With 5 years Left Until 2030, the Era of Net Zero Implementation is Here

By: Jane Eisenhardt

Wrapping up Baku and the message for business is clear: we are officially in the era of implementation.  

Over the past four years, a growing wave of companies, cities, states and financial institutions made ambitious climate commitments. Since COP26 in Glasgow, over 15,500 entities committed to net zero through the Race to Zero, the vast majority of which are businesses. But pledges only count for so much without actual emission reductions, which is why a shift in the voluntary movement – from commitments to action – is more important than ever.  

Corporate climate progress has steadily increased globally. Environmental Defense Fund’s latest analysis, The Net Zero Opportunity: Harnessing Business Ingenuity for Continuity and Resiliency in a Changing Climate shows that business has been driving the demand for clean energy and integrating climate into their core business practices. In response to growing demand from consumers and new technologies, companies are adopting circular economy policies to change the way we make products. Circular strategies and collaboration between buyers and suppliers have resulted in 43 million tonnes of GHG savings – that’s equivalent to Sweden’s annual emissions. Voluntary action from the corporate sector remains a key priority for climate implementation. 

Progress on climate targets is certainly no small feat, and many hurdles to implementation still remain. But on the ground in Baku, businesses have not only shown that it is possible, they have also highlighted the business case for value generation. From building business resiliency, to retaining employees, to driving down costs – the co-benefits from climate action are simply smart business. As Jesper Bodin (Ingka) puts it, “climate smart is cost smart”, and companies across the world have been seeing real gains from acting on climate. Here are their main takeaways: 

1. Energy: switching to renewable energy and increasing efficiency has been a huge driver in cutting down corporate scope 1 and 2 emissions, while also making operations more resilient and providing energy security for the future.  
2. Working with Supply Chains: Scope 3 is a beast and continues to be one of the biggest barriers to reaching climate goals. Companies that have successfully reduced emissions across their value chain have taken collaborative approaches that focus on engaging their suppliers, ensuring they build partnerships and capacity to reduce emissions across the value chain.  
3. Climate Solutions: Climate solutions that replace high-emission activities with low- or zero-emission alternatives are essential for decarbonization. Companies have a huge role to play in designing products and services for the future and can lead the way in deploying solutions that move the world away from fossil fuels and contribute to society-wide emission reductions.  

Companies have always been innovators, problem solvers, and future forward thinkers. As we face the most wicked problem of our lifetime, the world needs to harness the power of business to design and scale the solutions we need to reach our global climate goals, while designing business practices and products for a healthy society that can sustain far into the future.