Excerpt posted with permission from ESG Impact Zone. Full article also available.

So, what can — and should — you do now? At Ivey Business School, we’ve worked with many companies on the journey to net zero, through our Corporate Strategies for Net Zero project.

Our experience is that companies take different paths to net zero, especially depending on their sector. However, there are common themes. Below are four core actions that we see companies taking.

1. Measure emissions.

In order to reduce your GHGs, you first have to know how much you’re emitting and from where.

Most companies use the Greenhouse Gas Protocol (GHG Protocol) to guide their emissions measurement. It defines a standard process for measuring and reporting emissions. That focuses on three “scopes” of emissions.

• Scope 1 refers to a company’s direct emissions.
• Scope 2 refers to emissions associated with the company’s use of energy, especially electricity.
• Scope 3 emissions are those associated with a company’s supply chain, as well as customers use of its products.

Measuring and reducing your scope 3 emissions will often be the toughest part, especially for large companies with complex global supply chains. Doing so can require us to change business systems. By way of illustration, it’s relatively easy to swap in LED light bulbs or install a solar panel. But it’s considerably harder to change processes, especially when those processes involve external suppliers, or customer behavior.

But don’t despair. There is lots of work happening to make scope 3 emissions easier to tackle, such as using blockchain technology to track supplier emissions. The most important part is to start where you are and give yourself permission to figure it out as you go.

2. Set targets.

Once you’ve measured your emissions, set targets to reduce them. We recommend the Science based Targets Initiative (SBTi) standard, which shows how much and how quickly a company needs to reduce GHG emissions to meet the target.

Some companies who work with SBTi focus on the overall target. We think of this as a “leap of faith” approach: They’re using the target as a North Star to guide innovation and actions. Other companies develop a plan (Step No. 3 below) to make sure the target is achievable, before making public commitments.

3. Develop the plan.

It’s likely unrealistic to build a plan to get you all the way to net zero by 2050. Technology and government policies will change. Management teams and markets will also change.

Instead, focus on a credible plan for major reductions in the next five to 10 years, ideally with a targeted reduction of about 50% over the next decade. Outsourcing your carbon-intensive operations is not the answer. Instead, actions typically must include:

• Renewable energy: Sourcing renewable energy, like wind and solar, instead of fossil fuels.
• Energy efficiency: Making buildings, transportation, and equipment more energy efficient.
• New products and services: Shifting to low carbon products (like electric instead of gas cars) or to services instead of products (like clothing repair services instead of new clothes).
• Supplier collaboration: Working with suppliers to help them reduce their emissions — which are part of your scope 3 emissions.
• Political advocacy: Using your time, communication channels and money to support political leaders serious about addressing climate change.

4. Publish the plan and report on progress.

With targets and plan in place, make a public announcement!

Your customers and investors gain confidence that you’re taking climate seriously. Your employees are likely to appreciate it as well. After your initial public announcement, get busy working on your plan and update your stakeholders regularly on your progress.

More formal reporting may well be required. Investors are urging firms to report under key reporting and disclosure protocols, especially the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).