Businesses will be the chief drivers to help the UK and the world reach their net zero targets. This belief has propelled us to develop world-class energy and sustainability consultancy and technology solutions.
We see the growing, persistent appetite for real climate change action, evidenced by the increase of climate initiatives and the demand by consumers for businesses and organisations to be environmentally conscious.
What does net zero mean for your business? In this net zero guide for businesses, we define key terms and concepts relating to net zero. We also discuss how businesses like yours can approach climate change, decarbonisation, and net zero.
Table of Contents
Terms associated with climate change and sustainability
Understanding the many terms related to net zero will help you properly frame the conversation and strategy on the subject. Terms such as “net zero” and “carbon neutrality”, for example, sound similar in meaning, but are actually quite different.
Greenhouse gas emission versus carbon emissions
Some people conflate the definitions of greenhouse gas emissions and carbon emissions. Both are similar in concept, but one encompasses a broader scope of activities than the other.
There are seven polluting gases that comprise greenhouse gases (GHG). Carbon dioxide is the most significant of these greenhouse gases, accounting for nearly 79 per cent of the UK’s greenhouse gas emissions.
The other six greenhouse gases are methane (CH4), nitrous oxide (N2O), hydrofluorocarbons, perfluorocarbons, sulphur hexafluoride, and nitrogen trifluoride.
Thus, when people say that we must eliminate greenhouse gases from business activities, it means we must eliminate all emissions linked to the seven greenhouse gases. To reduce all greenhouse gases is a much bigger challenge, and this is why we often focus on reducing carbon dioxide, the most potent and abundant of the greenhouse gases. Methane is often the next target of elimination for many businesses.
The Paris Agreement bound participating nations to be net zero by 2050, meaning that the balance of the amount of greenhouse gases emitted into our atmosphere and the amount that is removed from it is zero. It certainly is an ambitious target. If met, it will keep global warming below 2 degrees Celsius by 2050 and which requires nations, organisations, and individuals to greatly reduce carbon emissions.
The principle behind net zero is to vastly reduce how much carbon we put into the atmosphere whilst removing emitted carbon and other greenhouse gases from the atmosphere. Ways in which we can remove greenhouse gases from the atmosphere include planting trees or further developing air capture systems. A nation like Bhutan is a good example of how reaching net zero is possible. They capture and remove more greenhouse gases than they produce.
The UK has one of the most ambitious net zero targets in the world. It wants to cut emissions by 78 per cent (compared to 1990 levels) by 2035.
According to the Carbon Trust, a net zero company is one that sets and pursues an ambitious 1.5 degree Celsius target for its full value-chain emissions. Remaining emissions that are “hard to decarbonise” can be compensated through certified greenhouse gas removals.
Decarbonisation means to lower the intensity of the amount of carbon emissions produced through processes and power sources. This involves decreasing CO2 output per unit of electricity generated.
While the energy and transportation sectors are the focus of decarbonisation efforts, all businesses can identify ways to reduce their carbon footprint. ClearVUE.Zero’s carbon auditing features lets businesses see the carbon intensity of their activities, down to the unit level of production. This means that you could, as a bakery, for example, know how much carbon is emitted per loaf of bread produced by your business.
Sustainability, in general terms, refers to the capacity for civilisation to meet its present needs without compromising the ability of future generations to meet their own needs. In business energy terms, it means sourcing energy from resources that are capable of being replenished.
Fossil fuels are finite and their by-products damage our environment. This is why the transition to renewable resources such as wind, solar, and biomass and the development of renewable technologies are so important. These cleaner resources can help meet our energy needs without jeopardising the health of our planet.
Gross zero is often confused with net zero. Whereas net zero targets means having some carbon emissions in processes and supply chains is permitted (as long as that amount of carbon is removed from the atmosphere), gross zero targets are ones where all emissions are absolute zero. In other words, not a single gram of carbon dioxide would be emitted by our activities.
The combination of decarbonising our economies and technologies and removing emitted carbon dioxide from the atmosphere will help us reach our wider net zero targets.
For a business to be carbon neutral, it means that the amount of carbon dioxide they emit into the atmosphere is balanced by the same amount of carbon dioxide removed, also known as carbon offsetting.
The key difference between carbon neutrality and net zero is that carbon neutrality deals strictly with carbon emissions, whereas to be net zero means that the net emissions of all greenhouse gases is zero.
Carbon positive and carbon negative
Carbon positive and carbon negative are used to describe activity that goes beyond achieving net zero carbon emissions by removing additional carbon dioxide from the atmosphere. The former may sound counterintuitive, in that it refers to numerically positive amounts of carbon in our environment. Both terms are used to describe the net removal of carbon dioxide.
These are primarily marketing terms and are not used much in scientific literature or policy documents.
Carbon offsetting allows companies to invest in environmental projects in order to offset the amount of carbon that they generate. For example, a company can invest in a carbon reduction project such as reforestation or afforestation or in a renewable energy site somewhere in the world to make up for the carbon that they will produce.
Carbon offsets are measured in metric tonnes of carbon dioxide equivalent (CO2e). This means that one tonne of purchased CO2e is one less tonne of carbon produced in the atmosphere. Carbon offsetting plays a role in reducing carbon emissions, especially if you are just starting out on your sustainability journey.
A common carbon offsetting practice is to purchase Power Purchase Agreements (PPAs). These are long-term supply contracts between a seller and buyer where the seller, often an independent renewable power generator, generates renewable energy for the buyer to purchase. These kinds of contracts help fulfil net zero goals as they support the funding of new renewable energy solutions.
Why should businesses urgently pursue net zero targets?
The 2022 IPPC (Intergovernmental Panel on Climate Change) assessment report confirms the urgency facing us to reverse climate change and mitigate catastrophic environmental disasters as much as possible. Additionally, the energy crisis in the UK, Europe, and in many other parts of the globe highlight the need for us to transition away from fossil fuels much sooner than originally planned.
Net zero is the defining challenge of the current business climate. Organisations are being confronted to reduce their harmful activities so that the global temperature increase does not lead to catastrophic environmental damage.
How can my business take action now?
We are the sustainability partner of choice for businesses who care about the world of tomorrow. We provide businesses with the tools and long term support that they need to minimise their carbon emissions and obtain net zero emissions from their operations.
Tackling the climate issue as a business does not always require one drastic step. It can be approached by several smaller, more manageable ones.
ClearVUE.Business offers a five-step approach for businesses to chart, embark on, and succeed in their net zero strategies. The comprehensive approach includes energy and carbon audits, strategy building, site surveys, consultancy on policies and reporting obligation, and on-going support.
All of it is underpinned by ClearVUE.Zero, our powerful carbon and energy management solution. It utilises the best in cloud technologies, AI, and big data – all of which are transforming the way businesses monitor and manage their own energy portfolio. Our solution gives businesses live and granular-level information on their energy consumption, enabling them to quickly make important decisions towards decarbonisation and energy cost savings.