Global emissions and the need to end them have exposed businesses to a number of new physical, regulatory, and market-based risks. For companies around the world, reaching net zero is quickly becoming imperative. In just over two years, the share of publicly listed companies with net zero targets has more than doubled.

Those who haven't set targets should embrace the many opportunities of a net zero journey, including a better corporate reputation, stakeholder relationships, and resilience in the face of global warming and evolving regulatory standards.

But net zero has become so interchangeable with other climate action jargon that it's important to take stock of what it really means and what it takes for businesses to meet net zero pledges.

Download the complete guide that details four key steps every company can take to achieve net zero. 

Definition: What is net zero?

Net zero means causing no overall increase in greenhouse gasses (GHGs) in the atmosphere and, therefore, not contributing to climate change.

Net means on balance, overall, or, in this context, considering the balance between GHGs fluxes into and out of the atmosphere.

Zero here simply means zero emissions of GHGs.

To reach net zero as a worldwide society, we would have to experience no overall increase in greenhouse gas emissions. In practice, this means very few actual emissions (<10% of current emissions) and investment in carbon removal technology to effectively ‘neutralize' those that remain.

From a corporate perspective, the definition is much the same. The SBTi defines net zero as reducing scope 1, 2, and 3 anthropogenic emissions to zero and permanently neutralizing residual emissions at the net zero target year and beyond (through carbon removals).

Why is net zero important?

According to leading climate scientists at the IPCC, achieving net zero by mid-century is crucial to limiting global warming to 1.5°C and mitigating the catastrophic effects of climate change.

For corporations, the benefits of net zero go beyond a stable planet. Climate commitments improve corporate reputation and stakeholder relationships; improve talent attraction, engagement, and retention; and improve resilience to prepare for exposure to the physical and transition-related risks of climate change.

Proactive leaders and stakeholders know that the next few decades will look dramatically different from decades past. The opportunities are clear, but the risks of inaction also loom large. From supply chain disruptions to reduced capital availability, reputational damage, and plummeting asset values, continuing with ‘business-as-usual' is a losing strategy.

How is net zero different from carbon neutral?

Net zero and carbon neutral are different, though both help reduce carbon emissions and lower global temperatures. Here's a quick definition of each term:

• Net zero: As mentioned above, net zero is when global GHG emissions are no longer released into the atmosphere. (Or, the very few that are released are "neutralized" via technology.)
• Carbon neutral: Carbon neutral is when carbon dioxide, methane, and other GHGs caused by companies are offset via carbon credits. This emissions reduction strategy is a first step towards reaching net zero emissions and will help limit warming of our planet.

5 Steps to meet your net zero emissions commitments

So, how do you actually reduce emissions, hit the science based targets above, and achieve net zero? It won't be easy, but the five-step process below will guide you on the journey.

1. Assess your emissions sources

How does your company produce greenhouse gases?

It could produce them by burning fossil fuels to power a fleet of trucks. Or via chemical reactions that happen inside your warehouses or factories. Or persistent leaks from industrial equipment.

Whatever the case may be, you need to identify ongoing emissions (including the indirect emissions you might not have as much control over) so that you can eliminate them. This is the first step in an effective net zero campaign.

2. Set net zero targets to work towards

Now that you understand your own emissions, you can set net zero goals that align with science-backed climate targets. For example, you might aim to be carbon neutral by 2026, cut emissions by 70% by 2028, and be net zero by 2030. You might even try to be net negative after that.

Note, it's important to set interim targets. You might not hit net zero next year. But can you commit to removing emissions by a specific percentage? Smaller goals like this will keep your company on track to reaching net zero, while helping to limit temperature increase in the process.

3. Implement proven net zero strategies

It's time to take action. How can your company limit GHG emissions?

You could invest in renewable energy sources and phase out fossil fuels. You could purchase carbon capture technology for your factories and processing plants. You could even commit to sustainable development best practices when building new structures*.

It really depends on your specific business and the carbon dioxide, methane, etc. it releases into the atmosphere. Identify the culprits and eliminate them to help create a better global climate system.

*Yes, it will cost your business money to implement these net zero strategies. But publicizing your important work in this area could attract new customers and increase annual revenue. We'll talk more about this shortly.

4. Counteract residual emissions via carbon offsets

You're on your way to net zero emissions. To minimize the impact your greenhouse gases have in the short term, invest in carbon credits, sometimes referred to as carbon offsets.

(FYI you might have to invest in these after you reach net zero as well. Remember, net zero is less than 10% of current emissions. You'll still need to do something about residuals.)

If you're unfamiliar with the term, a carbon credit represents one tonne of captured or avoided CO2 or equivalent greenhouse gas. Climate projects produce these credits in various ways: planting forests, restoring wetlands, developing technology to reduce or remove carbon emissions, etc.

Sylvera makes it easy to invest in carbon credits. Our platform gives you detailed information about carbon projects, so you know which ones to support. We also help facilitate the purchasing process via our integration partners and enable real-time monitoring of credit performance. Book a demo of Sylvera today to learn more about our industry-leading solution.

5. Communicate your climate actions and performance

Finally, tell the world about your efforts to reduce emissions and reach net zero by your chosen date. Then post regular updates to share your progress in this area.

For example, did you recently invest in technology with a better energy efficiency rating? Or switch to biofuel instead of fossil fuel? Or financially support a reforestation project in Brazil?

Publicize these things. Doing so could strengthen your company's relationship with current customers who care about climate issues. It might introduce your brand to new customers as well, who want to support businesses that take global warming seriously. In both scenarios, your commitment to achieving net zero will improve your organization—but only if your climate efforts are made known.

Join the fight and make your net zero commitments!

For specific industries, the fight against global warming is already underway.

Nationally determined contributions (AKA commitments countries make to reduce GHGs) might have made federal, state, and local governments institute new regulations that force your business to offset emissions via the carbon market—or even work towards full net zero emissions.

For other companies, the fight is just beginning. Whatever situation you find yourself in, we encourage you to take global warming seriously. The world needs to hold global temperatures below two degrees celsius above pre industrial levels, as stated in the Paris Agreement. It also needs to hit net zero by 2050. If these things don't happen, scientists predict catastrophic results.

Sylvera is here to help. Our platform will help you invest in the highest quality carbon projects and credits, then monitor them for performance. That way you can do your part to limit warming. Book a demo of Sylvera today to see how our platform can strengthen your net zero journey.