In October 2020, Japan finally pledged to achieve carbon neutrality by 2050. Meanwhile, as we look around the world, aiming to reach net-zero carbon emissions by mid-century has already become the norm, and now the discussion is shifting to how to accelerate the achievement of these goals.
More and more companies have declared “net-zero targets” aiming to reduce carbon emissions to zero with the goal of balancing the emissions produced and emissions removed from the earth’s atmosphere, and Japanese corporations are also following this trend. In response to this upsurge of net-zero declarations, six NGOs have warned that “net zero is NOT zero,”: The phrase “net zero” should not be used to evade responsibility or disguise climate inaction. Their report NOT ZERO: How ‘net zero’ targets disguise climate inaction points out:
- “Net zero emissions” does not mean “zero emissions,” and should not be accepted at face value.
- Collectively, “net zero” climate targets allow for continued rising levels of greenhouse gas emissions until they are reached.
- The large-scale deployment of technologies to capture and remove carbon from the atmosphere could potentially cause adverse effects on the natural environment.
- By putting the burden for carbon sequestration onto land and tree plantations in global South countries – which have done little to cause the climate crisis – most “net zero” climate targets are effectively driving a form of carbon colonialism.
Alarmed that there is already a critical amount of CO2 emitted into the atmosphere and that 2050 is much too late, the report calls for drastic and urgent actions by governments and corporations to bring emissions down to Real Zero while taking equity into account.
The Science Based Targets initiative (SBTi), which certifies whether companies’ emissions reduction targets are science-based and in line with the Paris Agreement goals of “limiting global warming to well below 2°C, preferably to 1.5°C,” is also developing a framework for the formulation and assessment of net-zero targets in the corporate sector.
Their report published last year lists three most common tactics in corporate net-zero strategies:
- Eliminating sources of emissions within the entire value chain of the company from upstream to downstream, including emissions associated with its operations (i.e. a company’s scope 1, 2, and 3 emissions)
- Removing CO2 from the atmosphere (neutralization measure)
- Reducing emissions outside of the value chain (compensation measure)
The report underlines that the first tactic is the most important and should be prioritized over other measures; neutralization measure may supplement, but not substitute, reducing value chain emissions; and compensation measure should be allowed only in the transition to net zero. It also provides 10 initial recommendations for net-zero targets (on page 35), and companies are expected to refer to them as they seek to set and implement such targets.
Finally, based on the principles discussed above, let’s examine actual net-zero plans of some companies.
Takeda Pharmaceutical Company announced that it achieved carbon neutrality in its value chain for its fiscal year 2019, which is a remarkable accomplishment at this point. In addition, Takeda has pledged that by 2040 it will eliminate all greenhouse gas emissions from its operations (scopes 1 and 2) without offsetting and reduce its scope 3 emissions by 50%. Hereafter, the company is expected to develop concrete measures to achieve these targets and disclose more details of their reduction plan.
Microsoft has announced that by 2030 it will be carbon negative – meaning it is removing more carbon that it emits each year – and that by 2050 it will remove from the environment all the carbon the company has emitted either directly or by electrical consumption since it was founded. While its “moonshot” plan has attracted attention, concerns have been raised over its large-scale tree plantations, excessive expectations for future technologies, its long-term partnerships with major oil companies and associated increase of its indirect CO2 emissions.
Royal Dutch Shell set out details of how it will achieve net zero by 2050 and reduce its oil production by 1-2% each year from its peak in 2019. In fact, Shell had announced its net-zero goals last year; however, they were criticized as inadequate, for the company targeted only emissions from its operations (scopes 1 and 2) just as other oil companies at the time. Given the criticism, Shell raised its ambition from previous goals, expanding targets to include its entire value chain (scope 3). We can say that this announcement is a key turning point in the oil industry; nevertheless, it is estimated that in reality oil production will continue to increase until 2030 while the world will need to decrease the production by roughly 6% per year in order to follow a 1.5°C-consistent pathway. The industry as a whole must significantly increase their commitments and accelerate their efforts.
“Net zero” declaration is an important step, but is only the starting line. Whether or not we can avoid runaway climate crisis depends on whether we can reduce emissions close to real zero at an early stage – and not be satisfied with “net zero.” Based on the understanding of this urgency, companies are expected to come up with detailed strategies to reduce their emissions, disclose their progress in a transparent manner, and radically transform their business operations towards decarbonization.