10 Steps to Becoming a Carbon Neutral Business

Page 4 Having made the decision to go carbon neutral, the first thing you need to do is to clearly define your ambition level. There are three main factors that will influence how your carbon neutrality pledge plays out: the extent of emissions you are including, your timeline and the resources you have available to put into it. Together with your chosen strategy (see Step 4 “Define the strategy”), the choices you make on these three aspects will determine how ambitious your pledge is and the course you will need to take to reduce your carbon footprint to zero. / Which emissions to include A carbon neutrality pledge needs a defined emissions boundary or limit stating which emissions it includes and which it excludes. To be carbon neutral you will have to reduce and offset all the emissions you include in your pledge. The emissions you exclude are disregarded in terms of your pledge, but will of course still be generated and exist. / Life-cycle approach At the very ambitious end of the spectrum is the full life-cycle perspective which is also the starting point for setting Science Based Targets. This approach means you take responsibility for all the direct and indirect emissions related to your product, from raw materials, manufacture, transport, storage, sale, use and disposal. This is a comprehensive approach requiring considerable resources and knowledge of your value chain and the emissions it generates. When companies pursue this route, they often need to set the deadline well into the future as it is both time-consuming and sometimes complex to understand. According to the Greenhouse Gas Protocol - the world’s most widely used greenhouse gas accounting standards - emissions are classified as Scope 1 (direct), Scope 2 (energy indirect) or Scope 3 (other indirect) emissions, depending on the level of control your company has over these emissions. What may be indirect emissions for your company can be direct emissions for others. Waste disposal, for example, is a Scope 3 emission for your company. For the waste contractor, on the other hand, disposing of waste is considered a direct emission source. The life-cycle approach may therefore mean that you are contributing to ‘double counting’ as other players in the value chain might also be working to eliminate or compensate for the emissions they are causing. If every company only accounted for their direct emissions, there would be no double counting. However, if the waste disposal contractor in the above example also commits to offsetting its carbon emissions, together you will be offsetting more emissions than you cause, going beyond being carbon neutral to being “carbon positive”. It often makes sense to share the burden, though, by engaging your suppliers and customers to address their own impact. This way, you are creating a network of companies that jointly work towards carbon neutrality throughout your value chain. STEP 01: DEFINE YOUR AMBITION Define your ambition STEP 01