The net zero transition is core to being a responsible business and should incorporate circular economy strategies, leverage cross-sector partnerships, center justice and inclusion into plans, and demonstrate progress through the ESGs to ensure the transition benefits business and society.
Transitioning to net zero can significantly reduce global greenhouse gas emissions, an important step to tackling climate change. According to the Net-Zero Challenge several companies committed to reducing their emissions are achieving reductions in emissions. For example, Enel, an Italian utility company in the business of electricity and gas, is making the transition and has net-zero targets for 2050. Since setting its certified goal to reduce emissions, Enel has reduced emissions. By 2050, Enel has plans to fully phase-out of natural gas and invest more in renewable energy
Transitioning to a net zero business model is not simple. It takes planning and the deployment of innovative, new business models and technologies to substantially change operations and remove emissions. One approach to significantly and sustainably mitigate greenhouse gas emissions is by applying circular economy strategies. The Ellen MacArthur Foundation, a non-profit working with businesses and partners such as Pyxera Global to inspire systemic changes and the adoption of circular economy, defines a circular economy as designing out waste and pollution by keeping products and materials in use and using renewable resources in a regenerative way.
Several companies are already deploying circular economy strategies to create more sustainable products as part of their approach to reducing their carbon emissions. Take for instance Adidas, in January of 2020 the company announced that their “products and processes will be a part of a new circular business model” which will help the company reduce emissions. They have already introduced the UltraBoost DNA loop shoes which are 100% recyclable and made of 100% recycled material. Companies deploying circular strategies as part of their net zero transition will have more sustainable and resilient businesses.
Harness Cross-sector Partnerships to Overcome Barriers and Make the Transition
The transition to net zero will be most successful across industry if cross-partnerships are leveraged and the transition is not done in siloes. Daniel Schleifer, Senior Sustainability Manager, thyssenkrupp (WRI) elaborated on the importance of everyone’s engagement in the net zero transition explaining that “There are some really big challenges to get to where we need to be. These changes don’t just have to take place within single companies, but across whole industries, the whole economy, including energy provision and infrastructure. It’s a wholescale transformation that is needed but I am confident and positive that it is possible.”
Companies who have not yet committed to or begun their net zero transition may face barriers to implementation which can be alleviated through system-wide collaboration. For example, common barriers amongst UK businesses include lack of time, resources, and in-house expertise. Businesses can work together with industry peers to overcome these barriers to help bring about sectoral change by sharing their experiences and even risks of technology development and related investments.
Collaboration with each company’s stakeholders (shareholders, employees, customers, board, suppliers, and communities) as well as policymakers, and civil society will also be helpful. For example, civil society consists of non-profits who are experts in setting emissions targets and can help companies to set those targets and disclose their progress. There are also many coalitions and alliances already in motion that are exchanging tools and resources amongst businesses, governments, and non-profits on best practices to transition to net zero and circular economy. Here are just a few of those:
- UN Race to Zero Breakthroughs Campaign: A UN Campaign that represents the largest alliance of local governments, businesses, investors, and others who are aiming for net zero by 2050. The coalition has a roadmap of targets for key sectors to get to net-zero carbon emissions.
- We Mean Business: A global nonprofit coalition working with the world’s most influential businesses to take action on climate change.
- Transform to Net Zero: An initiative led by companies to develop and deliver research, guidance, and implementable roadmaps to enable all businesses to achieve net zero emissions.
- The Ellen MacArthur Foundation: A non-profit supporting corporations on their journey to make the transition to circularity.
- Circular Cities: A coalition that facilitates the transition from a linear take-make-waste economy to a new regenerative and circular economic platform.
- The Loop Alliance: A project of the World Economic Forum, which aims to establish new models of consumption.