Net zero emissions? It’s time to embrace carbon negative
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Despite the big push toward net zero, greenhouse gas levels in Earth’s atmosphere are skyrocketing. The climate crisis is no longer a distant threat, and it is time to challenge conventional thinking.
Net-negative emissions are the answer — and boards of directors across all industries and businesses must spearhead the movement.
The combustion of fossil fuels is increasing year on year. Likewise, the construction of data centers is intensifying, resulting in further carbon emissions.
At the end of last year, a report predicted that the global data-center industry would emit 2.5 billion tonnes of carbon dioxide by 2030, making a shift toward net negative even more essential.
While net-zero initiatives balance the levels of greenhouse gases, net negative — also known as carbon negative — seeks to actively remove greenhouse gases from the atmosphere, reducing them to below the levels organizations produce.
Governments are responsible for big-picture legislation, targets, and pan-sector initiatives to help firms get there. But at a time when governments are delaying net-zero targets and scrapping environmental bills, businesses must take responsibility for the push to net negative.
I believe this systemic change has to come from the top.
Yes, directors have a moral obligation to reverse their climate impact. But more than this, climate change poses a systemic risk to all businesses. Climate-related events are disrupting supply chains, operations, and market demand — which will negatively impact bottom lines.
For example, Hurricane Ian caused a 75 percent drop in shipments in the US, while in India, flooding in the Chennai region forced many manufacturing plants to close.
Business leaders have two choices: do nothing and incur the massive costs climate disruption will cause, or act now by making emissions reduction a strategic priority.
After all, boards have one responsibility — to ensure the long-term sustainability and resilience of their organizations. That is why I am urging boards to go further than net zero.
Some companies have caught on. Microsoft recently pledged to become carbon negative by 2030, with even bolder plans to remove all of the carbon the company has ever emitted by 2050.
Of course, this is a huge operational undertaking. That is why board members must challenge assumptions, push for more ambitious targets, ask tough questions, and embrace transformative solutions.
Board-level executives must drive net-negative schemes in their businesses starting today — not wait for mandates from governments.
Scott Lane
Boards should start by interrogating their companies’ policies on carbon offsetting. For all its usefulness in the short term, carbon offsetting is not an adequate replacement for genuine emission reduction. Instead, business operations need to decarbonize.
Organizations can make significant progress by addressing “scope three” emissions — indirect emissions that occur across an organization’s value chain, such as emissions from commuting, international business trips, or the end-of-life stage of sold goods.
For example, IKEA plans to decrease its emissions by switching to 100 percent renewable energy across its value chain by 2030.
Scope three emissions are often the largest category of emissions and fall outside the direct control or regulatory frameworks of businesses, making them especially tricky to tackle.
Boards should demonstrate transparency and accountability by disclosing these emission figures and ensuring that senior management teams have robust strategies to reduce them through tangible measures such as cycle-to-work schemes.
Boards must also forge relationships with competitors, as well as with key stakeholders such as unions, suppliers, and government bodies. This enables climate solutions to be developed and implemented more quickly and at greater scale.
Beyond industry relationships, boards must engage with policymakers. Executives should advocate for laws that support ambitious climate policies, helping to shape measures on carbon pricing, renewable energy, and green technology.
While scope three emissions are the priority, boards also have the power to implement large-scale nature-based projects across wetlands, forests, and oceans. Reforestation projects and sustainable land management will be essential to ensure that these natural ecosystems can continue to absorb CO2 emissions.
Beyond carbon initiatives, businesses need to adopt bold circular-economy principles. Boards should challenge management to incorporate circularity into their business models, from product design to waste management.
Middle East-based waste management firm Averda, for example, works with local governments to boost recycling rates and repurpose solid waste for energy generation. This shows how firms can use deep sector knowledge to promote circularity among consumers too.
Board-level executives must drive net-negative schemes in their businesses starting today — not wait for mandates from governments. The climate crisis is intensifying, and the knock-on implications for business operations will be enormous.
By challenging conventional thinking and demanding ambitious ideas, boards have the chance to play a key role in securing a prosperous, sustainable future.
• Scott Lane is CEO and founder of Speeki, an ESG and sustainability reporting and management partner to large corporates
