What net zero actually means for big business – and the likelihood of them meeting targets

What net zero actually means for big business – and the likelihood of them meeting targets
iStock / Daniel Balakov
This article is sponsored by BHP.

The number of businesses worldwide that have committed to reaching net-zero carbon emissions is continuing to grow rapidly as they realise the urgency needed to tackle the climate crisis. It is believed to be essential that we meet the goal of net-zero by 2050 if we want to give ourselves the chance to limit global warming to safer levels. A report by the UN warned that we need to cut emissions roughly in half by 2030. 

Some companies will reach net-zero much sooner than 2050, with some even planning to become carbon negative – a step beyond net-zero by 2030.

It sounds ambitious, and while these pledges often make for great PR, net-zero is more complicated than it might seem.

To reach net-zero emissions, a company has to identify all emissions they are responsible for creating and then reduce these as much as possible. Then, if they cannot reduce emissions, the company will need to invest in projects that either stop emissions elsewhere or pull carbon out of the air to reach ‘net-zero’.

The process is complex and not very well regulated, so companies can report their emissions as they please. 

In a number of industries, it’s also difficult to understand whose emissions are whose with companies needing to work together with other sectors to help find cleaner, low carbon solutions to these issues. For example, if air travel is used by one company, is it their responsibility or is it the responsibility of the company that owns the planes? 

For example, BHP has partnered with Toyota on a new Light Electric Vehicle (LEV) trial at BHP’s Nickel West operations.

“This partnership is another step in our ongoing studies into how we can reduce the emissions intensity of our light vehicle fleet,” Edgar Basto, President, Minerals Australia, BHP said in a statement. “It builds on other LEV trials underway in South Australia and Queensland. Reducing our reliance on diesel at our operations will help achieve our medium-term target of reducing operational emissions by 30 per cent by 2030.

The partnership saw a Landcruiser 70 converted from running diesel to becoming fully electric via onboard battery power. The vehicle is expected to fulfil several roles on-site and will be used above ground and underground.

Another area where BHP has partnered with other companies is its investment in Carbon Engineering Ltd to develop a ground-breaking technology to reduce carbon emissions. Their investment will accelerate Direct Air Capture (DAC) development, which removes CO2 from the atmosphere and provides it in purified form for use or storage. 

The captured and compressed CO2 can be stored in suitable underground environments or create products such as liquid fuels. The technology works similarly to how trees remove CO2.

What remains a cause for concern for BHP is Scope 3 emissions caused by variables outside of its direct control, including transport and the use of BHP products.

To minimise Scope 3 emissions which “are around 35 times larger than the operational emissions we do control”, BHP is working with the likes of steelmakers and freight contractors to “decarbonise their production processes and “support greener freight”, with further shifts in operations planned.

By addressing its Scope 3 emissions, BHP is also opening the doors for others to reduce their Scope 2 or even Scope 1 emissions, in a collaborative effort that should see headway being made across a variety of sectors and industries.

For all large companies worldwide to reach net-zero emissions, it would seem many will have to work together to hit that goal. The focus should also turn towards reducing rather than offsetting as there simply isn’t enough space on earth to offset the world’s current emissions. 

A recent analysis by PwC found that as of February this year, only 8 per cent of the world’s largest companies represented by the Global Fortune 500 have actually pledged to become net-zero. This creates a considerable gap and means the current pace of change is far behind what we need. While global carbon emissions need to be halved by 2030, between 2009 and 2019, average emissions rose by 1.5 per cent per year. 

So, many companies worldwide, including BHP, have a long journey ahead of them and a tough fight to get down to net-zero emissions in the near future. And if business leaders don’t act fast enough, there may come a time where governments give them no choice and the pressure to act will simply grow and grow.