Thoughts on net zero
I am not an eco-warrior or a sustainability specialist, but I believe we all have a role to play in our fight against climate change and global warming. I therefore started working with a few colleagues at Onfido to research and propose a corporate net zero plan to the company’s executive team.
Less net, more zero
Using Watershed to measure our carbon footprint, we identified the key drivers towards our greenhouse gas emission, in particular our Scope 3 emission — emission from our supply chain connected with our purchases. However, settling on a set of impactful and yet achievable targets is hard, as there are so many unknowns. We eventually decided to align our targets with criteria set out by Science Based Target initiative (SBTi), which aims to limit global warming to below 1.5°C above pre-industrial levels. I really like their less net, more zero ethos, especially as our society is constantly being green-washed, and many businesses are overly relying on carbon credit to achieve so-called “net zero”.
Throughout my research, I have learnt a great deal about net zero. I am by no means an expert, but I would like to share my early thoughts on the topic.
The network effect
We product folks love the network effect. This idea behind net zero commitment is a great example. The value of being part of the “net zero” network will increase as the network grows.
Scope 3 emission accountability means companies will require their vendors to demonstrate their climate programs/commitments. As more companies get onboard with net zero, the pressure on vendors will increase, and net zero commitments will become a clear differentiator. Vendor commitments have the additional effect of helping other customers up the value chain with their own net zero commitments, which in turn increases pressure on other vendors. Net zero will soon become a must-have. All in all, this creates a very strong positive feedback loop within the market.
Every network needs a critical mass, and I truly believe we are on the cusp of reaching that critical mass now.
Renewable energy — a silver bullet?
My research seems to suggest that, as far as net zero is concerned, a massive focus is on shifting from fossil fuel usage to renewable energy. However, is renewable energy really a silver bullet? What is the carbon cost of manufacturing and decommissioning solar panels and wind turbines? There are measures such as the net energy ratio, which indicates the useful energy output to the grid to the fossil or nuclear energy consumed during the lifetime of the project, that can be used for calculating overall impact. However, how widely is this taken into consideration? Also, is over-focusing on renewable energy a good bet when there are also new emerging carbon capture or sequestration technologies?
This is obviously a very intricate topic beyond the scope of this article, but the key is we need to take a truly holistic approach in understanding how our energy consumption contributes to overall greenhouse gas emission.
Hybrid/remote working
The pandemic has resulted in the current trend of hybrid/remote working. Many companies are scaling down their office space, which can lead to less accountable greenhouse gas consumption. Reduction in employee commuting will no doubt also help with limiting greenhouse gas emission. However, the electricity and heating costs associated with employees working from home need to be part of a company’s overall greenhouse gas budget. When the line between home and work is increasingly being blurred, how can companies accurately and fairly measure these?
Enforceability
It is relatively easy to set targets when the consequence of not meeting them is unknown. Approaching 2030, 2040, 2050, what is going to happen when companies fall short of their promises? Following COP26, the UK has said it will require major firms and financial institutions to disclose their climate program by 2023. This is a good start. However, unless actual net zero commitment targets are legally binding and the process is regulated, how likely are we to see effective impact over the upcoming decades?
Love to hear your thoughts!
