Pathways to Net Zero: The Decisive Decade

Energy Transition

Pathways to Net Zero: The Decisive Decade

A roadmap for companies to accelerate climate progress.

We are in the “Decisive Decade” for climate action. The imperative to act now and halve emissions by 2030 on the pathway to net zero has never been higher. More than ever before, the private sector is on board for making the essential changes the planet urgently needs – not only to meet global targets, but to build and retain a competitive advantage, generate long-term value, and minimize risk.

This report, produced by EDF in collaboration with Deloitte, sheds light on how companies can turn their net zero pledges into real results by identifying and prioritizing the highest-impact solutions using a tailored emissions profile as the foundation.

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01 Identify & Map

Identify potential abatement solutions and map the abatement actions to emissions profile categories.

Emissions Profile

In order to build a baseline understanding of what is required for your pathway to net zero, you must first measure and understand your current emissions.

A strong emissions profile combines three key elements: Scopes 1, 2 and 3, subcategories and GHG type. This level of GHG accounting is essential for building an emissions profile that can be the foundation for the work ahead. Standards and tools for emissions measurement and reporting include:

Emissions Measurement and Reporting Standards

Greenhouse Gas Protocol

Greenhouse Gas Protocol

Requirements and guidance for companies preparing a GHG emissions inventory

Value Reporting Foundation

Value Reporting Foundation

Standards for public reporting of sustainable accounting data

Global Reporting Initiative Standards

Global Reporting Initiative Standards

Framework for creating organizational sustainability reports

Emissions Measurement and Reporting Tools

Scope 3 Evaluator

Scope 3 Evaluator

Free, web-based tool for companies to estimate their emissions based on company spend

CDP Questionnaire

CDP Questionnaire

Climate change questionnaire to help disclose and manage environmental risks and opportunities

SME Climate Hub

SME Climate Hub

Resources, tools, and frameworks to help small and medium businesses track and disclose emissions.

A Comprehensive Climate Goal

On the pathway to net zero, companies must:

1 Implement near-term science-based goals for decarbonization of your operations and value chain.
2 Accelerate investments in natural climate solutions within and beyond your value chain to maximize overall climate benefits.
3 Ensure methane is addressed in your emission reduction strategy.
4 Support and influence net zero-aligned climate policy.

But net zero pledges are only the beginning. Companies need to urgently translate commitments into action to slash emissions over the next decade. Every company – including those in hard-to-abate sectors – will need to take advantage of a range of potential opportunities to lead, invest, and advocate to meet climate goals.

Identify

To start, you can locate a set of abatement solutions relevant to your sector or industry by referencing a combination of cross-sector abatement solution resources, including:

Cross-Sector Abatement Solution Sets

Pathways to Net Zero Report

Pathways to Net Zero Report

Includes sets of abatement solutions for transportation, agriculture, retail, and technology

Project DrawDown

Project Drawdown Table of Solutions

Cross-sector and sector-specific climate solutions, ranked by CO2e reduction potential

EPA GHG Reduction Programs & Strategies

EPA’s GHG Reduction Programs & Strategies

Resources and guides to identify and implement GHG reduction opportunities

Sector-Specific Abatement Solution Sets

IEA Net Zero By 2050

Energy: IEA Net Zero by 2050

Roadmap for global energy sector to reach net zero emissions by 2050

Industry UN Climate Action Pathway

Industry: UN Climate Action Pathway

Action table with specific recommended climate actions for each heavy and light industry

Transport UN Climate Action Pathway

Transport: UN Climate Action Pathway

Action table with specific recommended climate actions transportation

Abatement solutions must also identify strategies to invest or advocate in a way that enables others to move faster in their net zero journey. The lead, invest and advocate framework should be incorporated into the process of identifying solutions and actions.

An example in action

To see how this works in practice, here’s an example set of abatement solution activities for a technology company organized using the lead, invest, and advocate framework.

Lead

Champion net zero in your own business

Scope 1
  • Building retrofits
  • Equipment efficiency upgrades
  • Adjustments to temperature, ventilation,
    and lighting to reduce energy use,
    including building automation
  • Reduced demand for new buildings
  • Centralized data centers and facilities to
    optimize operations
Scope 2
  • Switches to renewable energy
  • Low-carbon heating and cooling
  • Decommission of legacy networks
Scope 3
  • Ensuring products and services are not
    enabling production and sales of fossil
    fuels or other destructive practices
  • New business models to decarbonize
    end-user device electricity consumption
  • Circular materials, products, and
    processes
  • Purchase of high-quality carbon credits
  • Encouraging suppliers to set science-
    based targets

Invest

Invest in short-term and long-term solutions

  • New data center efficiency measures
  • Innovation in technologies and platforms
    that support carbon reduction across
    sectors
  • Partnerships with low-carbon
    construction capabilities
  • Technology for buildings to produce
    their own energy

Advocate

Advocate for policies consistent with net zero by 2050

  • Renewable energy incentives
  • Policies that support building retrofits
    and onsite renewable energy
  • Ongoing grid decarbonization
  • Incentives for efficient technology

Map

After developing a list of abatement solutions, the next step is to map the actions to emissions profile categories.

To conduct the mapping, create a table that lists company emissions sources from largest to smallest categories of emissions based on volume and GHG type (i.e., ensuring inclusion of high-intensity greenhouse gasses such as methane).

Then, map the abatement solutions to each row by selecting the activities that would directly reduce each type of emissions. After completing the mapping, you will have a short list of abatement solution activities to evaluate and prioritize.

Using the same technology company example from before, here’s a graph to show what mapping abatement solutions activities to emissions profile categories can look like.

Infographic: Mapping Abatement Solutions

Click to enlarge image.

02 Evaluate

Using our interactive scorecard, evaluate relevant abatement solutions against select criteria.

To accelerate action, you can use our Evaluation Scorecard as a starting point for abatement solution evaluation criteria.

Each abatement solution will have its unique benefits and drawbacks; selecting one solution over another will inevitably entail tradeoffs and complex choices. Your scorecard results will help to visualize the data and understand the balance of attributes within your portfolio of potential solutions, which will inform decisions about where to prioritize and how to invest. The Evaluation Scorecard allows you to enter and score up to ten potential abatement solutions against four major criteria (along with relevant sub-criteria). These four criteria are designed to prioritize solutions that maximize climate abatement in a way that creates financial value for your business and drives just outcomes for stakeholders.

After scoring each of the abatement solution activities against the Evaluation Scorecard, the next step is to compare the results side-by-side to understand the relative benefits and tradeoffs of each opportunity.

Launch Evaluation Scorecard

03 Prioritize

Using the emissions profile, the solutions map, and Evaluation Scorecard, prioritize near- and long-term abatement solutions for implementation.

With these tools, you can make strategic decisions about which abatement solutions to implement and how to implement them. Guiding questions to support the final prioritization of abatement solution activities based on mapping and evaluation include:

Which abatement solution should you prioritize?

You should prioritize solutions that are:

In the “top right” (i.e., high business value and high feasibility)

The “big circles” (i.e., solutions with the highest climate abatement potential)

The “teal circles” (i.e., solutions that improve equity and justice)

How can you improve the potential of solutions that scored poorly?

Low climate abatement: Assess opportunities to collaborate with coalitions and influence policy to drive greater scale of abatement

Low business value: Explore potential government subsidies

Low feasibility: Invest in R&D within and outside the organization

Low equity and justice: Involve outside stakeholders to reimagine the solution design

04 Get Started

Secure the funding and resources to begin planning and investing in the necessary high-impact solutions.

The Net Zero Value Lever Map

Use the Net Zero Value Lever Map to pitch the case for investment to internal company leadership to secure the funding and resources required. Start with quick wins to gain early momentum and buy-in, and identify the high-impact solutions to begin planning and investment now.

Revenue Growth

Customer Acquisition
Differentiate brand, product and/or service to attract new, values-driven customer segments who prioritize sustainability when making purchasing decisions.

Customer Loyalty
Retain customers and increase “share of wallet” due to improved brand reputation and loyalty from values-driven strategy, operations, and product and service offerings.

Price Premiums
Utilize sustainable attributes of products and/or services to capture price premiums where there is demonstrated customer willingness to pay for more sustainable products and services.

Product and Service Innovation
Use emissions reduction activities as an engine of innovation to develop new, low emission products and services (e.g., in-setting) and invest in nascent emissions reduction technologies and solutions.

Offsets and Credits
Grow and diversify revenue by capitalizing on carbon offsets, renewable energy tax credits, and other ways to create new business models from emissions reduction activities.

Cost Reduction

Operational Efficiency
Reduce operational costs by improving efficiency of company energy, water, land use, PP&E, and other assets and inputs.

Raw Material and Waste Disposal
Reduce need for required inputs and waste processing by converting to circular business models that require fewer raw materials and produce less waste.

Cost of Capital
Decrease cost of equity and debt capital due to demonstrated trend of investors setting lower return expectations and banks issuing lower interest rates to companies that exhibit responsible environmental practices.

Talent
Increase engagement and reduce turnover and recruitment costs by aligning company and employee values and adapting to the increasing trend of employees selecting employers based on environmental and social responsibility.

Taxes and Penalties
In countries with a mandatory carbon system such as a carbon tax or cap and trade, as well as regions considering adopting one, decrease direct liabilities by reducing company emissions.

Risk Avoidance

Supply Chain Risk
Reduce risk of operational performance challenges by incorporating climate risk and resilience into all supply chain activities (e.g., sustainable supplies, extended risk horizon, renewable energy).

Brand Risk
Protect against damages to brand reputation from not successfully achieving or reporting on public emissions reduction goals and bolster brand by contributing to sustainability solutions within and outside the company.

Regulatory and Public Policy Risk
Increase readiness for changing climate regulations and public policy, avoid lawsuits, and help shape policy as an actively engaged, early mover towards net zero.

Shareholder Risk
Increase ability to raise capital from investors due to reduced long-term climate risk (policy, weather, customer preferences, etc.) and reduce likelihood of climate-related activist investor takeover.

License to Operate Risk
Increase the likelihood of community, employee, and NGO support of company priorities and reduce the likelihood of negative advocacy efforts that could be costly and damaging to the brand.

The Importance of “Quick Wins”

Near-term, immediate action is essential for meeting 2030 emissions reduction requirements. These “quick win” solutions are often the low hanging fruit such as improving efficiency and waste, which can offer strong economic returns in addition to emissions reduction. Politically, “quick wins” are a powerful tool for gaining buy-in, funding, and resources for continued climate abatement work within an organization.

Pre-Competitive Collaboration

You will be able to go further and faster through shared learning and working together to overcome barriers and find innovative solutions. These groups – all of which aim towards resource-sharing, cross-sector collaboration, and co-investment – are making it possible to go beyond a single company and catalyze change across entire industries.

05 Read & Share

Read more in our Pathways to Net Zero series, along with key case studies from leading companies.

Pathways to Net Zero: A Guide for Business

Pathways to Net Zero: A Guide for Business

Our inaugural report in the Pathways to Net Zero series, “A Guide for Business,” was also produced with support from Deloitte. This first guidebook gives business leaders the clarification needed to accelerate the transition to a sustainable and more equitable future – and to turn commitments into action and results.

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Pathways to Net Zero: The Decisive Decade

The second report in our Pathways to Net Zero series is the first of its kind, providing a step-by-step outline for companies to take action toward executing on their commitments. Climate leaders can find details on:

  • Concrete, practical steps for advancing a company’s net zero journey within the Decisive Decade.
  • How a tailored emissions profile — including separating out operational and value chain emissions, looking at different categories of emissions, and identifying long- and short-lived greenhouse gases — helps set the foundation for identifying and prioritizing near-term solutions.
  • Opportunities to lead, invest, and advocate to meet climate goals.
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Innovation Imperative

The Innovation Imperative

EDF and Deloitte’s third installment of the Pathways to Net Zero series, “The Innovation Imperative,” aims to demystify the landscape of net zero innovation by identifying potential climate innovations, prioritizing their potential for impact, and recommending strategies to accelerate their development and adoption at scale. Reaching net zero emissions by 2050 to avoid the worst impacts of climate change hinges on companies making strategic, targeted investments in promising climate innovations while continuing to rapidly deploy the solutions available today.

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Case Studies

To accelerate progress, companies should look to peers within or outside of their industries to better understand leading best practices and learn from real-world examples.

Tyson

Partnering with the Department of Energy to host a training on energy-efficient refrigeration management practices.


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Danone

Empowering farmers to implement the abatement solutions that work best for them.


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Microsoft

Developing a smart building management system that reduces energy and generates revenue.


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Tyson Case Study

Partnering with the Department of Energy to host a training on energy-efficient refrigeration management practices

Measurement

When measuring its emissions, Tyson reports both the absolute totals as well as “intensity,” which is the emissions per pound of meat produced. For guidance on these types of reporting decisions, Tyson hopes to see approved, sector-wide methodologies for both calculations and public disclosure.

Action

Before asking its partners to reduce their emissions, Tyson wanted to start within its four walls and reduce its direct (Scope 1 and 2) emissions. Its emissions profile identified electricity as the source of roughly half of direct emissions, and refrigeration as the source of 60% of electricity, making refrigeration a top priority for abatement. The company then partnered with the Department of Energy to have the government agency deliver its free, two-hour training on efficient refrigeration management practices through its Better Plants program. During the training, plant managers and mechanics learned best practices for maintaining and controlling refrigerators in an energy-efficient way. Following the training, participants were empowered to identify specific cost-saving opportunities at their plant through an “energy treasure hunt” and then used an online calculator to estimate potential cost savings and develop a reduction plan.

Impact

One year after the training was offered, Tyson’s overall energy consumption has declined by 1.9% as a result of more efficient refrigeration practices, which adds up to a significant cost savings across their 150 US plants, particularly given the low cost of the program. The company’s energy savings have been negatively impacted by COVID-19, so Tyson expects to see even greater savings down the road. To create the buy-in needed to achieve these savings, Tyson’s sustainability team relied on strong relationships with the operations team and incorporated the program’s goals into group president’s performance evaluations and bonus structures, which helped to align incentives and gain buy-in.

“We want to get out the quasi-regulatory space for emissions and see sector-wide standards for accounting and reporting methodologies.”

Jamie Burr

Director of Sustainability Implementation

Danone Case Study

Empowering farmers to implement the abatement solutions that work best for them

Measurement

Over half of Danone’s emissions are from agriculture, so the company goes beyond the Scope 3 category of “purchased goods and services” to develop farm-level data on specific sources of emissions within agriculture. To do so, the company relies on close, direct relationships with farmers in their supplier network to gain their support in the data collection process. Some farmers conduct lifecycle analyses and share their data with Danone, and for those who do not, Danone uses the third-party Cool Farm Tool, an online calculator that helps farmers measure their emissions. For other companies measuring agricultural emissions, Danone recommends taking a similar approach of starting at the farm level and working backwards to the plants and other stages of the value chain.

Action

To reduce agricultural emissions from its supply chain, Danone focuses on empowering farmers to select and implement the abatement solutions that work best for them, rather than pushing a “banner project” with one solution across all farms. The company identified a set of regenerative agriculture practices that can be implemented on the farm and the presents them as a menu of options for farmers to select from. To make it attractive and easy for farmers to adopt these practices, Danone offers a suite of four tools:

  1. Funding: Farmers can apply to have a portion of the project paid for by Danone
  2. Grant Support: Danone streamlines the paperwork for USDA sustainability grant applications
  3. Insights: Danone offers analysis for farm-level data in the form of a consolidated report that farmers can share with creditors, buyers, and other stakeholders
  4. ROI Calculator: The tool combines academic insights with farm-specific data to help farmers estimate the long-term ROI of adopting different regenerative practices on their farm

Impact

Danone’s farmer-led initiative is new, but the flexibility it offers farmers has already led to better uptake than traditional projects focused on implementing the same solution across all farms. The resulting impact on the company’s Scope 3 emissions remains to be seen, but because there is such clear evidence linking adoption of regenerative practices to emissions reduction, Danone is focusing on adoption for now to prepare for greater impact at scale down the road.

“Having direct relationships with farmers is the base of all our agriculture abatement work. It allows us to give farmers the flexibility to select the solutions that work best for them.”

Jennifer Simpson

Senior Director, Agriculture

Microsoft Case Study

Developing a smart building management system that reduces energy and generates revenue

Measurement

For Microsoft, distinguishing between emissions from different business groups and product lines is not done just for the sake of building an emissions profile — it also enables the company to levy an internal carbon tax to fund its sustainability commitments. The tax provides incentives for internal leaders to reconfigure their products and processes to abate emissions from their business units. To measure downstream emissions such as Scope 3 use of sold products, Microsoft uses industry averages but is working on collecting telemetry data specific to Microsoft’s products to measure product-specific data in a cost-effective way, which will better reward product teams for reducing the energy consumption of their products.

Action

On-site electricity consumption from data centers and offices has been a persistent driver of the company’s overall emissions. To abate these emissions, Microsoft partnered with various hardware and software providers to design an analytical solution that connects their campus’ building management systems. The solution aggregates building data through IoT sensors and a centralized control dashboard.

Impact

Microsoft developed the idea for the building management system in 2012 and implemented it in 2013. By 2015, the project has already paid for itself through a nearly 20% reduction in energy consumption, including identifying a forgotten fan in a parking garage that was running 24/7 and cost the company $66k in just six months. In addition to energy, the solution helped drive improvements in meeting employees’ preferences for temperature and layout, which has helped to improve their daily experience and productivity. With the increase of wildfires in Washington, the ability to monitor and regulate air quality in offices has been critical. Microsoft’s initiative was so successful that it recognized an opportunity to sell similar building management solutions as a service to other companies, which has since blossomed into a full-fledged new business unit and revenue driver for the company, in addition to a solution for helping other companies reduce their emissions.

“Picking a solution that tied to our business capabilities helped unlock financial investment and senior executive support, and ultimately led to a new business.”

Michelle Lancaster

Director, Sustainability

Walmart Case Study

Developing a smart building management system that reduces energy consumption and generates revenue

Measurement

When Walmart set out to construct its emissions profile, three Scope 1 categories and one Scope 2 category naturally emerged — refrigeration, transportation, on-site fuels, and electricity. The results were striking; electricity represented more than 60% of total Scope 1 and 2 emissions. This provided the clarity and direction needed to prioritize abating emissions from electricity by launching a large-scale renewable energy project. Renewable energy scored highly against other evaluation criteria such as expected financial return, resilience, and reputational benefits, which made it a clear choice for implementation.

Action

To get started, Walmart relied on NGO partners who accelerated the project by endorsing the goal, helping build the case for investment, and providing connections to key partners for implementation, such as the Renewable Energy Buyers Alliance. Building the case for financial return helped gain leadership buy-in early, which came in the form of a public CEO commitment to 100% renewable energy and was key for building early momentum. The
Real Estate Team, reporting up to the VP of Energy, then got to work procuring Power Purchasing Agreements (PPA) from off-site wind and solar farms and installing on-site solar on the roofs of stores.

Impact

Walmart reached 36% renewable energy globally in 2020 and is on track to meet its targets of 50% by 2025 and 100% by 2035. As a result, the company has achieved consistent year-over-year reduction in its Scope 2 emissions. The significant emissions reduction gave Walmart’s leadership team the confidence to become the first-ever retailer to set a Science-Based Target, and the company has since updated the target from the 2° Celsius path to be in line with the 1.5° path, an even more ambitious goal. To extend the benefits of the project, Walmart recently rolled it out to its suppliers to provide them with an easy on-ramp for entering the renewable energy market. The program, called Gigaton PPA, will help smaller players coordinate to share a PPA, which are often large contracts, to reduce their emissions which are reported towards Walmart’s larger Project Gigaton goal of reducing one billion metric tons of CO2 e from its Scope 3 emissions by 2030.

“We all have to move faster on the switch to renewable energy. The contracts can seem complicated, but it’s easier than ever to enter the market right now.”

Zach Freeze

Senior Director of Strategic Initiatives, Sustainability

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