Last year also saw the release of the UN’s Intergovernmental Panel on Climate Change (IPCC) report that articulated the sobering reality that to avoid the worst climate consequences, we have “a brief and rapidly closing window of opportunity to secure a livable and sustainable future for all.” The report makes two other key points: 1) the world has a finite carbon budget, the amount of carbon that can still safely be emitted into the atmosphere, and 2) many climate impacts are likely to be non-linear, meaning that earth’s natural systems are highly susceptible to rapid changes or ‘tipping points’ where systems flip into a different state. The overall climate takeaway from 2022 is that the world must achieve net zero carbon emissions by 2050, and that 2023 will be a year to actively engage in solutions to decarbonize our economy.
The Net Zero Transition
With companies currently responsible for about 70 percent of global carbon emissions, business leaders have an opportunity to drive meaningful action toward a sustainable net zero world. In the U.S., there are five key drivers moving companies to measure, manage, and reduce their greenhouse gas emissions:
- The Biden Administration's carbon emission reduction targets of 50 percent by 2030 and net zero by 2050,
- The Securities and Exchange Commission's proposed climate risk disclosure rule,
- Increased public and shareholder focus on Environment, Sustainability, and Governance (ESG),
- The global transition to net zero is already underway and represents the largest reallocation of capital in human history,
- Federal climate legislation, including the CHIPS Act, the Bipartisan Infrastructure Law, and the Inflation Reduction Act, that together make available over $750 billion in funding.
While many companies have made net zero emission pledges, the challenge then is to translate the pledge into a viable plan and then implement the plan.
Net Zero Strategies
Responding to this challenge, EBP has developed the Net Zero Strategies service to empower companies to achieve their net zero goals. The comprehensive service is designed to be modular and tailored to a company’s specific needs.
To actively manage climate risks, carbon emissions must first be quantified and categorized according to their ”scope”. Scope 1, or direct, emissions are those controlled directly by the company, such as company buildings and vehicles; Scope 2, or indirect, emissions are related primarily to purchases of electricity; while Scope 3 emissions are from all other activities from sources not owned by the company, such as emissions related to supply chains. After quantifying and categorizing carbon emissions through a greenhouse gas (GHG) inventory, the next step is to set a reduction target, such as through the Science Based Targets initiative. Then an emission reduction pathway is developed, including an action plan and timeline. Proposed actions are quantified in terms of implementation costs, cost savings, and carbon reductions. Then EBP can assist with implementation and monitoring, planning for compensation for unavoidable emissions, and communications around the net zero plan, based on company-specific needs and goals.
EBP takes a personal and consultative approach to helping companies develop their net zero strategy. We are 100% independent and use our technical expertise to focus on implementation. Our mission is to help companies successfully navigate their net zero journey, and our holistic solutions support the organization every step of the way.
Bold actions are needed to accelerate decarbonization at scale. Business leaders can actively manage climate risks for their organization, create value, and seize this once-in-a-lifetime opportunity to lead in the net zero transition. Leaders can quantify climate impacts and embed net zero as a core business principle and as a lens through which to make business decisions. It’s a win-win-win, for companies, for people, and for the planet. EBP looks forward to helping more companies plan and act on their net zero transition in 2023 to help decarbonize the economy, stabilize our climate, and achieve carbon neutrality by 2050.