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Five Challenges Organizations Face on their Path to Net Zero

Sept. 5, 2023
As more companies and governments participate in the carbon emissions challenge, many of them are facing new headwinds as they work toward their net zero goals.

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Net zero is a state that will be achieved when all emissions released by human activities are counterbalanced by removing carbon from the atmosphere in a process known as carbon removal. Getting there necessitates a two-part approach: First, all human-generated emissions will be reduced to as close to zero as possible, then any remaining emissions will be “balanced” with an equivalent amount of carbon removal.

Over the last decade, a growing number of governments, organizations and individuals have laid out their net zero pledges. By the United Nations’ estimates, more than 70 countries have set a net zero target. Over 3,000 businesses and financial institutions are working to reduce their emissions, it adds, and more than 1,000 cities, 1,000 educational institutions and over 400 financial institutions have pledged to take “rigorous, immediate action” to cut global emissions in half by 2030.

Despite their obvious momentum, net zero pledges often fall short of the Paris Agreement requirements. The agreement’s overarching goal is to hold the increase in the global average temperature to well below 2°C above pre-industrial levels and pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels. The Paris Agreement was adopted by 196 parties in 2015.

“Commitments made by governments to date fall far short of what is required,” the UN points out, noting that current national climate plans would actually lead to a sizable increase of almost 11% in GHG emissions by 2030 (compared to 2010 levels). “Getting to net zero requires all governments—first and foremost the biggest emitters—to significantly strengthen their Nationally Determined Contributions (NDCs) and take bold, immediate steps towards reducing emissions now,” the UN advises.

Five Potential Roadblocks on the Path to Net Zero

Here are five roadblocks that organizations and/or governments may face as they work toward achieving their net zero goals:

  1. Putting plans into action isn’t as straightforward as it looks. Many companies that have set ambitious net zero strategies are now finding it difficult to actually embed these strategies throughout their company’s operations and implement real change, Environment Analyst states. “No matter the size of your company, climate change will disrupt your business systems and affect your bottom line. Forward-looking companies are already implementing their net zero strategies and identifying the transitions they will need to go through to achieve them.”
  2. Net zero decisions have to be interrelated and holistic in nature. Achieving net zero is a business imperative that forces companies to take a holistic and unprecedented approach to their decision-making processes. This isn’t always easy to do, but it’s a critical step. “The goal of achieving net zero will influence your operations, procurement, HR, sales, sustainability and leadership teams,” Environment Analyst points out. “There are few net zero related decisions that are made by one team that will not influence another.”
  3. Some organizations may need complete overhauls. In Forbes, Global Citizen’s Michael Sheldrick discusses how simply buying green electricity won't be enough for certain types of companies (i.e., banks or energy companies), to meet their net zero targets. “They'll need to change their products, like how they structure their investment portfolios or lending practices,” he writes. “In some cases, some companies may require a complete overhaul of their business model and operations.”
  4. It takes a village. Reducing carbon emissions isn’t something that one company or government can achieve on its own. For example, Environmental Protection says that while the U.S. government sets initiatives to increase the production and acceptance of electric vehicles (EVs), the current state of the national and global economy has limited consumers’ interest in buying new EVs. “Inflation has dramatically increased the cost of living, and people are more likely to save money to focus on purchasing essential goods,” the publication notes. “This has slowed down the acceptance of EVs and renewable energy sources.”
  5.  Monitoring, tracking and reporting requires a heavy lift. Data is available from countries that show how much they have reduced their carbon emissions, but monitoring how those countries achieve those numbers and regulating their methods takes work. “Most nations’ reports only focus on the current amount of emissions, but not which part of the country was responsible,” Environmental Protection reports. “For example, a city with particularly high carbon emissions can increase its reduction numbers by helping another lower its emissions.” And while this may help reduce the country’s overall emissions overall, “one municipality is merely helping another while doing nothing to curb its own.”

Don’t Get Left Behind

As more organizations develop climate pledges, many of them will face challenges in meeting those net zero targets. In many cases, breaking through those roadblocks will require a transformation in various aspects of their operations. “Effective management practices and performance benchmarks will vary depending on the industry, and will require significant leadership buy-in from those with high scope 3 emissions,” Sheldrick concludes. “Notwithstanding pushback in some quarters, pressure from consumers, investors, and regulators is increasing, and companies risk being left behind if they fail to act now.”

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About the Author

Bridget McCrea | Contributing Writer | Supply Chain Connect

Bridget McCrea is a freelance writer who covers business and technology for various publications.