Net zero emissions: Progress, setbacks, and what lies ahead

The Earth is already about 1.1°C warmer than it was in the late 1800s, and emissions are still rising. Reaching net zero targets has become increasingly important in order to limit the impact of climate change on ecosystems, businesses and communities around the world.

The goal of net zero emissions is to ensure the reduction of greenhouse gas emissions in order to meet global targets such as those set by the Paris Agreement. It involves reducing GHG emissions as much as possible and offsetting any remaining emissions as a last resort. With stricter climate rules and a growing demand for green practices, hitting net zero targets saves the planet and helps future-proof your business.

This blog looks at what net zero means, how companies are working towards these net zero goals, and the steps they should take.

What is net zero by 2050?

Net zero by 2050 is the global goal set by the Paris Agreement, a binding 2015 treaty signed by 196 countries to combat climate change. It involves achieving a balance where the amount of CO2 emissions produced is equal to the amount removed from the atmosphere. The aim is to limit global temperature rise to 1.5°C, align with Sustainable Development Goals (SDGs), and ensure universal energy access by 2030.

However, net zero differs from carbon neutrality as, according to the Corporate net zero standards set by the SBTi, the former focuses on reducing at least 90% of emissions through direct actions, only offsetting the final 10% with permanent removals, but carbon neutrality often relies heavily on carbon credits to balance emissions.

How is net zero different from carbon neutral?

Net zero targets: Are we on track?

Even though we’ve made some progress, we’re not on track to hit our net zero targets and a huge global effort across multiple sectors is required to see an improvement. For example, we need to reduce our reliance on coal power generation and cut emissions six times faster by 2030, while also speeding up efforts to stop deforestation 2.5 times faster.

There are some key areas on which we need to focus, including energy production, transportation and agriculture. The Intergovernmental Panel on Climate Change (IPCC) says zero-carbon sources must supply almost all electricity— 98% to 100% —by 2050 to keep global warming below 1.5°C.

In transportation, significant improvements are needed to advance public transport infrastructure and access and encourage the switch to cleaner fuels.

The agriculture sector also needs to change how it produces food, shift eating habits to more sustainable diets, and cut down on food waste. You can read more about climate change solutions here.

So what’s stopping us from reaching our net zero targets? Let’s uncover some of the challenges we face.

Challenges and shortcomings

Many countries and companies want to reach net zero goals, but they face several challenges:

• Total fossil emissions in 2023 rose to 36.8 billion metric tons of carbon dioxide. This shows that fossil fuels are firmly embedded in the energy system. Shifting to renewable sources demands large investments and new technologies which makes switching to renewable sources harder.
• In 2022, global renewable energy investment hit a record high but remains under a third of what's needed annually from 2023 to 2030.
• Emissions are still going up in some countries, like China, Russia, and the US. This makes it harder to reach our goals and close the gap between targets and real progress.
• There is not enough action taken on policies and international teamwork. This slows down progress.

The path forward

Right now, our current climate plans are falling short. Collectively, the climate pledges from 196 Parties to the Paris Agreement would lead to a nearly 9% rise in global greenhouse gas emissions by 2030 compared to 2010. To stick to the Paris Agreement and keep warming to 1.5°C, emissions should be slashed by 45% by 2030 and hit net zero by 2050.

To rectify this, governments, especially the largest emitters, must enhance their Nationally Determined Contributions (NDCs). They need to set meaningful regulations, invest more in green technologies, and collaborate globally to get back on track.

What do companies need to do to achieve net zero emissions?

Companies should set short-term goals to cut emissions and link them with their long-term net zero plans. This helps create a clear path that balances quick improvements with big, lasting changes. Here’s what companies need to do:

Accelerate the shift to renewable energy

Switching to renewable energy like wind, solar, and hydropower helps lower greenhouse gas emissions. To cut reliance on fossil fuels, companies should:

• Invest in renewable energy infrastructure like wind and solar
• Upgrade to green energy technologies and practices
• Develop onsite renewable projects
• Implement energy-saving measures in operations

Boost energy efficiency

Improving energy efficiency means using less energy while still getting the same amount of work done. This can be achieved through:

• Upgrading to energy-efficient equipment
• Implementing advanced building insulation
• Optimizing lighting systems
• Adopting smart energy management systems
• Improving process automation and controls

This leads to reduced energy consumption and lower emissions.

Adopt circular economy practices

The circular economy aims to cut down waste by reusing, fixing, and recycling. To reduce waste and lower emissions associated with manufacturing and disposal, companies can:

• Use sustainable materials and minimize resource consumption
• Implement take-back programs for product recovery and recycling
• Promote repair and refurbishment to extend product life

 Combat deforestation

Protecting and restoring forests helps trap and store carbon. Companies should:

• Ensure supply chains do not contribute to forest loss
• Support large-scale tree planting initiatives
•  Use certified sustainable wood and paper products

5 essential steps for businesses to achieve net zero emissions

 Achieving net zero emissions is a critical goal for companies aiming to combat climate change and promote sustainable practices. Companies can take the following steps to help meet these targets:

Step 1: Understand baseline emissions

Measuring baseline emissions allows you to get an overview of where you stand so you can identify emission hotspots and go on to set targets and goals. It includes measuring and understanding:

• Direct emissions (scope 1)
• Indirect emissions from purchased energy (scope 2)
• Emissions across the value chain (scope 3)

Without this data, companies can't plan or track their progress toward net zero.

Step 2: Detailed target setting

After figuring out their current emissions, companies should set clear, research-backed goals.

Companies should adhere to the Corporate Net Zero Standard, setting ambitious five- to ten-year targets for significant and swift emission reductions throughout their value chains. Small and medium-sized enterprises (SMEs) can join the SME Climate Hub. It offers a customized pathway for setting net zero targets.

Step 3: Incorporate net zero goals into business strategy

Every team—from operations to procurement—must follow climate goals. This means rethinking capital investment strategies, focusing on green innovations, and updating buying procurement policies to choose eco-friendly suppliers.

For example, car makers Volvo, Daimler, and the Traton Group are working together on a €500 million project to build more than 1,700 green energy charging stations along highways. Furthermore, companies like IKEA are giving their product designs a major eco-makeover. With IKEA’s circular design guide, designers are figuring out how to make products that are easy to recycle, repair, and reuse.

Step 4: Stay compliant with regulations

Following environmental regulations is important because more countries are setting tougher carbon policies. For example, the European Union’s Green Deal requires companies to share their carbon footprint. In the US, companies must report emissions under SEC climate rules, and many countries like Australia and Malaysia have implemented further ESG Reporting rules.

Keeping up with the ever evolving regulations helps companies avoid fines, maintain their reputation and contribute to meaningful climate progress.

Step 5: Digital transformation for sustainability

Investing in an end-to-end ESG platform, such as Zuno Carbon, is key for reaching net zero emission goals. These tools help companies measure and manage greenhouse gas emissions across Scopes 1, 2, and 3 and track Social and Governance metrics to give clear and accurate data. Companies can use digital sustainability solutions to produce sustainability reports aligned with global frameworks and set clear and transparent decarbonization goals.

‍

Achieving net zero emissions by 2050 is crucial for keeping the impacts of climate change at bay. While there will be bumps along the road, with more investment, new ideas, and global cooperation, we can get there.

For businesses, targeting net zero goes beyond saving the planet, it also contributes to growth and efficiency. Working towards these goals will help us move towards a more sustainable future.

Zuno Carbon offers an all-in-one ESG solution that helps companies easily measure, report, and track their ESG metrics. Our platform helps you navigate the ESG landscape with tools that simplify data collection and boost transparency.

Curious to see how Zuno Carbon works? Request a demo!

Frequently Asked Questions (FAQs)

What is the meaning of net zero emissions?

Net zero emissions involves reducing GHG emissions, and balancing the amount of emissions released into the atmosphere with those removed from the atmosphere. To do this, we need to reduce our emissions substantially and balance out any leftover gases using carbon capture methods. The focus is on cutting down emissions directly, rather than dependence on carbon credits.

What is a net zero target?

A net zero target means a company, country, or group promises to have no net emissions by a certain date and works to cut their greenhouse gas emissions as much as possible. Any remaining emissions are balanced out. These efforts help meet global climate goals.

‍