Learning the Path to Net Zero Operations

Making Net Zero Improvements

The percentage of companies declaring a net-zero target almost doubled between 2019 and 2020. However, as of July 2021, only 10% of the world’s publicly listed companies have aligned with global temperature goals. The United Nations Framework Convention on Climate Change has called for global greenhouse gas emissions to reach net zero by the middle of this century. Therefore, companies need to take action to ensure they are aligning with global temperature goals and are on track to achieving net zero emissions by 2050. There are four steps that can be taken to achieve this environmental goal:

1. Define targets: Companies should set clear targets for reducing their greenhouse gas emissions and work to align their goals with global temperature goals
2. Set strategy: They also should develop a clear strategy for achieving their targets, including identifying opportunities to reduce emissions across their operations and supply chains
3. Implement: As manufacturers implement their strategy, they should find ways to reduce emissions, such as investing in renewable energy; improving energy efficiency; and transitioning to low-carbon energy sources
4. Publish and track progress: To measure performance, companies should publicly report on their progress towards their targets and regularly track and evaluate their strategies to serve as a basis for improvements

Although the world has made progress toward cleaner energy, the use of fossil fuels is also expanding to meet the growing demand for energy. Global energy-related emissions have increased in the past decade, and the share of primary energy from fossil fuels has remained largely unchanged. According to McKinsey & Co., the net-zero transition requires steep and decisive declines in fossil-fuel consumption, but the role of fossil fuels cannot be oversimplified given the continued reliance.