By Duncan Wigney, Former Executive Vice President at CB&I
The 2015 Paris Climate Agreement, (also known as COP 21) was signed by 197 countries and came into force in November 2016. The agreement was limits greenhouse gas emissions with the aim of limiting global temperatures rise to significantly less than 2°C above pre-industrial revolution levels. Subsequent work by the Intergovernmental Panel on Climate Change (IPCC) published in 2018 identified that:
In 2019 the UK government passed legislation in an amendment to the Climate Change Act, committing the UK to achieve net zero by 2050.
So getting to Net Zero is important, but also the timescale in which we achieve this goal is equally important.
So what does Net Zero mean?
Net zero simply means achieving a balance between greenhouse gas emissions produced and those removed from the atmosphere. The UK government defines it as follows:
Net zero means that the UK’s total greenhouse gas (GHG) emissions would be equal to or less than the emissions the UK removed from the environment.
Compared with the current situation this can be achieved through:
All well and good on a national level, but what does it mean for an individual business? Not many companies are going to instigate their own carbon capture capability and other mechanisms for offsetting your emissions can be hard to fathom. Every day brings a new announcement of a net zero target by a large organisation but there is still no universally agreed definition. That can make it difficult and confusing on where and how to start. A number of organisations such as the Carbon Trust and Science Based Targets are working towards a standard definition but it is still a work in progress. That said, there two common themes applicable to companies of any size:
1. Emissions reduction is better than offsetting
2. Time matters. The sooner you start, the better.
In terms of emissions reductions the first step is to establish a benchmark – what you are doing at the moment. The good news here is that there is a generally agreed framework for emissions categorisation.
In the UK the Streamlined Energy & Carbon Reporting (SECR) regulations introduced in April 2019 require large companies to report on Scope One and Scope Two emissions. For these purposes a “large” company is defined as: meeting two of the following three conditions:
Whilst is easy to get hung up on definitions and getting it right, and tempting to take the view that the legislation doesn’t apply to me, you can be certain of two things:
Net zero definitions might be unclear and the UK legislation might not apply to your business, but it still makes sense to start monitoring your Scope One and Scope Two emissions and to take steps to reduce them.
Is Net Zero enough?
In short, almost certainly not. Achieving net zero by 2050 is a step on the way to zero emissions and carbon negativity. But that is a topic for another day.