By Tom Ayerst, Bristol Market Senior Partner
The term net zero has become synonymous with businesses and governments taking action to protect the planet. The need to limit global warming to no more than 1.5°C is vital to protect human health and economic growth. To do so will require rapid and radical transformation of every sector of the global economy - halving global emissions by 2030 and reaching ‘net zero’ carbon emissions by 2050. Our Net Zero Economy Index charts what needs to happen to keep global warming within 1.5°C.
At PwC, we’ve been carbon neutral since 2007 and decoupled our carbon emissions from our revenue growth between 2007 and 2020. In particular we’ve also reduced the carbon footprint of our direct operations (what’s known as scope 1 and 2) by 94% and of our total emissions (including travel, waste and key items procured) by almost 60% - in line with the decarbonisation goals set in the global Paris Agreement in 2015. You can read more about how we achieved this here.
As a professional services firm, however, the carbon emissions from our own operations are relatively low (mostly offices and business travel), and so we have been working with our suppliers whose emissions are many times bigger (scope 3). We’re always keen to hear about what environmental pledges and net-zero commitments businesses in the West & Wales have made, so we recently held a net zero virtual roundtable for more than 30 clients in the region to share their thinking and best practices.
Like so much of business, it’s clear that the pandemic has had an effect on net zero thinking. With more businesses enabling their people to work from home more, the relationship with the office changes - and bringing people back into the office has big carbon implications. The same applies to business travel, or in a regional university’s case, their students flying in from around the world to study there.
This is also a staff engagement issue. The university’s policies were at least in part being driven by the ambitions and expectations of their students in this area. In PwC, it’s the same - we are one of the largest graduate employers in the UK and students tell us that they want us to work with companies that focus on climate and sustainability. And in internal feedback forums, our people let us know where we need to focus as a business, and net zero regularly appears.
For some, such as the construction industry, net zero is not yet a key differentiator; others are looking beyond net zero to negative zero, where more carbon is removed from the atmosphere and stored than is emitted into the atmosphere. There was a clear recognition that whatever angle you come at net zero from, getting it right is a huge undertaking.
Helping businesses take the first step
Lots of businesses are looking at having a net zero strategy but to do it properly takes a lot of time and planning to integrate that into day-to-day operations. Businesses shouldn't underestimate this. There are three elements to a business’ credible net zero commitment:
Fully decarbonise your footprint within a specified timeframe then remove remaining emissions from the atmosphere (this is a step further than offsetting).
Encourage your suppliers and clients to pursue net zero.
Play an advocacy role, to accelerate the broader market transition to a net-zero economy.
As we have found ourselves, delivering against scope 1 and 2 is the more straightforward element as it's within a business’ control; scope 3 relating to suppliers, is more of an undertaking. It could be that an alternative supplier is needed or a product needs to be reengineered to be neutral. Whatever it is, it takes time and a commitment. The alternative is that without a commitment to net zero, companies or organisations run the risk of not being people that others want to do business with in future.
Our pledge to the planet
We have committed as a global firm to reaching net zero greenhouse gas emissions by 2030. We will continue to make changes to how we operate by switching to 100% renewable energy, making our offices more energy efficient, reducing air travel, enabling more remote and on-site working, and investing in carbon-removal projects after 2030. We will continue to decarbonise our supply chain and help to shape and accelerate the global climate and policy agenda. But a big part of how we will achieve our goal is by working with our clients, supporting them as they develop and implement concrete plans.
Our Advisory teams can provide insights about climate risks and opportunities, helping to transform business processes. Our Assurance team can help integrate climate-related and other ESG-related factors into mainstream corporate disclosures and governance. There will be obligations, revenue impacts, strategy considerations and incentive opportunities that our Tax team can help you with. But it’s not just big businesses - businesses of every shape and size should be considering what they need to do.
The business community has a big part to play in delivering on our net zero obligations. We can help you make a start towards a better tomorrow today.