A recent study conducted in 2020 by IBM found that ‘almost six in ten consumers are willing to change their purchasing habits to help reduce negative environmental impact.’ IBM also found that ‘eight in ten consumers indicate that sustainability is really important to them.’
With findings like these it comes as no surprise that companies are desperate to demonstrate all they are doing to reduce their environmental impact. On the surface this is fantastic. Consumers are driving companies to initiate systemic change to protect our planet.
However, implementing these measures to reduce environmental impact is not an easy feat. It is not something that can take place overnight. Yet, numerous companies over the past couple of years have come out saying things such as ‘Company X is Net Zero’ or ‘Company Y is Officially The First Carbon Negative Beer Business.’
Phrases like these used in marketing collateral may sound positive to us as conscious consumers who care about the planet but what do these sentences actually mean? Do they have the positive connotations we think they do?
To answer these questions, let’s first look at the ipcc.ch definition of Net Zero.
Definition of Net Zero:
Net zero emissions are achieved when anthropogenic emissions of greenhouse gases to the atmosphere are balanced by anthropogenic removals over a specified period’ (IPCC definition of Net Zero emissions.
In essence, when an organisation, place or person has no global warming impact it is because any greenhouse gas emissions they have produced which contribute to climate change have been taken out of the atmosphere. Leaving no footprint. Zero. Zilch.
For an organisation, up until recently there has been no consensus for Net Zero criteria, but the Science Based Targets Initiative (SBTi) definition is emissions reductions in line with the Paris Agreement of 1.5C limit, and for those emissions that remain, permanent removal of an equivalent amount of atmospheric carbon dioxide.
If so, many governments are setting this target it then makes logical sense for businesses to follow suit. However, there is growing criticism of businesses' claims of net zero, due to inconsistency of criteria and doubt about whether net zero at the company or country level has any real meaning.
#1 Some organisations who claim to be Net Zero are demonstrating a 'lack of real climate action' with time frames that are simply incorrect.
For a company to be Net Zero they will have to balance the emissions produced with emissions sequestered (captured and stored) from the atmosphere. Many large corporations, such as Amazon and Google are purchasing carbon “offsets” to reach this goal. However, there are a multitude of issues with carbon offsetting.
The most pressing concern with offsetting, is the fact that there is a mismatch between when carbon will be physically removed from the atmosphere and the date that companies claim to be Net Zero. For example, if a company needs to offset 200 tonnes of carbon dioxide equivalent, they may choose to fund tree planting projects. However, one tree sapling will take for example, an average of 40 years before it absorbs one tonne of carbon dioxide. So, while in 2020 they emitted 200 tonnes of carbon dioxide there will be a lag time of 40 years before those emissions are removed from the atmosphere, during which time the 200 tonnes will have been adding to the cumulative greenhouse gas effect and increasing global heating.
Companies may wish to get around this by purchasing Ex Post offsets. These are offsets that have already been achieved. For example, a forest that was planted 100 years ago may have absorbed the said 200 tonnes of carbon dioxide required for the company in the example above. However, by simply buying a certificate for a forest that has already been established provides no added benefit for the planet. It is not fair to say that the company is Net Zero because they pointed at a random forest and bought a certificate for it. This does not demonstrate the company to be initiating additional carbon removals. The forest would have been there regardless. Plus, measurements of carbon dioxide in the atmosphere have already taken these forests into account. Therefore, buying the certificate has no positive environmental impact and no additional carbon dioxide will be taken out of the atmosphere from offsetting.
Offsets allow a company to continue business as usual and to shy away from the difficulty of tackling reducing their carbon emissions, while deeming themselves to be ‘Net Zero’. They can simply throw money at under-priced offset projects in the global south, diverting funds away from decarbonisation of their own operations and into schemes that are vulnerable to carbon leakage and climate injustice such as land grabs from indigenous peoples. Meanwhile, the said company continues to emit a high level of greenhouse gases. Such companies are not actually initiating the systemic change we as consumers think they are. They are merely paying for others to clean up the mess they have made and continue making.
What’s more, this mess is not easy to clean up, and as we have already stated, paying away the problem often makes zero difference in avoiding climate change.
The mess remains. The company is worse off financially and has made no real difference towards limiting climate change. Plus, their reputations will suffer.
#2 Carbon offsets do not count towards your climate change targets of Net Zero
Why invest your company’s money into offsets, which are not supported by the United Nations Global Compact, who state, 'Avoided emissions and offsets are not counted towards the attainment of Net Zero commitments’? Invest instead in direct reductions and setting realistic targets related to your operations. This will future-proof your business by showing your customers the efforts you are making now.
Organisations that follow best practice opt to set science-based targets. These are quantitative targets for reduction in line with the latest science, increasing the likelihood that your business stays below the 1.5 degrees Celsius trajectory to avoid catastrophic climate change. Using 2019 as a base year, science-based targets absolute contraction method requires a reduction of 21% by 2024 and 42% by 2029.
The Science Based Targets initiative have stated that offsets ‘do not replace the need to reduce value chain emissions in line with science.’
During their most recent consultation, the Science Based Targets initiative have stated that you are able to neutralise only your residual emissions to comply with the SBTi science-based net-zero criteria. These are your emissions produced while on your journey to reaching science-based targets. In other words, you have reduced your emissions by 21% in 2024 and your remaining emissions can be neutralised at the point you declare your organisation net-zero.
To neutralise your emissions, you must only use real physical carbon removals that are additional and take place by the net-zero target date, and not fund offsets or projects that do not directly remove carbon dioxide from the atmosphere.
However, the focus is still on reduction, as opposed to capture. This will continue to be the case, with offsetting being scrutinised more and more.
Therefore, it makes business sense to focus on your operations in your direct control.
#3 The Advertising Standards Association and the press are calling out false environmental claims regarding net zero.
The Advertising Standards Association outlines strict rules and regulations for organisations to market their operations as ‘Net Zero’. There have been numerous cases where they have taken down adverts on this premise.
By using the term ‘Net Zero’ in your marketing strategy, you will face scrutiny and could suffer reputational risk. For example, a solar panel company wrote that they sold; “zero carbon solar power & water heating.” While we know solar panels are fantastic, to claim them to be completely net zero is not factually correct. ASA found this statement to be misleading because when looking at the full lifecycle of solar panels, carbon emissions are produced. So even if your company sells an environmental product or has an admirable environmental policy, stating you are Net Zero is not factual.
What’s more, there are a growing number of articles calling out overblown Net Zero claims. For example, in a recent Bloomberg article JP Morgan have been criticised for buying carbon offsets with The Nature Conservancy, while continuing to use private jets. This is inherently backwards. Plus, The Nature Conservancy have been accused of being “engaged in the business of creating fake carbon offsets.” They have sold certificates for areas of forest which would have been protected whether JP Morgan paid them to be or not. Therefore, no additional carbon is being sequestered through JP Morgan’s offsetting.
Another example of a company being highlighted in the press to be ‘green washing’ are the asset managers Brookfield who claimed to be Net Zero through avoided emissions by investing in wind turbines. While, this investment is fantastic, it does not result in Brookfield being Net Zero. Nor does it count towards fixing the fact that they invest part of their US$600-billion portfolio in coal and other fossil fuels.
Shell are another offender, claiming they will be Net Zero by 2050 by planting a forest the size of Spain. Where will they find this land? And how will these trees absorb the huge quantity of emissions produced by Shell’s oil and gas? Claims like these are being and will continue to be criticised.
Reducing your environmental impact can be convoluted, with extensive supply chains and infrastructural limitations. There is often no quick fix. We urge you not to be tempted to take shortcuts to be seen to be doing the right thing. Covering up your emissions through offsetting is not the answer. Doing so is classed as greenwashing – when a company promotes itself as being sustainable when in reality it is not.
Instead, focus on your direct impact through minimising your emissions in your operations. Set realistic targets and be transparent with your customers. Realise that no one is perfect. Instead of claiming to be Net Zero consider being honest.
If you have any questions, comments or thoughts, please do get in touch, we would love to keep the discussion going.
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