Unpacking Net Zero

Take a short jump back in time — just two or three years ago — and few people had ever heard the term “net zero.” Today, it’s everywhere.

Big businesses are all in. Some of the most well-known and well-respected names on the Fortune 500 — Amazon, Apple, Starbucks, Unilever, The Home Depot, FedEx and more — have already established deadlines for reaching net zero CO2 emissions.

Some really ambitious companies, like Microsoft and Google, have gone a step further and set goals to eliminate all their historical emissions. Just imagine: From a greenhouse-gas perspective, it’ll be like two of the world’s biggest tech firms were never even here.

Some of the most well-respected brands on the Fortune 500 have already established ambitious net zero goals.

But all this net zero noise has brought a lot of confusion with it. So, let’s take a moment to unpack this concept by answering two big, if simple, questions:

1. What, precisely, does “net zero” mean?

2. Why are so many companies suddenly pursuing it so aggressively?

What does net zero mean?

At the time of this writing, “net zero” and “carbon neutrality” are used almost interchangeably. (There is — or was — a technical difference between the two, but the lexicon has shifted enough to make them virtual synonyms.) In the simplest terms, it means reaching the point where any greenhouse gas created by a company is offset — leaving that company with a neutral/zero carbon footprint.

Kristen Bell explains in this one-minute video created for TED’s Countdown series:

The push for carbon neutrality was driven, in large part, by the signing of the Paris Agreement in 2016. The Agreement’s long-term goal is to limit the rise in global average temperature to 1.5 °C (2.7 °F), since staying under that threshold will substantially reduce the risks and impacts of climate change. Per the best projections, we have until 2050 — only 29 years — to reach global net zero emissions and stave off the crossing of that line.

So, there’s the survival thing.

But environmental leaders have been talking about the potential dangers of climate change for decades, and the corporate sector has historically resisted doing much about it. What’s changed now?

Why are so many companies now pursuing net zero emissions?

For years, many companies perceived the cost of “going green” to be too high. In cutthroat marketplaces, where winning tomorrow means making smart investments today, it was hard for a public company to convince its board (let alone its shareholders) to invest much-needed capital in a feel-good, green energy operational expense that wouldn’t show a positive ROI.

But that’s all changed.

The prices of enviro-tech solutions, like solar panels and energy storage devices, have dropped dramatically. Valuable clean energy incentives have been made available at both the federal and local levels. And, solar energy is now the cheapest electricity in history. Suddenly, “going green” is no longer a costly proposition; it’s a valuable opportunity.

net zero solar array for green energy

Forward-thinking businesses have realized that “going green” is a big financial and brand opportunity.

And that’s just scratching the surface on why renewable energy is great for business; distributed energy has become a key tool for helping businesses meet their net-zero targets. Consider these reasons why:

Lower operating costs

When companies improve energy efficiency with renewables (e.g., solar/PV), they can see enormous savings. For example, the solar array at Bishop Ranch offsets about 75% of the shopping center’s total energy usage — the carbon equivalent of planting more than 23K new trees.

Low/No barrier to entry

With so many incentives available — e.g., state and federal tax credits, power purchase agreements (PPA), etc. — it’s possible to build a solar array at little to no cost. And, the reduced energy costs are guaranteed for 25 years.

Higher revenue

More than two-thirds of American consumers prefer climate-friendly brands. And, they’re putting their money where their mouths are. According to recent carbon emissions data, companies that are actively reducing emissions are seeing a 15% rise in market cap. Solar canopies in particular can serve as a heuristic towards net-energy goals.

Employee happiness/loyalty

In a 2019 study, 70% of American workers said their company’s sustainability plan would impact their decision to stay long-term. And, 30% said they had already left a company due to its lack of environmental vision.

It was a long time coming, but we’ve finally reached the point where our collective global need and our individual business concerns have aligned. And not a minute too soon.

The clock is ticking, and a lot more progress needs to be made to limit the global temperature rise to 1.5 °C. (Just see the IEA’s recent “Net Zero by 2050” report to learn more.) This is a truly global initiative where every company’s participation matters.

So, if you’ve been considering a net zero plan but aren’t sure how to get started, reach out to us today. We’ll help you take that first step.

Recent Posts

Learn more about how DSD
can help your company get to net zero.

"*" indicates required fields