After Circularity and Regenerative, we’re right onto the next term in the game of buzzword bingo: Net Zero.
Now, don’t get me wrong: The goal itself – getting to a net zero carbon balance at the very least, and all that on nothing longer than a 2040 trajectory – is a must for every business.
But.
Right now everyone, everything, seems to talk about wanting to be come ‘climate neutral’ (another one of the buzzwords), and consequently their commitment to become ‘net zero’.
Even if in many (most?) cases the associated time trajectory is not in line with the requirements set out by the Intergovernmental Panel on Climate Chang (IPCC).
Net Zero: There must be science behind the science
The trouble with the public ‘Net Zero’ statements is:
- hardly any company exactly knows how to get there in reality – for a lack of homework done.
- technologies that allow such a feat, and on the required time trajectory, exist, but are not commercially scaled at the moment.
Or in business slang: their current ROI and/or pay back periods do not make them investable, and hence ‘usable’. - very few companies have either the specialists and or the scientific rigour (or both) in place allowing them to have a clear view on
- the scale of the impact reduction in their business that is really required (notably in Scope 3).
- the viable and not yet viable components required for their very specific trajectory.
- different pathways options to get there, and hence how to navigate the various uncertainties in their trajectory (technology being a key one).
In other words: While the very first companies that did commit to ‘net zero’, for instance via the Science Based Target initiative, clearly knew about the challenges involved, and had spent time and money to figure their path out, this is not necessarily the case any more in the present.
There is a lot of piggy backing going on, based on the hope that ‘what worked for others will work for us’.
This hope is of course not entirely in vain. Indeed, more and more ‘case studies’ become available. And as economies of scale start to kick in, indeed some of the technologies become cheaper by the day, carbon capture being one of them.
And yet – I fear that in an increasing number of cases the challenge is underestimated: companies hope that external resources will tie them over the internal knowledge and experience gap.
A commitment to the net zero trajectory – indeed to any trajectory of this extent – should not, ever, be underestimated. Even if it must be undertaken voluntarily or not.
Climate Pragmatism vs Viability: The Maersk case
Take as example the Maersk Group, who owns a good number of the world’s largest cargo ships.
They have made a net zero commitment towards a 2050 timeline (a timeline in principle already not deemed suitable by the IPCC).
Interestingly, and given the longevity of ships, this commitment means that nearly all ships they plan to launch as from 2025 will already have to be equipped with the low carbon technology required to achieve their commitments.
Maybe more interesting still: such technology did not exist when John Kornerup Bang, Maersk’s Head of Sustainability Strategy and Climate Strategy, was interviewed in a podcast in early 2019.
As John Kornerup says in the above interview: they were in 2019 not sure if it would be feasible. But they were ready to do what it takes to get there – very much aware of the investments that this may potentially mean.
… and what about Boards?
As if the above was not challenging enough, once we look at boards it does not get better.
With the Chapter Zero movement – initiated by the World Economic Forum – a vessel has been created through which boards are encouraged, and ideally also educated, to contribute and engage in this discussion.
This is good news.
The bad news: the knowledge and experience gap at board level is significantly bigger than it is even at corporate operations level. It’s more: most board directors lack fundamental scientific and technical understanding of the challenges ahead.
It certainly does not help that there are barely a couple of tools that would help board directors to live their fiduciary duty in this regard.
The dashboard of the 23 dimensions from the Future Fit Business Benchmark is possibly the most trialled and tested among them, and even so it requires companies to IT it themselves.
It does not help either that most directors are stuck, voluntarily or otherwise, in the traditional ‘growth’ and ‘ROI’ thinking, and dare not to venture beyond it to explore additional (not! alternative – for now) aspects.
With all that said.
Net Zero should be every where indeed.
Just not in the way it happens right now: namely, as a mere wave to ride so as to catch the next press release headline.
