What is net zero and should your business be working towards it?

Net-zero refers to achieving an overall balance between greenhouse gases released into the atmosphere, and greenhouse gases removed from the atmosphere.

Greenhouse gases include:

• Carbon dioxide
• Methane
• Nitrous oxide
• Fluorinated gases

Greenhouse gases are collectively referred to as CO2e or GHG emissions. These gases are released through the use of transportation, electricity, industrial and manufacturing processes, commercial and residential buildings, and agricultural activities.

Becoming net zero means understanding your CO2e emissions across the value chain of the business. It also means making a commitment at a leadership level in your organisation. The potential benefits of working towards net zero targets include:

• Attracting high-calibre employees. Employees often feel more engaged and proud to work for a business that values environmental sustainability and actively contributes to environmental change.
• Cost savings. Adopting energy-efficient technology, optimising resource use, and reducing waste often lead to significant cost savings over time. Energy efficiency measures can lower operational expenses, such as energy bills, directly impacting your bottom line.
• Risk management. Climate change and environmental challenges can threaten supply chains, operations, and business continuity. You can better manage these risks by reducing your carbon footprint and environmental impact.

The process begins by setting a target. The Paris Agreement target is to limit warming to 1.5 degrees. Many organisations begin by setting their targets to be in alignment with the Paris agreement.

There are good reasons to do this:

• Large organisations are setting 1.5 degrees as their targets. Your organisation will potentially be in their supply chain so this will ensure that you meet any external carbon standards imposed on your organisation.
• This is the “science based target” that is already gaining traction with many organisations.

“1,045 companies representing more than $23 trillion in market capitalization (more than the GDP of the United States) have responded to an urgent call to decarbonize at the pace and scale required to limit global warming to 1.5°C. The companies span 53 sectors in 60 countries and have more than 32 million employees.”

1. https://sciencebasedtargets.org/news/more-than-1000-companies-commit-to-science-based-emissions-reductions-in-line-with-1-5-c-climate-ambition

Your business has 3 types of emission, known as Scope 1, Scope 2 and Scope 3. To be net-zero you have to measure your carbon emissions based on all of these scoping criteria.

Your carbon emissions are always measured retrospectively. In order to measure you need to set a baseline. You may choose to go back to the start of your business or pick a prior year.

Scope 1 & 2 emissions are your organisational carbon emissions. Scope 3 emissions are the emissions created by your business value chain (also known as upstream and downstream measures).

Measuring operational carbon emissions is straightforward and you can use a carbon calculator. At Carbon Positive Australia we have a business carbon calculator.

Understanding and calculating your value chain (Scope 3) emissions can be more complicated. The Corporate Value Chain (Scope 3) Accounting and Reporting Standard (GHD) allows companies to assess their entire value chain emissions impact and identify where to focus reduction activities.

To begin, you first need to understand your value chain and which emissions are possible to scope. With current supply chain difficulties this part of your scoping can be complex but it can also lead to better understanding, and ultimately to improvements in your product or service and a de-risking of your supply chain.

There is no standard methodolgy for reduction – it is a series of projects undertaken by the organisation to reduce the overall carbon footprint. As with any strategy, developing a plan and a set of goals for how you will is the way to begin. Reduction projects vary from no cost/low cost to projects that require significant investment.

Examples include:

• Lighting and heating upgrades
• Waste management process
• Manufacturing process investment
• Supply chain certification
• Travel and logistics review

You will want to record your reduction achievements and continue to measure on a consistent basis to show how you are moving towards your targets. Regular measurement ensures that you can monitor your reduction and report on the changes. Carbon Positive Australia’s Carbon Footprint Calculator allows you to create a free account so you can save and track your carbon emissions.

There will be some elements of your emissions that will be tough to reduce. In order to work towards your net-zero goals you may need to offset those emissions. Offsetting is the process of locking up carbon through other means, such as planting trees, to counterbalance the carbon your organisation is emitting.

Offsetting should not be used instead of reduction. It should be the place of last resort when further reduction is not possible. When picking an offset scheme or project to invest in, additionality is important. The questions organisations need to ask are; will this action produce more carbon drawdown and achieve beneficial impacts for the environment? From a Carbon Positive perspective, projects should seek to provide additional drawdown.

It is recommended that a full review should be undertaken of the offsetting project to ensure that it will have genuine drawdown impacts and that its impact is additional.

You will want to share your achievements on your net-zero journey with all of your stakeholders. Evidence shows that organisations that are on a net-zero journey:

• Boost profitability
• Create shareholder value
• Strengthen brand reputation
• De-risk the value chain

You may also want to research external certification for your actions.

Being carbon positive means always choosing actions that create a thriving environment. Your carbon positive journey is about organisation values and culture, as well as carbon drawdown. From a carbon perspective its about going beyond net-zero and ensuring that your organisation locks down more carbon than it emits.

This may include:

• Eliminating the use of fossil fuels;
• Sourcing all energy from renewable sources;
• Understanding your organisations impact on biodiversity; and
• Ensuring that your activities don’t create carbon emissions (e.g. ensuring that you have policies and procedures in place with regards to deforestation, water use etc)

Your business—no matter how big or small—has an important role to play in reducing greenhouse gas emissions and addressing climate change. And we’re here to help you do it in a way that aligns with your values.

At Carbon Positive Australia we help organisations, communities, and individuals take climate action by supporting tree planting and ecosystem restoration. Our projects are about more than just carbon offsets—they’re about large-scale, meaningful restoration, supporting community tree planting and providing education tools to help everyone understand their climate impact.

Find out more.