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Where does business fit into the net-zero narrative? And, most importantly, how can companies use their influence to accelerate climate action?

The role of business in reaching net-zero

13 November 2020, 16:12 GMT 3 min read

By Mike Pierce, Director of Corporate Partnerships at the Climate Group

Climate protest movements of the last few years have sent a powerful message from the public: we are in a climate emergency and need ambitious action from our leaders—now.

Covid-19 may have distracted attention from these demands. Yet as we approach one year before the next COP climate conference, we’ve seen a swathe of national, regional and state governments setting ambitious net-zero targets for decarbonisation.

South Korea and Japan are the latest major economies to announce their net-zero goals. But China, the largest emitter of greenhouse gas in the world, captured the greatest attention with their commitment to achieve net-zero by 2060.

So, where does business fit into this narrative? And, most importantly, how can companies use their influence to accelerate climate action?

We’ve seen a shift from businesses in the last 10 years. Once seeing ‘green’ issues as secondary to ‘business as usual,’ companies have now begun to embed environmental actions into the core of their practices.

10 or 20 years ago, setting environmental goals may have been seen as an exercise in managing reputation. Now, the C-suite of the world’s top firms increasingly see decarbonising their business as essential; not only for the protection of the planet, but for their bottom line.

Take one example. Our valued partners Signify announced at COP21 their intention of becoming carbon neutral across all operations within five years. Proudly, they recently confirmed that they’ve achieved this goal.

This is an impressive accomplishment; reached through implementing energy efficiency initiatives at their sites, using renewable energy (both on-site renewables and those supported through power purchase agreements), using more sustainable modes of transport, and optimising their logistics operations. Today, Signify CEO Eric Rondolat calls on more businesses to join them.

Our CEO Helen Clarkson said of the announcement, “We would like to congratulate Signify on their fantastic achievement of carbon neutrality across all operations in 2020. We have been working in partnership with Signify for over 10 years to accelerate the global adoption of energy efficient LED lighting and through Signify’s support of RE100 and EV100.”

Having a group of influential companies setting their own net-zero goals sends a clear signal to governments that climate matters to business success, and that authorities need to support this in their national commitments.

Governments setting commitments will encourage more businesses to set their own targets, as well as ratcheting up ambition in businesses with existing targets. As a result, a company might say, “Okay, we’ve hit net-zero. What’s next?!”

We’ve seen that having a committed group of companies can help influence climate policy and also shift markets (by unlocking public-private financing and reducing costs of climate-friendly technologies, for example).

There are encouraging signs, with more and more businesses and governments making net-zero announcements; however, we’ll need to accelerate the scale of these rapidly if we’re to achieve a net-zero emissions world by 2050.

We are now in the Climate Decade, and it is vital that the private and public sectors—together with civil society—collaborate effectively if we’re to achieve the Paris Agreement’s goals for decarbonisation. And we, with our work here at the Climate Group, are determined to be at the heart of these partnerships.