Zen CEO Paul Stobart is tackling the Scope 3 carbon emission challenge head-on and has taken decisive and proactive action on rallying the industry to urgently get to grips with the supply chain decarbonisation agenda.
Here, he shares insights into the sustainability imperatives and hurdles that will impact us all, and encouragingly he writes with an optimistic note.
Continuing extreme weather around the world in recent months, the atmospheric rivers in California, devastating floods in Australia, or worsening droughts throughout the Horn of Africa, reminds us of the untold damage that decades of carbon emissions have been, and are doing, to our climate. As business people we are alive to this threat and recognise that we share in the responsibility to reduce emissions to the minimum as fast as possible.
Recognising the urgency, Zen has completed measurements of Scopes 1 and 2 emissions (effectively those that are directly or indirectly under the control of the business), and Scope 3 emissions (those emissions generated by upstream suppliers providing us with products and services and by downstream customers who use those products and services). We have submitted our plan to get to Net Zero to the Science Based Targets initiative (SBTi) and had it approved, and are now executing on our strategy to reduce carbon emissions for all three Scopes by 50 per cent by 2030 and by 90 per cent by 2040.
The SBTi’s Corporate Net Zero Standard is the world’s first framework for corporate Net Zero target setting in line with climate science. It includes the guidance, criteria and recommendations companies need to set science-based net zero targets consistent with limiting global temperature rise to 1.5°C.
Success will depend on suppliers and customers in the supply chain in which we operate helping us achieve these goals. We are all in this together. To that end I have been lobbying the larger players in our industry to join a steering group on climate change to provide guidance, information, and encouragement to the thousands of businesses who want to do the right thing by the environment, but either don’t know what to do or how to go about do it. Happily, this idea has been well received and I am hopeful we will see meaningful progress in 2023 because the criticality of positive action grows by the day.
This is not a challenge we can pass to the next generation, by then it will be too late. The challenge is ours and it is now
All businesses can take steps to reduce Scope 1 and 2 emissions, the challenge is dealing with Scope 3. Measuring Scope 3 emissions is difficult because, due to the lack of available data, it relies on us ‘guesstimating’ emissions across the supply chains we serve. Setting out to reduce these Scope 3 emissions presents further challenges, as all we have been able to do historically is influence others to do the right thing and reduce their emissions, thereby helping the whole supply chain reduce emissions in aggregate.
But I do sense that things are changing. First, it’s clear that more and more corporates in global supply chains are placing additional emphasis on sustainability. If they don’t see their suppliers developing strategies with a view to reducing emissions, then these corporates have made it clear that they will switch supplier. Indeed, I have seen this happen in the UK in several industries outside of telecommunications in the last six months. It’s amazing how quickly businesses develop sustainability strategies when there is a threat of losing a big customer!
Second, businesses are taking the whole issue of Net Zero far more seriously than was the case a few years ago. I sit on various boards and Net Zero is now a regular agenda item. The conversation is no longer about how to measure emissions or how to put in place appropriate milestones. The discussion now is all around execution... what are we doing right now to reduce emissions, and to achieve our milestone ambitions?
Third, I believe that the Scope 3 challenge will get resolved over the next few years as more companies come together to work through how to measure, share and manage carbon data. Organisations like CDP already provide hubs and portals where businesses can work out their Scope 3 emissions and assess how best to reduce them.
Fourth, peer pressure in this space is real. CEOs do not want to be seen to be out of touch when it comes to the environmental agenda. They want to be seen as proactive. If an organisation has a half-hearted strategy on how to tackle climate change, then it will be vulnerable to customer defection and will struggle to recruit key talent.
Finally, markets are becoming more informed about climate change and prepared to challenge businesses when claims are exaggerated, or just plain wrong. Many businesses today claim to be green when all they have are some carbon offsetting activities to reduce Scope 1 and 2 (but not Scope 3) emissions to a net neutral position.
Some businesses say they are at Net Zero already, a claim that needs to be challenged. The only way that this can be the case is if those businesses have reduced their carbon emissions by 90 per cent and put in place carbon removal practices (such as tree planting, kelp farming, soil management or direct from air carbon capture) to remove the remainder. That’s a hard bar to reach. The Net Zero imperative is not a challenge we can pass to the next generation, by then it will be too late. The challenge is ours and it is now.