The Net Zero Conference
As COP27, the international climate change conference hosted by the United Nations convenes in Egypt this week, leaders from every country and industry are asking for a status update on our global progress against global warming.
The term Net Zero will be used repeatedly over the coming week just as it has come to lead the public dialogue around climate change action, particularly relating to what each company is doing to reach their Net Zero goals.
While Net Zero goals vary in timeframes and implementation methods, it is a target measuring a company’s ability to reduce greenhouse gas emissions to zero. Greenhouse gases like Carbon Dioxide and Methane are gases in the earth’s air that trap heat in our atmosphere and are the cause of global warming. While these gases are naturally produced, human activities, especially commercial activities are responsible for almost all the increase in greenhouse gases in the atmosphere.
Net Zero goals are widely pegged to two years in the future, the years 2030 and 2050. According to the Science Based Targets Initiative (SBTi), companies should set both near-term (2030) and long-term (2050) science-based targets across their entire value chain. In sustainability terms, this is known as including Scope 1, 2, and 3 emissions into a company’s net zero goals. For Scope 1, companies disclose greenhouse gas emissions produced by their key business operations and any emissions occurring from sources the company owns or controls. Scope 2 emissions are any indirect effects from the generation of electricity, steam, heat, or cooling used by the company. The third scope requires quantifying the carbon footprint that occurs throughout a company’s value chain including employee travel and purchased goods. The recommended process for setting Net Zero goals according to SBTi is to reduce emissions by 50% before 2030 and reach long-term emission cuts of 90-95% before 2050.
The urgency for setting these near and long-term targets is largely based off the Paris Agreement that details the urgency for emissions closely aligning with SBTi’s to be reduced by 45% by 2030 and reach net zero by 2050. The Paris Agreement, signed by 193 countries specifically calls for “holding the increase in the global average temperature to well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels”. A shortfall of the Paris Agreement is the accord’s gap in identifying an exact year or time frame for the baseline ‘pre-industrial levels’ to measure from. We will explore what the pre-industrial time frame refers to in the future, but various studies have set the reference period ranging from 1700 to 1820 based on the introduction of the steam engine in 1784.
The global challenge of reaching temperature milestones to significantly reduce the impacts of climate change will require companies around the world to galvanize around how to properly set and exceed their individual Net Zero goals. Engaging in climate action dialogue relating to policy improvements and commercial innovations will play a key role in our ability to meet this global challenge.
Companies that have developed public-private partnerships are exceedingly more prepared to meet their Net Zero and sustainability goals. At Philanthrofi, we are in the business of scaling public-private partnerships to to address our world's most challenging issues. If you are part of a company this is looking to bolster your ESG initiatives all while progressing the United Nations Sustainable Development Goals, tap here to continue the conversation.
