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With calls for a net zero economy by 2050, business action is critical. What steps are businesses taking to deliver action and impact now while policy makers continue their discussions?
This week we launched the 2019 version of The CarbonNeutral Protocol. The Protocol was first launched in 2002 and has, over the last 17 years, been used by businesses throughout the world as a framework for their carbon neutral action. But now more than ever, as the requirement to be a net zero economy by 2050 has taken centre stage, carbon neutrality is critical.
Explore The CarbonNeutral Protocol, a CarbonNeutral Quiz and videos about carbon neutrality here
It has been widely reported that the commitments to emission reductions made by countries under the Paris Agreement of 2015 leave a sizeable gap in where we need to get to. Business action can play a significant role in closing that gap and many businesses have already lead the way through their carbon neutral action. And, in the US, where federal commitment to emission reductions has diminished, we’ve seen how a coalition of cities, states, universities and corporates can step up to fill the void. Although the most recent climate change meeting in Poland (COP24) set a solid framework for how countries will report and increase their emission reduction efforts, time is tight to meet the 1.5 degree target so action now is crucial. Business, which has its own risks and opportunities from managing climate change, needs to lead.
In 2018 we conducted an extensive review of the application and impact of carbon neutrality in business. We convened 61 corporates, with revenues totaling over US$ 1.3 trillion, in seven events across the EU and the US, to explore how private sector commitments to net zero emissions will support higher ambition in the Paris Agreement.
We found that companies are increasingly using carbon neutrality to establish a price on carbon; to shift climate action from compliance or corporate responsibility responses to business strategy; and to earn the reputational benefits from delivering action and impact. To achieve these goals, successful carbon neutral strategies have focused on:
- Reducing emissions through investments in internal efficiency measures that reduce costs and align with targets informed by climate science
- Decarbonising consumed electricity and gas by direct production or purchase of renewable energy and the retirement of energy attribute certificates (EACs)
- Financing emission reduction projects which align with specific business objectives, driving low carbon sustainable development, building resilience in supply chains and delivering impact on the Sustainable Development Goals.
The CarbonNeutral Protocol follows this approach, setting the standards and criteria for companies to ensure their carbon neutral action is clear, transparent and of the highest quality. At its core is market-based carbon pricing which gives a high degree of flexibility in finding cost effective solutions to deliver immediate emission reductions. It ensures that the price of carbon paid by a company goes directly to projects and activities that make a positive impact.
The Intergovernmental Panel on Climate Change’s (IPCC) latest report, from October 2018, had a simple call to action: “the world needs to build a net zero economy by 2050”. Our discussions demonstrated that companies are using carbon neutral programmes to lead the way to that single most important goal. And importantly, they will not wait until 2050 to take action.