many of which operate in such an opaque environment that even the identification of suppliers can be a tedious task, let alone forging supply-chain collaborations Even if suppliers could be traced and their cooperation secured, suppliers would often be unable to reduce their emissions simply because of their locations: many prominent offshore production areas, e.g., China, India, Taiwan, and countless others continue to rely heavily on energy produced from fossil fuel rather than renewable sources.

Net-zero business models

Innovations will be key for companies to improve their emissions: CEMEX, one of the largest cement producers, is leveraging new technologies to change some of its production processes and components. However, companies cannot achieve net-zero targets by simply adopting new processes. It won’t take time in attaining more eco-productivity as ecological profits from eco-economical methods are short-settled and are rapidly balanced by improved manufacturing and transactions.

Political and governance changes

Companies cannot achieve net-zero emissions targets on their own, hence systemic changes are required of critical importance in engaging small business partners and consumers in value-chains. About Ninety-nine percent of all firms in the world are small firms without fully bringing these small firms on board, corporate net-zero emissions will remain hollow promises. Inducements and funds are vitally important for developing new and affordable technologies.

Companies with net-zero target

Orange

Orange has made a bold commitment to attain net zero emissions by 2040 by following the Intergovernmental Panel on Climate Change’s guidelines. Between 2015 and 2025, they want to cut emissions by 30%. To meet their objective, they intend to have 50 percent renewable energy in their electric source mix by 2025. Furthermore, they have already been able to lower their carbon emissions by 35% in the last ten years. They have shifted to 2,540 hybrid and electric automobiles in their workforce to cut CO2 emissions by 34% because buildings and transportation consume 20% of their energy. They may also minimize carbon emissions by 25% through video conferencing with other Orange facilities. Furthermore, Orange participates in various scientific programs to improve the world, such as Orange Marine, a collaboration with Euro-Argo for ocean climate protection, and their collaboration with the NGO CREA Mont-Blanc, which attempts to protect Alpine ecosystems caused by climate change and human environmental impact, for environmental monitoring and data collection.

 

  • Ford

Ford, the world’s third-largest carmaker, has joined the contest to achieve net zero carbon emissions by 2050. They have begun a scientific study to reduce emissions in scopes 1, 2, and 3. They also aim to invest $11.5 billion in 2022 to make some cars electric, such as the Mustang Mach-E and the F-150, and to provide locally-sourced renewable energy to every factory by 2035. “To meet this objective, Ford will concentrate on 3 sectors that account for about 95 percent of its CO2 emissions – vehicle usage, supplier base, and group’s infrastructure,” according to Ford.

 

  • Hon Hai

Hon Hai, the world’s biggest electronics manufacturer, had already set a target of being net zero by 2050, in line with the Climate Action 100+ Steering Committee goals of “strengthening climate change governance, taking any action further towards the group’s greenhouse gas (GHG) emissions all across the value chain, and providing disclosure of information in full compliance with the Climate-Related Financial Disclosure Recommendations (TCFD).”

This seems to be noteworthy since they are active across the whole value chain and are suppliers to Amazon, Apple, and PlayStation, to mention a few of their well-known global clientele.

 

  • Siemens AG

The multinational corporation focuses on intelligent infrastructure for buildings and decentralized energy systems, as well as automation and digitalization in the process and manufacturing sectors and smart mobility solutions for rail and road transportation. Siemens plans to save €20 million per year by investing in new technologies such as energy management and automation systems for buildings and industrial processes, as well as energy-efficient drive systems for manufacturing.

Siemens is now working on several businesses, community, and resource programs to achieve a net zero target in the next 10 years. They are leading the way in the energy sector to net-zero and hope to become a paradigm in what can be done by everyone to make a significant difference through their Energy Efficiency Program, which assists clients who responsibly do their bit to maximize building sustainability.

Furthermore, Princeton’s Siemens Advanced Microgrid Research and Demonstration Lab is a carbon-neutral research campus that runs on microgrids that have been placed throughout the world for various universities to produce inexpensive and accessible on-site electricity.

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