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Charting the path to net-zero for businesses

Net-zero means that a business has reduced the greenhouse gas emissions from its operations and value chain by 90%. This is in line with climate science, limiting global warming to 1.5°C. Any remaining unavoidable emissions (up to 10% of overall company emissions against the base year) are then mitigated by funding carbon removal projects. So, what’s the best way to get there?

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In recent years, net-zero has become a buzzword sweeping through corporate boardrooms, governments, and water cooler conversations. Businesses increasingly want to be part of the solution and take climate action, with net-zero representing the ultimate goal. It’s become a beacon of hope for mitigating the worst impacts of climate change. However, net-zero is also one of the most widely misused terms in the climate space, often used interchangeably with “carbon neutral”, and bolted onto ambitious corporate targets with arbitrary dates and no supporting evidence. 
Much of the confusion stems from the fact that, until recently, there was no universally accepted definition of the term. While carbon neutrality and net-zero are both rooted in balancing human-induced (anthropogenic) emissions, the paths to achieving them are very different. You can check out our<a href="https://ecologi.com/articles/blog/carbon-neutral-vs-net-zero-whats-the-difference" target="_blank" rel="noopener"> blog with more detail on the differences between carbon-neutral and net-zero</a>, and hear why at Ecologi we recommend following a net-zero pathway, and not a carbon neutral one.

Clearing up the confusion with the SBTi Net-Zero Standard

Fortunately, the <a href="https://sciencebasedtargets.org/net-zero" target="_blank" rel="noopener">Science Based Targets initiative (SBTi)</a> has stepped up to clear the confusion in recent years, by publishing the <a href="https://sciencebasedtargets.org/resources/files/Net-Zero-Standard.pdf" target="_blank" rel="noopener">SBTi Net-Zero Standard</a>. In doing so, the SBTi has provided a clear definition of net-zero and shown how businesses can achieve it. 
With a robust framework grounded in climate science, business leaders can now confidently set emissions reduction targets in line with the Paris Agreement and take the climate action necessary to limit global temperature rise to 1.5°C.
Under the <a href="https://sciencebasedtargets.org/resources/files/Net-Zero-Standard.pdf">SBTi Net-Zero Standard</a>, corporate net-zero is defined as: 
<ul>
<li style="font-weight: 400;" aria-level="1">Reducing scope 1, 2, and 3 emissions to zero or to a residual level that is consistent with reaching net-zero emissions at the global or sector level in eligible 1.5°C-aligned pathways </li>
<li style="font-weight: 400;" aria-level="1"> Neutralising any residual emissions at the net-zero target year and any GHG emissions released into the atmosphere thereafter.</li>
</ul>

The process of getting to net-zero for businesses consists of four key elements:
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<li>Near-Term Science-Based Targets &#8211; not interchangeable with long-term targets, near-term targets galvanise action and initiate change to make sure that businesses can achieve rapid and significant reductions in emissions (<a href="https://sciencebasedtargets.org/resources/files/Net-Zero-Standard.pdf" target="_blank" rel="noopener">typically 4.2% p.a</a>*) by 2030, in line with climate science.</li>
<li>Long-Term Science-Based Targets &#8211; determine how much a company must reduce their value chain emissions to align with limiting warming to 1.5°C. A company cannot claim to be net-zero until the long-term science-based target has been reached (90% reduction in emissions*). The deadline for long-term targets is 2050, but more ambitious companies are striving to reach net-zero before this.</li>
<li>Beyond Value Chain Mitigation &#8211; The SBTi encourages companies to take action and fund projects with climate benefits beyond their value chain. This will help to mitigate GHG emissions and lead to additional benefits for people and the planet in support of the UN’s Sustainable Development Goals. Beyond value chain mitigation should supplement, rather than replace, a comprehensive decarbonisation strategy &#8211; and it can include, for example, funding carbon avoidance or removal projects, nature restoration schemes, research and development, new technologies, and supporting environmental legal defence (amongst others). As a result of funding carbon removal or avoidance projects, a company may become &#8216;carbon neutral&#8217;. However, this is not the end goal, and emissions reduction should be prioritised.</li>
<li>Neutralisation &#8211; The SBTi acknowledges that it may not be feasible for some industries to achieve zero emissions and decarbonise 100% of the value chain. As a result, once long-term decarbonisation targets have been reached, companies must use carbon removals to neutralise unavoidable emissions (which must not exceed 10% of overall company emissions against the base year).   </li>
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* Targets and required reduction varies across industries. Please refer to the SBTi Net-Zero standard for clarification.

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Now you know what net-zero means, it’s time to put the theory into action Here’s a six-stage pathway to reaching corporate net-zero. While it may seem linear, the process is circular and dynamic. You will need to revisit each stage a number of times before achieving long-term science-based targets and becoming certified as net-zero. That’s all part of the journey.
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<li>Commit &#8211; There must be an acknowledgement that your business can be part of the solution and needs to change. Net-zero doesn’t happen overnight, it’s a transition that needs a long-term commitment. It requires systematic processes and structural changes across the entire value chain. So the relevant internal stakeholders need to understand the reasons for change and buy into the process.</li>
<li>Calculate &#8211; Calculation is key to understanding your starting point, identifying emission hotspots in your value chain and seeing the greatest opportunities for reduction. This stage is repeated throughout your journey to net-zero (typically on an annual basis) to measure performance against your targets and the impact of your reduction strategies.</li>
<li>Strategy and Target Setting &#8211; Once you’ve measured your emissions and established a starting point, you can begin to analyse your footprint and identify a suitable transition strategy to decarbonise your operations. Strategy and target setting should be done in unison. There is little point in setting targets if you don’t know how to achieve them.  Every business is unique, and what may be a suitable target for one business may be unrealistic for another. By developing a strategy alongside targets, you can assess their feasibility. Likewise, science-based targets complement strategy as they guide your level of ambition, hold you accountable and provide a measurable indicator of success.</li>
<li>Reduce and Engage &#8211; Once a strategy has been established, it is essential to start implementing the plan by following a logical and achievable set of steps. This is not an overnight process and must also align with your business environment to be economically sustainable. Working with your supply chain is essential, as for many businesses up to 90% of emissions can come from the  value chain. While this makes things more challenging, there are steps that you can take to support sustainable procurement and reduce your indirect emissions. *We intend to run further workshops and provide tools to support you in achieving this.</li>
<li>Remove &#8211; The penultimate stage of net-zero occurs after significant reduction has been achieved, and it’s the removal of unavoidable emissions through buying and retiring carbon removal credits. Under the SBTI Net-Zero Standard, only up to 10% of your overall emissions against the base year can be removed in this way. You can only become certified as net-zero if using carbon removal credits as opposed to avoidance credits. You may, however, use carbon avoidance credits throughout your journey to becoming net-zero, to offset your emissions while implementing emissions reductions to achieve carbon neutrality. It should be emphasised that carbon neutrality is a stepping stone to net-zero and is a supplementary action to mitigate the effects of your current emissions. Net-zero should remain your long-term goal.</li>
<li>Certify &#8211; Once you’ve taken action to reduce your emissions and potentially become carbon neutral, you will return to the calculation stage to assess the difference your changes have made, then re-evaluate your strategy and next steps. You will likely have to go through this cycle a number of times before you have achieved the required level of emissions reductions and transitioned to a state of net-zero. Then it’s time to really celebrate, as you can be certified as net-zero under the SBTi.</li>
</ol>
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Crucially, whilst undertaking their net-zero journey businesses need to begin to prioritise people and planet, rather than just profit. This pathway, and the knowledge it requires may seem daunting. But we’ve been working hard behind the scenes to simplify the process by developing our very own carbon accounting tool. Ecologi Zero has been designed to remove the barriers that prevent small and medium-sized enterprises (SMEs) from starting their net-zero journey.
Ecologi Zero lets you calculate and analyse your footprint for free, using simple interactive dashboards. We also plan to introduce new features in the coming months, to support you through strategy development, target-setting and emissions reduction. Plus, you’ll soon also be able to support beyond value chain mitigation and carbon avoidance projects through Ecologi’s Impact Shop. 
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<a href="https://ecologi.com/business/zero" target="_blank" rel="noopener">Find out more about Ecologi Zero and start your net-zero journey</a>

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Hopescrolling: The good news timeline

It’s not all bad. While there’s a lot of negative news about the climate, let’s not forget the good stuff. Find climate wins, reasons to be hopeful and plenty of positivity in our good news timeline.

The good news timeline

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We know that funding high-quality carbon credits provides vital funding to impactful projects <a href="https://www.ipcc.ch/2023/03/20/press-release-ar6-synthesis-report/">which prevent and avoid emissions</a>.
However, it’s vital to look at the bigger picture: how carbon credits are being used is critical in taking meaningful climate action for our planet.
Simply using carbon credits to offset our business-as-usual emissions (often referred to as becoming ‘carbon neutral’) without taking steps to reduce those emissions directly <a href="https://wedocs.unep.org/bitstream/handle/20.500.11822/40875/EGR2022_KR.pdf?sequence=3">will not solve climate change</a>. In addition, there’s increasing pressure on businesses following recent crackdowns on green claims, such as <a href="https://www.theguardian.com/environment/2023/may/15/uk-advertising-watchdog-to-crack-down-on-carbon-offsetting-claims-aoe">claiming ‘carbon neutrality’ through offsetting alone</a>. So, across our industry, we need to rethink carbon offsetting completely, from the ground up.
Let’s unpack this.

Offsetting to compensate for business-as-usual emissions is OUT

Science is clear that minimising global warming requires substantial emissions reductions globally. The IPCC has called for <a href="https://www.ipcc.ch/sr15/chapter/spm/">50% reductions in emissions by 2030</a>, and global net-zero emissions by 2050, if we are to limit the global temperature increase to below 2°C, and as close as possible to 1.5°C. Every year that we continue to increase emissions, the steeper the curve needs to be for the world to decarbonise in time, 
Traditional carbon offsetting involves paying for carbon credits, each representing one tonne of emissions reduced or avoided by a project (like a solar farm). To offset, you would produce one tonne of greenhouse gas emissions through your business activities, and then offset that tonne by buying a carbon credit. 
However, traditional offsetting also gives free licence to businesses to continue generating emissions, or even increase them! Provided that they are also paying to offset them. You can see this in the visual below.
<img loading="lazy" class="aligncenter size-full wp-image-7760" src="https://cms-assets.offset.earth/app/uploads/20230516164950/COP27-Net-Zero-Pathway-Workshop.png" alt="" width="960" height="540" srcset="https://cms-assets.offset.earth/app/uploads/20230516164950/COP27-Net-Zero-Pathway-Workshop.png 960w, https://cms-assets.offset.earth/app/uploads/20230516164950/COP27-Net-Zero-Pathway-Workshop-300x169.png 300w, https://cms-assets.offset.earth/app/uploads/20230516164950/COP27-Net-Zero-Pathway-Workshop-768x432.png 768w" sizes="(max-width: 960px) 100vw, 960px" />
Even when businesses fund high-quality projects and offset their emissions in full, those direct emissions are still taking place. The benefits of avoided emissions are effectively cancelled-out if the projects funded are only being used to offset your business’s continued emissions. The same is true, even if you are doing your offsetting with carbon removal credits &#8211; because the climate impacts of emitting and then removing greenhouse gases are not the same as simply not emitting them.
This is unsustainable. We need to reconsider completely the way we think about offsetting.

Reducing emissions whilst committing to fund high-quality climate‌ action is IN

For businesses to align their operations with <a href="https://www.iema.net/articles/ghg-management-hierarchy-updated-for-net-zero.">the science of climate change</a>, making direct emissions reductions <a href="https://ecologi.com/articles/blog/charting-the-path-to-net-zero-for-businesses">across your supply chain is paramount</a>. That’s a separate process, which offsetting doesn’t contribute toward.
Funding impactful projects through carbon credits still has a huge role to play. The SBTi (Science Based Target initiative) deems <a href="https://sciencebasedtargets.org/blog/net-zero-urgent-beyond-value-chain-mitigation-is-essential">funding carbon credits as an &#8220;essential&#8221; step</a> in the journey towards global net-zero. 
Supporting these high-quality carbon avoidance projects (that’s the same kinds of projects which are traditionally used for offsetting) is a perfect entry point for businesses to start their climate journey &#8211; whilst these businesses gather their plans to reduce their emissions directly.

Reducing your business emissions is a marathon, not a sprint

One of the SBTi’s core requirements for a business to achieve net-zero is to achieve a <a href="https://sciencebasedtargets.org/net-zero">minimum 90% reduction in emissions in most sectors</a>. This emissions-reduction journey will not be easy, since that’s a BIG task!

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Imagine having to reduce your financial budget by 90% &#8211; it would require a lot of planning, researching, and implementation, over a long period.

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Near-term targets are going to be crucial to break down those larger long-term goals. SBTi <a href="https://sciencebasedtargets.org/reports/sbti-progress-report-2021">research in 2021 showed that</a> if your business had set its science-based targets that year, you would need to make emissions reductions of just 4.2% per year &#8211; a much more understandable and manageable target for most businesses.
Remember as well that, even if simply offsetting your business emissions was your goal, then the higher your emissions are, the more it will cost to your business to offset them. This means that whilst there’s an enormous challenge in reducing emissions over a sustained period, it will be much better in the long run, both for your business and for the planet.

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This is a long-term commitment which all businesses need to undertake. That’s why funding high-quality climate action is crucial at the same time. You can give back to our planet throughout the process &#8211; and by doing so, you can have a real, measurable impact <a href="https://sdgs.un.org/goals">on people, communities and biodiversity</a>.

High-quality climate action that ‘goes beyond’

This funding of high-quality climate action outside of a business’s operations is referred to by the SBTi as ‘<a href="https://sciencebasedtargets.org/blog/going-above-and-beyond-to-contribute-to-societal-net-zero">beyond value chain mitigation</a>’ or ‘BVCM’. They highlight this as a critical contribution to reaching societal net-zero because it has a positive climate impact outside of your business’s direct sphere of influence. Your company can leverage its BVCM strategy to generate positive global change for our planet.
The great thing about BVCM is that it allows your business to select project types and locations that matter to you: you can build your own mix of projects to support.

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Don’t be put off by the scientific terminology. Simply, it means continuously funding climate action via high-quality carbon avoidance credits (and other types of impactful climate projects) whilst reducing your business emissions on your journey to net-zero.

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At Ecologi, we select the carbon avoidance projects we support according to our<a href="https://ecologi.com/articles/updates/how-ecologi-finds-and-funds-the-most-impactful-climate-solutions"> climate impact regionalisation strategy</a>, which focuses on directing funding towards locations and projects with the greatest potential impact.
This approach allows our in-house team to identify which, out of the ~200 quotes for carbon credits we review every month, are the most impactful.
The projects we support &#8211; which you can fund through <a href="https://ecologi.com/impact-shop">our Impact Shop</a> or through <a href="https://ecologi.com/business/integrations">our automations and integrations</a> &#8211; are also independently scrutinised by organisations like our friends at <a href="https://www.sylvera.com/">Sylvera</a>.

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Reframing carbon offsetting in a way that makes a real difference

Don’t let your business fall into the trap of thinking that buying carbon credits gets you off the hook by compensating for emissions which you haven’t attempted to reduce. That way of thinking is all wrong.
<a href="https://sciencebasedtargets.org/net-zero">The net-zero pathway</a> allows you to fund carbon removal credits to ‘offset’ your unavoidable emissions. However, you need to reduce your emissions as much as possible first, and only use removals for up to a maximum 10% of your initial emissions, and it has to be carbon removal, which is very expensive!
Think about your BVCM as funding climate action, full stop. It’s not about compensating to let your business keep producing emissions. It’s just one cost of running a responsible business, whilst you work to reduce your emissions directly. 
Don’t think about it in the context of letting your business carry on emitting as it was before &#8211; because that won’t contribute toward solving the climate crisis.

How to take the first step on your climate journey

Every business is different, and that means that although reducing emissions is vital, funding climate action might be the most suitable entry point for you, on your climate journey.
Through Ecologi, you can do this and more:

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If you’re still not sure where to start, <a href="https://ecologi.com/business/overview#get-in-touch">reach out to our friendly team of experts</a> who will be more than happy to find the right climate solution for your business and for our planet.

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Ecologi - Our story

How Ecologi grew from a climate action subscription to the ultimate climate companion for businesses. Read our story here!

<h2>The thought that turned to action</h2>
The story of Ecologi started one morning in 2019, when our founder <a href="https://www.linkedin.com/in/elliotcoad/">Elliot</a> picked up his morning coffee and wondered what would happen if he instead spent that money on addressing the climate crisis? 
As a keen ‘armchair environmentalist’ and self-confessed nerd, his research took him down a few rabbit holes and geek out sessions, as he explored the potential impact of just 10% of the world redirecting their loose change from cappuccino to climate action. 
He soon realised that there are ample climate solutions already available to address climate change and restore nature, and the world’s pocket change is more than enough to fund them. The idea just needed to galvanise support and turn into collective action. 
Ecologi began as a family and friend business. Elliot is experienced in product and development, and his wife <a href="https://www.linkedin.com/in/lucyjackk/">Lucy</a> is a website designer who is a deft hand with illustration and branding. They were joined by their friend <a href="https://www.linkedin.com/in/remotealex/">Alex</a>, a talented developer and entrepreneur who had just finished building a subscription product of his own.
Ecologi was born!

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<h2>Ecologi 1.0</h2>
Ecologi started as a subscription service for individuals to take climate action and was founded as a for-profit social enterprise to scale this idea rapidly. In a world of Netflix, Spotify, Headspace and countless other affordable subscriptions, we figured that there must surely be room in the market for something that could literally change the world? 
We decided on the name ‘Ecologi’ in awareness of two great threats to humanity; global warming, and biodiversity loss. These issues are interconnected, and we cannot solve one without the other. Therefore, the projects that we offer give our customers the opportunity to support both climate action and nature restoration in conjunction.
With an ethos based on transparency and putting our planet ahead of profit, we’ve grown a passionate community of over 18,000 businesses and 40,000 members in under five years. Through the support of our community, we’ve funded the planting of over 60 million trees, prevented over 2.5 million tonnes of CO2e from entering our atmosphere through certified carbon avoidance projects and achieved B Corp Certification. 
Our <a href="https://lookerstudio.google.com/reporting/adfb141d-4153-4c22-b6b4-976f7f3930b2/page/p_9zis9oxt3c">Public Impact Ledger</a> lifts the lid on what goes on behind the scenes here at Ecologi and delves into the evidence and detail of all things climate impact. Check out our <a href="https://ecologi.com/transparency">Transparency page</a> for evidence of our impact and finance, and meet the teams driving us forward.

<h2>The next chapter </h2>
We’ve had a great start, but there is still a lot of work to be done, and we can’t do it alone. So we’ve reset and refocused, with a bold new mission to inspire and empower businesses to accelerate global action on climate and nature. 
SMEs make up 99% of the UK business population and contribute half of all business-driven emissions in the UK. But according to a 2021 survey by the British Business Bank, only 6% are likely to have measured their carbon footprint in the last five years. <a href="https://ecologi.com/articles/blog/climate-commitments-survey">Our own research</a> also found that over four in 10 (41%) of SMEs would like their business to have a net-zero strategy, but feel confused about how to get started.
In the years ahead, the team at Ecologi will champion SMEs as green revolutionaries, empowering them on their journey to reduce emissions and take climate action. There are millions of SMEs in the UK and we believe that with the right support, they can help turn the tide on the climate crisis. 
SMEs are powerful enough to make an impact, agile enough to act fast, and unstoppable when working collectively. Just imagine what would happen if every SME rose up and took action as one? 
<h3>Check out our Climate Commitments Report</h3>
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 📁 Download the PDF report <a href="https://cms-assets.offset.earth/app/uploads/20230328090053/Ecologi_BBB_Report_V6.pdf">here</a>

<h2>Supporting the revolution</h2>
We’ve recently concentrated our efforts on being the ultimate climate companion for SMEs, no matter what stage of the journey to net-zero they&#8217;re on. From calculating their carbon footprint, to reducing their emissions, to funding climate projects, to sharing their impact with their community. And we’ve developed a suite of products to support that journey.
<a href="https://ecologi.com/business/zero">Ecologi Zero</a> is our free and easy-to-use carbon footprinting tool for UK-based SMEs. It’s designed to remove the high-cost, technology and skills barriers to carbon footprinting by connecting seamlessly with Xero accounting software to calculate emissions from existing business data, and requiring no expertise or experience. We’re really proud of it and its potential to be a game changer in enabling SMEs to take the first step on their net-zero journey. 
We’ve also launched our all-new <a href="https://ecologi.com/business/impact-shop">Impact Shop</a>. This pay-as-you-go store for climate impact lets businesses make a purchase for our planet with no strings or subscriptions attached. This allows SMEs to support whatever type of projects mean the most to them, and fund as much impact as they like, whenever suits them. From funding tree planting in specific countries to supporting community-based projects, SMEs can choose from a range of high quality climate solutions and know that they are making a positive impact.
Finally, <a href="https://ecologi.com/business/climate-positive-workforce">Climate Positive Workforce®</a> allows SMEs to bring their employees along on the journey of climate action. This product operates like a regular subscription, compensating for the approximate carbon footprint per number of employees in your business country of operation, while also funding the planting of trees through our trusted reforestation partners. In doing so, your organisation will visualise their impact in their virtual forest, learn more about the different carbon avoidance projects they support each month, and share their impact online.
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<h2>For our planet </h2>
Our planet. This is what brought us together. It’s why we started Ecologi. It’s the purpose of our community. The reason we take collective action. And when we speak to our community, they often say that they work with us so they can do something positive for our planet. 
As we look ahead to the next chapter of Ecologi, these three small-but-mighty words have become our north star, and the core of our brand. 
Now is the time to act together. Let’s rewrite our future. For our planet. 
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Charting the path to net-zero for businesses

Carbon neutral vs net-zero

Clearing up the confusion with the SBTi Net-Zero Standard

The key elements of corporate net-zero

A six-stage path to achieving net-zero

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Hope-scrolling: The good news timeline

The way we think about carbon offsetting is all wrong

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