Introduction
Achieving net zero means reducing carbon emissions to a level where any remaining emissions can be absorbed and permanently stored by natural processes and other carbon removal measures. This results in a net balance of zero emissions in the atmosphere. To maintain a livable planet, the global temperature rise must be limited to 1.5°C above pre-industrial levels, as outlined in the Paris Agreement. This goal represents one of the greatest challenges of our time, requiring a transformation in how we produce, consume, and move about—a collective global effort.
Tracking Net-Zero Progress: Who's on Board?
To keep global warming below 1.5°C, emissions need to be reduced by 45% by 2030 and reach net zero by 2050. In support of this commitment, over 9,000 companies, 1,000 cities, 1,000 educational institutions, and 600 financial institutions have joined the Race to Zero, pledging immediate and rigorous action to halve global emissions by 2030. Initiatives like Race to Zero and Race to Resilience are instrumental in aligning non-Party stakeholders with ambitious shared goals.
The European Commission’s Net-Zero Industry Act, part of the Green Deal Industrial Plan, aims to scale up the manufacturing of clean technologies in the EU. This Act focuses on technologies that significantly contribute to decarbonization, supporting strategic net-zero technologies that are commercially available and scalable.
The Science Based Targets initiative (SBTi) has developed a Corporate Net-Zero Standard, serving as a guiding framework for companies. It provides a consistent and robust approach for setting net-zero targets aligned with climate science. Currently, 9,057 companies are engaged, with 5,791 having approved targets and 2,796 in the process of validation within 24 months.
Decoding Net Zero: Understanding the Challenges
The definition of net zero has been interpreted in various ways, posing a challenge for companies. The SBTi’s Corporate Net-Zero Standard helps align businesses with science-based net-zero targets. Let's explore the challenges companies face on this path.
Main Challenges for Businesses
1. Integrating Sustainability Standards into Business Strategy
Embedding sustainability into the core business is crucial. Aligning sustainability targets with business goals presents both a challenge and an opportunity.
2. Investment in New Equipment and Renewable Sources
Transitioning to Net Zero may require significant investments. Integrating IT and sustainability is key to facilitating decision-making and focusing on long-term benefits. Partnerships and government incentives are crucial enablers.
3. Supply Chain Management
Reducing emissions along the value chain is complex. Collecting quality data from suppliers and ensuring transparency is challenging without the right tools. Achieving net zero means addressing emissions in Scope 1, 2, and 3. Setting supplier requirements and using traceability tools can simplify this process.
4. Reporting and Transparency
Data collection, analysis, and storage are essential for tracking progress and showcasing commitment. Initiatives like GRI, TNFD and ESRS guide this process, and investing in IT tools can streamline it. Choosing the right tools ensures compliance with auditability and traceability standards.Innovation inherently involves risk. However, the Art of Probable minimizes risk by emphasizing data-driven decision-making and iterative prototyping. By testing assumptions early and often, organizations can avoid costly missteps and ensure their solutions are aligned with customer needs and market demands. This focus on validation ultimately leads to a higher return on investment (ROI).
How msg global solutions can support your Net-Zero success?
Given the challenges of achieving net zero, expert support is crucial. msg global solutions offers expertise and tools to simplify this journey, from guiding regulatory steps to implementing data management, analysis, and reporting tools that help set targets and take action toward net-zero objectives.
Choosing msg global solutions means partnering with a dedicated team that is passionate about driving sustainable change. We understand the intricacies involved and are committed to guiding businesses toward sustainable transformation. Our sustainability team is equipped with knowledge, experience, and technologies to support organizations in this critical transition.
If you are looking for guidance in designing a Net Zero strategy and need support in defining KPIs or collecting necessary data now is the time to take action! Let us help you on this journey!
