Net zero: What does it mean for your organisation?
10th August 2021
The term “net zero” is one we hear with growing frequency as part of the climate change conversation. It’s vital that businesses understand what it means and how they can work towards it.
Net zero refers to achieving a balance between the greenhouse gas (GHG) emissions produced and the amount removed from the atmosphere. The net zero concept incorporates all greenhouse gases, but predominately focuses on the most widespread, and one of the most harmful: carbon dioxide (CO2).
As a business, net zero is achieved by balancing your carbon emissions with techniques that remove CO2 from the atmosphere, such as carbon offsetting. The first step to achieving this is by reducing your CO2 emissions. Or, where possible, cutting CO2 emissions altogether.
Gross zero would mean eliminating all emissions in a country, industry or business. However, in some crucial industries, such as agriculture or aviation, completely removing all emissions is hugely difficult, especially given the short timeframe in which industries need to decarbonise to avert the worst impact of climate change.
Negative emissions are now an embraced concept too. One step further than gross zero, negative emissions is where the calculation of your total carbon emissions comes to a negative figure. Leading organisations such as Drax have set carbon negative targets based on using special technologies such as bioenergy with carbon capture use and storage (BECCS) to proactively remove CO2 from the atmosphere.
By reducing emissions as much as possible, as well as removing them from the atmosphere, a growing number of economies – including the UK, the US, and the EU – aim to be net zero by 2050. UK businesses have an important role to play in this and committing to a net zero strategy is not only positive for the planet, but also for your company.
Why businesses must consider net zero
Central to adopting a net zero strategy is, of course, the environment. Companies can reduce their global GHG emissions and help combat climate change. But there are also other reasons why it’s beneficial for your business:
Futureproof your organisation
With the world transitioning to a net zero economy, investors and potential partners increasingly look for signs that businesses are futureproofing themselves. Embracing that change and preparing for a future with stricter environmental regulations means a net zero approach is not just good environmental policy, it’s good for business resilience too.
Build brand strength and profitability
Building a reputation as a company that cares about the impact its activities have on the environment also matters – for brand strength and for profitability. Last year, 50% of respondents to a survey of 10,000 people said they only buy products from brands that try to be eco-friendly. Consumers are increasingly savvy about when corporate declarations are merely that – declarations – so any pledges your company makes about a net zero strategy needs to be backed up by action.
Attract and retain talent
It’s not just consumers who prefer businesses that show environmental responsibility, the same applies to many jobseekers, particularly younger demographics. Research shows that millennial applicants are, on the whole, more likely to accept a job with and remain loyal to a company they view as caring about its effect on the environment. This trend is even more pronounced among Gen Z applicants.
How you can work towards net zero
Energy audits
Crucially, putting net zero objectives in place can also cut costs for businesses. A key example is energy audits. Such processes are compulsory for businesses in the UK with more than 250 employees or an annual turnover in excess of £44 million. But they’re also a good idea for smaller companies that are not legally required to carry them out.
An energy audit offers the opportunity to assess your energy usage, determine where energy may be wasted, and implement measures to drive energy efficiencies. This can allow you to reduce your business’s carbon emissions, especially if your energy does not come from renewable sources. It could also reduce your energy bill.
Switching to renewable source electricity
Switching to renewable energy is a fundamental way for businesses to progress towards net zero. The average energy supplier sources just 38% of their electricity from renewable sources, so it pays to know where your energy comes from.
Generate your own renewable power
You could go one step further and generate your own renewable energy. For businesses with the resources – including space and investment ability – this may include installing wind turbines or photovoltaic solar panels.
In addition to the environmental benefit of generating your own low-carbon energy, it also has the potential to reduce costs and even drive revenue. By adding battery storage, your business can store excess energy for future use and avoid buying electricity at costly peak times. Battery storage also enables the business to sell surplus energy back to the grid through power purchase agreements (PPAs) – offering an additional source of revenue.
Electrify your fleet
Another aspect to consider is moving your business to an electric vehicle (EV) fleet, as electric cars emit zero tailpipe emissions. While they are typically more expensive to buy, lower running and maintenance costs and the availability of government grants and tax incentives, means EVs often prove more cost-effective in the long run.
Working towards net zero is beneficial both for your business and for the environment, but there are many elements to consider. From help finding the right renewable energy supplier or generating your own renewable energy, to managing the transition to an EV fleet; it’s important to have the right energy partner.
At Drax, we have the knowledge to support your business in achieving net zero. Contact us to find out more about how our team can help.
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