5 Common Pitfalls To Avoid When Committing to Net-Zero
“The recent avalanche of net-zero pledges by businesses, investors, cities and regions will be vital to keep 1.5°C alive and to build towards a safe and healthy planet, but only if all pledges have transparent plans, robust near-term action, and are implemented in full.” - Catherine McKenna, former Canadian environment minister
Net-zero, carbon neutral, climate positive - these terms are buzzing all around us at the moment with a growing number of cities, countries, and businesses making climate pledges to reduce their carbon emissions. It almost seems as if there’s no company left that hasn’t yet made a “net-zero by xxx” claim to some extent.
Of course, this is all great news and a step in the right direction! But in order to make a real change, those pledges also need to be matched by concrete action. Unfortunately, this does not seem to be the case yet for all businesses.
So if your business is currently in the run to make sustainability pledges, here are 5 common pitfalls that you should avoid when committing to net-zero:
#1 Setting a “net-zero by xxx” goal without concrete plans how to achieve that
One of the most common mistakes when committing to net-zero is that you make a claim to go net-zero without having a strategy in place on how to actually achieve that target. When failing to implement a holistic reduction strategy into your corporate strategy, even the best intentions are bound to fail, and will probably result in you not achieving your targets.
We cannot stress this enough how important the implementation of a reduction strategy as an integral part of your business is, as this will give you a clear roadmap that provides you guidance down the road.
Moreover, not getting everyone in your team onboard can also slow down your progress - everyone in your company ranging from senior management to every single employee needs to know about the decarbonisation strategy you’re following, so they can actively start contributing to the achievement of those targets. Don’t underestimate the power of providing all your employees with a concrete plan of your targets and what exact measures will be taken and when.
#2 You don’t walk the talk
This part is very closely related to the previous point. These days, numerous companies set themselves the goal to be net-zero, carbon neutral, or carbon positive by 2030, 2050, or 2060 - but many businesses don't actually start to implement any changes and simply go on with their business operations like they did before.
The NewClimate Institute in collaboration with Carbon Market Watch recently published the Corporate Climate Responsibility Monitor 2022 report that assessed the integrity and transparency of emission reduction targets of 25 major global companies. They found that all the 25 assessed companies made some kind of net-zero or carbon neutral target pledge. To look at a few examples, Amazon pledges to reach net-zero carbon by 2040, Ikea wants to be carbon positive by 2030, and Unilever net-zero by 2030 - and all of those targets would require a deep decarbonisation of the companies’ value and supply chain. Yet, the report discovered that only 3 of the 25 businesses (heads up: it was not the three mentioned above) actually committed to a deep decarbonisation of more than 90% of their value chain emissions in line with their net-zero targets, whereas half of the businesses did not even provide any specific reduction strategy on how to achieve their respective targets. For a number of organisations, the NewClimate Institute could not identify any substantial changes to their business operations, and they found that for certain businesses, such as Amazon, their pledges remain unsubstantiated.
So, don’t just talk and make claims to sound good in front of the press or your customers - show real action, and develop clear transition paths, so that everyone, including your employees, stakeholders and customers, knows where and when a certain implementation is to be expected. Moreover, you should regularly review and report on your progress. You can also show that you’re taking ambitious corporate climate action by setting science-based emission reduction targets through the SBTi.
#3 Using only offsetting to reach your goal
This one might be one of the biggest traps - you only rely on offsetting your carbon emissions, instead of enabling fundamental changes to your organisation and implementing a reduction strategy. While offsetting is a good way to compensate for already emitted carbon and an important step along your journey to net-zero, it should always go hand in hand with a clear reduction strategy on how to reduce emissions in the future.
Moreover, if you decide to offset your unavoidable emissions, always make sure to choose an accredited offset provider that carries out a due diligence process, and that the projects you’re choosing are certified by benchmark offsetting standards (e.g. Gold Standard, or Verified Carbon Standard). If you’d like to know a bit more detailed how to successfully offset your carbon emissions, you can find more information about it in one of our latest articles.
Looking back at the findings from the report in the previous point, one can notice that more than half of the 25 assessed major companies plan to mainly rely on carbon offsetting to reach their targets - but keep in mind that offsetting alone is not the answer to a decarbonisation of your business, and should always be the final step in your journey, since solemnly relying on it might also potentially lead to greenwashing accusations.
#4 Not taking into account your Scope 3 emissions
For many companies, whether they are active in the e-commerce, food and beverages, manufacturing, or any other industry, the main emissions hotspots can be found in Scope 3 - indirect GHG emissions that occur outside an organisation, e.g. in the supply chain, as well as during transport and distribution (by subcontractors), business travel, employee commuting, and waste.
Ignoring your Scope 3 emissions therefore implies that a substantial amount of emissions remains unaccounted for. Let’s take a look back at the 25 major companies that were assessed in the Climate Responsibility Monitor 2022. The report showed that the Scope 3 emissions of the 25 companies accounted on average for over three quarters (87%) of the total emissions produced by those businesses. Yet, only 8 of those companies actually demonstrated a plan to address those emissions to some extent, while the remaining ones showed no sign of doing so.
By not addressing their Scope 3 emissions, those businesses are missing out on the opportunity to exert real impact - and instead they mainly only act if legal requirements demand them to do so.
Or let’s take a look at another example - when looking at our footprint here at Planetly, you can see that most of our emissions stem from Scope 3. If we were to ignore those emissions, we would have the perfect exemplary footprint - but it would also mean that the majority of our emissions would remain in the dark and unaccounted for. That is why it is so important to look at all three Scopes, so you can measure your real impact and can create a reduction strategy that takes into account the actual scope of your carbon footprint.
#5 Using too many broad terms or making false claims
Terms such as carbon neutral, net-zero, green, or environmentally-friendly are increasingly popping up with a growing number of brands starting to use them. However, since a lot of those terms don’t have a clear definition, it can lead to confusion among consumers what those terms actually mean. While we constantly hear terms like carbon neutral etc, not every one of your customers might be necessarily familiar with the meaning of it - so always make sure to use clear and simple language, explain your targets rather more than less, check your claims and most importantly - don’t claim something that is false or that you cannot actually achieve. This will be misleading to consumers and could lead to damage to your brand reputation.
The European Commission is already starting to take action here with their new proposal to ban greenwashing and ensure that consumers have the information necessary to make environmentally-friendly buying choices. The new proposal suggests that
a) unsubstantiated and unclear sustainability claims (‘environmentally friendly', ‘eco' or ‘green') will be prohibited
b) environmental claims about a product can only be made when they concern the entire product, not only a specific aspect of the product and
c) voluntary sustainability labels need to be verified by third parties or public authorities.
This proposal is currently still in discussion, but these changes could be a first step towards a circular economy and a ban on greenwashing and misinformation of consumers. As a result, if you were a business making such unsubstantiated claims, this new proposal would make matters more difficult for you in the future, meaning it is better to not do them in the first place.
Committing to net-zero in your business is a great first step into the right direction. As long as you try to avoid the 5 pitfalls that we mentioned above, and keep in mind that claims should always be followed by concrete action, you’re already on the best way. If you’d like some more tips on how to best communicate corporate sustainability, you can also go check out our article.