01 Mar Net Zero through Renewable energy- Is it possible?
James Byrne - Director, ESG
Net Zero through Renewable energy- Is it possible?
Going Net Zero is the latest and most ambitious goal a company can take when it comes to sustainability, with the exception of going net positive. But before we get carried away, many of our clients ask us:- Is it really feasible for any business to achieve a net zero business?
The short answer is that it’s easier than most people think. The longer answer is that it takes a bit of planning and that’s where utilizing a net zero consultant is the wise choice. A consultant can save your business a fortune in wasted time and unnecessary risk, as they enable you to avoid common pitfalls like getting bad energy contracts. Let’s take a look at some of the major ways that your business can leverage to set a path to net zero.
The Renewable Age has already begun
Firstly it’s worth acknowledging what you are probably thinking, going net zero is just too much hassle right, now. We are still in the throes of a Covid pandemic shutdown and you want me to pivot into net zero! Actually this really is the best time to do so. For a few reasons. The pandemic has accelerated the conversation around resiliency, not only of a business but of the entire global economic system. Similar to 2008, big conversations are happening that seem to parallel the ones about credit risk after the fall of Lehman brothers.
Today, the big questions surround climate risk, low carbon transition risk and the ability of businesses and economies to weather global events that we have never properly considered before. After Lehman the Dodd Frank Act sought to make sure a 2008 would never happen again. That was not too hard, the Act dealt with numbers, leverage, products. It was drawn up to protect consumers. But how do we protect the environment while doing business, how do we govern our companies and support our supply chains fairly? How do we protect Society from the environmental and social consequences of running our business? And how do we get to net zero while still focussing on the bottom line? The answers to these questions require many answers, and not just one solution. But one very huge way businesses can get ahead of the low carbon transition risks, save money and tackle climate change is to set a Net Zero Goal. Going Net Zero kills many birds with one stone (or saves them hopefully!). And this transition isn’t just for eco focused businesses either, its for everyone. The oil giant BP stated in 2020 that the rise of the Electric Vehicle was unstoppable. In fact, BP just announced its own net zero goal. The fossil fuel based company is aiming to achieve net-zero emissions across its operations and production by 2050 or before. It also aims to cut the carbon intensity of the products it sells by 50% within the same time period. Other companies setting similar goals include American Airlines, CEMEX and Ford Motor Company. If that doesn’t get you thinking as a business owner, then nothing will!
In a new research paper from Princeton University, called “Net-Zero America”, five distinct technological pathways for the United States to decarbonize its entire economy by 2050 are identified. In all of the net-zero scenarios, a rapid scaling up of investments in clean infrastructure are required now, not in the future. This is why it’s vital for business to become a part of the solution by setting their own net zero pathway.
So how do we do it?
The first philosophical step is to look at your business strategy. Before we can get practical we must get strategic and theological. Why does your business exist? How does it function? Are we really doing things properly or could we improve? Are we truly committed to sustainability or do we just want to say we are? It’s worth saying that actually going net zero is much easier than trying to fake it, and like Lehman, eventually the curtain falls down and the Wizard of Oz flounders. To align your strategy so it makes net zero possible and even easy, our net zero consultants will thrash out the big questions so you can see clearly and develop a future focus that perhaps never existed before. Our clients time after time tell us how liberating it is to be ahead of all the sustainability rhetoric. It’s good for business and good for peace of mind, as well as profits of course.
Setting real targets
The first practical step is to set science based targets for carbon reduction. This sounds tough to do, but it’s really not, it just takes a little coordinated number crunching which we can help with.
Operational Energy v Product Carbon intensity
Most companies have access to their energy bills and from these we can determine a lot about how much carbon you use. Then for products and services, we have life-cycle assessment tools that can quickly quantify where you are using most carbon and where it’s most cost effective to reduce it. You may wish to concentrate on just operational energy use, energy used by the companies you invest in, or the actual carbon intensity of your products or services.
Can’t we just offset our carbon?
Remember going Net Zero shouldn’t just be about balancing the scales of energy in energy out, it’s about reducing gross energy use, so that we reduce overall global carbon. That’s why carbon offsets though useful cannot be the main line of attack for a company serious about net zero, and about saving money. Going Net Zero therefore, may not change how you do business, but it can do, and that’s good if it’s handled properly by consultants who know what they are doing!
Getting Strategic about renewable energy
Next is to help you set budgets and identify the best renewable energy contracts or on site generation options available and any incentives available that can partially or fully cover up front installation costs. We can also help you assess your assets so you can get strategic about where renewables may fit most easily into your existing infrastructure. It may make sense for instance to just install solar at head office and then purchase green electricity to offset your business travel, it all depends on how you currently run your business.
So if you want to capitalise on being a Net Zero Leader, join us, use us and partner with us. We can help you do the right thing, and save you money in the process.