An increasing number of businesses are looking to reduce their emissions and become sustainable to align with the government’s net zero strategy. Setting targets is crucial for companies with complexity across sectors, technologies and business structures. However, this is often the easy part, according to the latest insight paper from Cornwall Insight and UK law firm Shoosmiths – Unlocking net zero strategies for businesses.
The report explores the potential routes to decarbonisation that businesses have at their disposal to meet their targets and help countries meet their net zero targets.
Key findings of the report:
- Pressure for businesses to adopt net zero is both bottom-up and top-down
- Successful approaches will be shaped by location, scale, and exposure to different vectors.
- Best practice sharing and cooperation may unlock faster progress.
- Green supply is attractive but beware of greenwashing
- On-site generation works for businesses with physical space and access to up-front capital.
- Corporate PPAs are for creditworthy businesses, but the market is ripe for innovative partnerships
- Businesses need to be assertive and proactive
Achieving net zero is a collective journey
A coordinated whole system approach is key to reaching net zero. Governments should provide a stable and specific regulatory environment, providing the private sector with the certainty needed to make long-term investment decisions.
However, all businesses have essential responsibilities. Large corporates can lead by example, showing concrete decarbonisation paths to their suppliers to drive change. An open dialogue is fundamental so that companies can properly support each other in their net zero journeys.
James Wood-Robertson, Partner and Head of the Energy and Infrastructure Practice at Shoosmiths, said: “Companies have a duty – both legally and morally – to take measures in relation to limiting global warming. Moreover, there is an increasing commercial imperative – with potentially serious consequences from a commercial perspective if they do not act.
“While the rising consumer demand for cleaner and more eco-friendly products and services is a factor, it is the rapidly growing number of public bodies and companies setting out their own net zero commitments – and consequently looking to reduce their greenhouse gas emissions through their supply chains – that will truly accelerate change.
“If companies don’t get on board with reducing emissions, they are likely to find their customers are soon demanding that they do so.”
Kate Hill, Lead Research Analyst at Cornwall Insight, said: “Businesses are facing pressure from all angles to ensure they embark on their net zero journeys and incorporate environmental, social and governance (ESG) considerations into their strategies. The transition process will be different for each business, and as such, the options available vary according to size, location and business operation.
“However, every business will need to conduct an honest appraisal of where it is on its net zero journey, explore the multiple available solutions and then make appropriate decisions.
“Overall, there is an urgent need for collaboration among businesses, as net zero cannot be achieved in isolation. The involvement of stakeholders by actively engaging with investors, customers, and suppliers, is essential.”
The full insight paper can be downloaded free of charge here.