Net Zero strategy

Net Zero refers to the target of balancing the amount of Greenhouse Gas (GHG) emissions and the absorption of existing GHGs from the atmosphere. A Net Zero strategy provides the roadmap for companies to contribute to this goal.

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What is Net Zero?

Net Zero stands for the objective of a balance between human-induced GHG emissions and the removal of existing ones. Many companies aim for Net Zero as a result of their decarbonization or climate strategy. As climate change continues, this is a necessary, but still demanding step. Therefore, a customized strategy provides guidance on how to become a Net Zero company.

Many countries have committed to the emission targets of the Kyoto Protocol. In addition to carbon dioxide (CO2), its targets also include GHGs such as methane (CH4) or nitrous oxide (N2O). A Net Zero strategy covers much more than achieving zero carbon emissions. Unlike Net Zero carbon targets or carbon neutrality, the state of Net Zero is clearly defined in the Science Based Targets initiative (SBTi) guidance.

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Become emission free with Net Zero strategies
Net Zero target

Why is Net Zero important?

Net Zero targets have become increasingly important due to global warming. As the IPCC report proves, climate change has far-reaching consequences for the environment and life on earth. It is accompanied by uncertainties, threats, and also financial risks for every business.

The EU green deal, and the sustainable development goals, are just two of many examples of how the green transition is proceeding. Moreover, it is expected that the costs of CO2, for example, through the carbon tax will be increased sharply in the next few years. This is why reducing GHG emissions is not only a question of environmental protection but also a cost factor. Greenhouse gas reduction and becoming a Net Zero company definitely pays off.

“Companies must reduce their emissions in order to mitigate climate change, save costs, and run a successful green business. The sooner the better.”

– Margit Kapfer, Senior Manager Decarbonization

How we can help you to become a Net Zero company

Our teams consist of environmental consultants and sustainability experts from different disciplines to provide you with the best services from one source. We support you in your decarbonization strategy in accordance with existing Net Zero standards and on a sound scientific basis. Therefore, we deploy the internationally acclaimed Science Based Targets initiative (SBTi) mitigation hierarchy. It stipulates that companies must implement abatement measures as the immediate priority and only then seek to offset the residual emissions.

5 steps: Your Net Zero roadmap

By having a Net Zero strategy, you follow a clear roadmap to reduce GHG emissions with impactful activities.

Calculate Carbon Footprint

Avoid energy consumption and raise energy efficiency

Source renewable energy

Reduction of emissions in the value chain (Scope 3)

Lastly: neutralization of residual emissions

At denkstatt we always employ the principle of reducing first and then neutralizing the residual emissions. To reach the state of a Net Zero business in line with your sustainable business strategies, we support you in accomplishing the following steps:

  • Abatement within the value chain: First, try to achieve value chain emissions reduction. This has to be in line with the abatement required to reach global Net Zero in 1.5 degree Celsius pathways.
  • Removals: Then, you must neutralize the impact of the residual emissions by permanent removal and storage of an equivalent volume of GHG.
  • Abatement or removals beyond your value chain: In addition, you can consider so-called “beyond value chain mitigation”. Besides your efforts to avoid emissions in your own value chain as much as possible, you can join carbon offset programs by investing in high-value carbon offset credits.

Reach out to our expert to find a solution that suits your company!

Constantin Saleta

International Service Leader Decarbonization

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FAQ

Frequently asked questions on Net Zero

Net Zero is a state where no incremental greenhouse gases are added to the atmosphere. This means achieving a balance between the 10-20% GHG emissions that may remain after all mitigation measures have been implemented, and the absorption and thus removal of these emissions by technical or biological processes from the air.

Carbon neutrality, like climate neutrality, is not a uniformly defined term. Recently, some companies have been accused of greenwashing for not reducing their emissions but buying their way to “neutrality” through dubious carbon offsetting certificates. Some companies have also been sued for consumer deception here because their company, product or service was portrayed as having no negative impact on the climate, which was not scientifically true. For this and other reasons, we recommend a scientifically defined and transparent decarbonization target and a focus on emissions reductions towards Net Zero.

Due to the high amount of GHG emissions, our climate is changing rapidly. Global warming is taking its course. Mitigating climate change can only succeed if everyone contributes to the reduction targets. At the same time, there is increasing pressure on companies to manage their emissions. By defining and following a Net Zero strategy, you are taking the right steps to become a Net Zero company and be in line with regulatory requirements.

Net Zero emissions should be targeted on a scientific basis. The Science Based Targets (SBT) approach is currently the most widely accepted standard. Obtaining Net Zero requires an 80-90% reduction of emissions, depending on the industry sector. Any carbon credits used to account for the remaining 10-20% of emissions should be from verified removal projects that sequester carbon from the atmosphere and store it in the long term. Having these targets in place means that your business can demonstrate a credible commitment to reducing emissions as part of its Net Zero strategy. Learn more about how we support you in SBTi target setting.

To achieve Net Zero, businesses are required to achieve emissions reductions of 80-90% of emissions and neutralize the remaining 10-20% via carbon removals that sequester carbon (CO2) from the atmosphere and store them for the long term. It is important to note here that the classic “offset certificates”, which theoretically avoid CO2 emissions elsewhere (electric cook stove in Africa, investments in wind farms, etc.) are not eligible. Removal projects actively remove carbon from the atmosphere in a technical way (“direct air capture”) or in a biological way (afforestation, sequestration, etc.) and store the carbon in the long term over a period of >100 years. There are still very few of these projects, and standards for them are still being developed in many areas.

Net Zero, carbon or CO2 neutral get mixed up frequently. Carbon or CO2 neutrality only covers carbon emissions and excludes any other GHGs. Climate neutral would scientifically mean that other climate-impacting effects, such as albedo, are considered in addition to all greenhouse gas emissions.

In addition, the term neutrality is not clearly regulated by any standard and can mean that no emissions were reduced, and only offset certificates purchased to achieve neutrality. Net Zero, on the other hand, is clearly defined by SBTi and means that 80-90% of emissions must be reduced.

denkstatt therefore recommends transparent and ambitious target formulations. Here are a few possible examples:

  • “Net Zero CO2 emissions (Scope-1-2-3) by 2040.”
  • “Net Zero greenhouse gas emissions (Scope-1-2) by 2030”
  • “-42% CO2 emissions (Scope-1-2-3) by 2030″

The reduction of Scope 1 emissions and Scope 2 emissions is a technical challenge that can be solved by most companies with existing technologies at little additional cost and sometimes even cost savings. Scope 3 emissions are a strategic challenge that must be considered holistically. For this holistic approach, Life Cycle Assessment and Circular Economy have an enormous potential to reduce emissions, while avoiding adverse effects on water consumption, biodiversity, and resource consumption. To address this complexity why we recommend conducting Life Cycle Assessments (LCAs) on products and services in order to not only identify the CO2 reduction levers along the value chain, but also to identify and address interactions with other environmental impacts (biodiversity, water consumption, resource use, etc.), and find a holistically sustainable solution.

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