With the COP26 climate summit taking place in Glasgow this week, we thought it would be timely to look at the practical challenges facing businesses wishing to reduce their emissions and become sustainable in alignment with the government’s net zero strategy.
Setting targets is crucial for companies with complexity across sectors, technologies and business structures. However, setting targets is often the easy part, as we set out in our latest Insight paper in collaboration with Cornwall Insight - Unlocking net zero strategies for businesses.
While the net zero challenge is one we all face, organisations are in different situations and start from different positions. There is no one-size fits all approach. Companies need to look at their own specific circumstances – their energy use and requirements and how that might be reduced, how they source that energy and what options they may have for clean energy generation or enabling such generation. They also need to think beyond their own operations and consider their suppliers and the wider market. What opportunities do they have to work with other businesses – vertically, horizontally or geographically – in order to achieve net zero?
Our report explores the potential routes to decarbonisation that businesses have at their disposal to meet their targets and help countries meet their net zero targets.
Key findings of the report:
- Pressure for businesses to adopt net zero is both bottom-up and top-down
- Successful approaches will be shaped by location, scale, and exposure to different vectors
- Best practice sharing and cooperation may unlock faster progress
- Green supply is attractive but beware of greenwashing
- On-site generation works for businesses with physical space and access to up-front capital.
- Corporate PPAs are for creditworthy businesses, but the market is ripe for innovative partnerships
- Businesses need to be assertive and proactive
Companies have a duty – both legally and morally – to take measures in relation to limiting global warming. Moreover, there is an increasing commercial imperative – with potentially serious consequences from a commercial perspective if they do not act.
While the rising consumer demand for cleaner and more eco-friendly products and services is a factor, it is the rapidly growing number of public bodies and companies setting out their own net zero commitments – and consequently looking to reduce their greenhouse gas emissions through their supply chains – that will truly accelerate change.