Climate Change is in the Mainstream: Demystifying Carbon Neutrality ought to be our Theme

16 February, 2022

Carbon dioxide emissions in the atmosphere from burning fossil fuels like oil, coal, and gas is a cause of concern resulting in climate change and an increase in global temperatures. In order to limit the above concerns, carbon neutrality is the need of the hour. In simple terms, carbon neutrality means maintaining a balance between emitted and absorbed carbon or elimination of carbon emissions.

Carbon neutrality becomes vital to achieving sustainability goals and as a result, moving a step nearer towards a green future and aid in achieving climate mitigation. Carbon neutrality is also in line with Paris Agreement , which sets out the aim to limit global warming to below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels. Attaining carbon neutrality requires the world to both rapidly reduce greenhouse-gas (GHG) emissions and also preserve, regenerate, and develop the natural and man-made stores of greenhouse gases to balance all that cannot be reduced.

Identifying Significant Steps to Move Towards Carbon Neutrality:

Corporates and a few governments across the world are setting up targets to become “carbon neutral”. Already, 74 countries—accounting for more than 80 percent of global GDP and almost 70 percent of global CO2 emissions—have put net-zero commitments in place, Bhutan  and  Suriname have already achieved it. More than 3,000 companies have made net-zero commitments as part of the United Nation’s “Race to Zero” campaign. Microsoft has taken a pledge to become carbon negative by 2030 and subsequently detailed out a plan to reduce the carbon emissions including their supply chain as well.

But moving from commitments to action would not be straightforward or easy. Transforming technologies—across power, mobility, industry, buildings, agricultural, forestry, and land-use systems—will be essential to scale back global emissions.

More essentially, low- and zero-carbon technologies would need to be developed, tested, improved, and made cost-effective.

  1. Setting up the Goals:

    First and foremost is to outline the organizational goals to be carbon neutral for the next 10 or 15 years. Potential changes can enable organizations to prepare for what is to come and to define their own role in shaping the transition: the actions they need to take to adapt, decarbonize, and thrive in a net-zero economy. Goals might relate to greenhouse gas reduction, fuel efficiency, waste reduction, etc. Post determination of the business goals setting up the type of emissions (scope 1, scope 2, scope 3) to account for can be decided at the corporate level. As per the US Environmental Protection Agency (US EPA);

    • Scope 1 emissions are direct greenhouse (GHG) emissions that occur from sources that are controlled or owned by an organization (e.g., emissions associated with fuel combustion in boilers, furnaces, company vehicles).

    • Scope 2 emissions are indirect GHG emissions associated with the purchase of electricity, steam, heat, or cooling. These emissions occur as a result of the organization’s energy use.

    • Scope 3 emissions are the result of activities from assets not owned or controlled by the reporting organization, but the organization indirectly impacts its value chain.

    Roadmaps that are built on the scale of technology build-up are needed for setting the targets.

  2. Curbing the Carbon Emissions:

    Once the goals and targets are set, then corporates would need to implement actions and operational transformations to implement low-emission technologies, identify emitting assets, and engage with suppliers to manage their emissions. Contemplating the activities organizations can take to reduce emissions and developing implementation plans in line with the carbon neutrality targets set such as:

    • Energy Efficiency as a part of design and operations

      • ENERGY STAR labelling of products can be considered – In the process of working towards its net-zero target, Yes Bank has moved to energy star-rated appliances and machines.

      • LED lights – As a part of a government initiative; In Karnal, Haryana - 25,000 smart and Energy-efficient LED lights were installed which will help to have an energy saving of up to 60%.

      • On-site and/or off-site renewable energy (investing in Renewable Energy Certificates-RECs) – Walmart has about 150 MW of solar PV installed across their facilities which contributes to nearly 25% of their total energy consumption.

      • HVAC systems – Heating, Ventilation and Air Conditioning (HVAC) systems in a building account for more than 40% of total energy consumption. Current HVAC technologies can help in attaining energy-efficiency and enhance environmental performance, as a result bring off an energy-saving of nearly 30%.

      The above alternatives along with the applicable sensor controls can help organizations in lowering their energy bills, which in turn, will curb carbon emissions.

    • Decarbonizing the vehicle fleet by moving to electric ones – As per an Economic Times report , India’s leading steel and cement companies are increasingly leaning on electric vehicles (EV) for their transportation and mining needs, Tata Steel deployed EVs for steel transport.

    • Supply Chain - Organizations that aim towards reducing the Scope 3 emissions as well require accountability for the processes throughout the company’s supply chain. Engaging with the suppliers to take initiatives for managing or reducing their own emission sources can contribute to reducing scope 3 emissions.

    • Carbon Offsetting: Corporates can engage in purchasing carbon offsets. Offsets help in balancing the carbon footprint, thereby aiding the environmental projects that reduce greenhouse gases in the atmosphere.

  3. Tracking the Progress:

    Standards would need to be supported by appropriate tracking mechanisms to ensure progress is being made. Performance towards carbon neutrality can be assessed or tracked by Companies with the help of third-party verifications and commitments such as

    • RE100 – Renewable Energy for 100% of electricity consumption

    • SBTi – VMware, a software company also committed to carbon neutrality and RE100 as well as have set the science-based targets, approved by SBTi. This resulted in a 46% reduction in their emissions in 2019.

    • Global Reporting Initiative (GRI) - Many corporates viz., Wipro, Infosys, TCS, ITC, etc. are already performing GRI-based Sustainability Reporting.

The Road Ahead:

Monitoring and reducing carbon emissions, sustainability performance management to achieve carbon neutrality can facilitate businesses stay ahead of their competitors and make a sustainable business shift. Organizations need to deploy low- and zero-carbon technologies, all stakeholders to play a role and must begin their journey. Organizations ought to measure their Scope 1, 2, and 3 emissions and put in place approaches to track and trace emissions across supply chains. New forms of data and analytical tools—to granularly assess their exposure to risks and opportunities and manage the sustainability journey would be required. There is already an accelerating action in certain sectors, financial institutions are also coming together to set commitments to climate finance and carbon neutrality. Corporates should perceive the basics of climate science and consequently work towards transition; identify and assess the risks and establish decarbonization goals accordingly. With technological innovation, organizations committed to carbon neutrality can seemingly gain momentum.

-Khushbu Pandit is a part of the Consulting team and heading the Pre-Sales department at Treeni. She has worked in the field of energy, environment and Green Buildings and assisted clients to build the sustainability roadmap and attain environmental certifications.