Crossing the Line to Net Zero

A new South Pole report: the state of Net Zero commitments

The emergence of a Net Zero mindset

Today, the COVID-19 pandemic has propelled Net Zero and climate action to the top of the corporate agenda, as companies and countries recognize their vulnerability to global events and make efforts to build resilience across value chains. Net Zero is synonymous with real and ambitious action on climate change – the ultimate goal for a greener future.

However, a South Pole report based on a survey of over 120 sustainability leaders from key sectors - including industry, consumer goods and services, property and construction, and finance - finds that only about half of companies and organizations who have set Net Zero targets, have also set concrete milestones to get there. Are leaders talking the talk, but not walking the walk? Is this setting them up for accusations of greenwashing?

This South Pole report looks at the gap between ambition - in the form of Net Zero and Science-based targets - and concrete climate action.

Main findings

An avalanche of organisations have set Net Zero targets. Net Zero commitments have doubled in less than a year according to UNFCCC.
Net Zero planning doesn’t match the ambition – leaving firms open to accusations of greenwashing
Despite the lack of Net Zero planning, decarbonisation efforts are immune to COVID-19 - most organisations’ climate mitigation efforts have either remained the same or accelerated through COVID-19.
COVID-19 is making organisations ‘Net Zero-ready’: Many organisations have realised that they are vulnerable to external shocks and are thinking strategically about what could be the next one: the climate emergency.
Net Zero presents a major opportunity to reset the ambition of organisations, build resilience and mitigate vulnerabilities to shocks. But clear, actionable milestones that focus the efforts and monitor progress must be put in place to ensure credibility.

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COVID-19 is making organisations 'Net Zero-ready'

Our research shows that, perhaps contrary to some predictions, the private sector seems to be taking the impact of COVID-19 as a wake up call to increase action on climate mitigation. We call this an emerging 'Net Zero-ready' mindset, where an avalanche of companies are setting Net Zero targets and dialing up their sustainability efforts despite the uncertainty and financial and social chaos of the past year.

Excitingly, many companies are actually using this pandemic to recognize and analyze their vulnerabilities, and accelerate climate action. Most organisations' climate mitigation efforts (65%) have either remained the same through COVID-19 (38%), or even actually accelerated (27%).

The majority of our survey respondents reported an increased focus on innovation and collaboration, plus supply chain resilience, following the pandemic. This is an exciting indication that the incremental change we have seen over decades is possibly being replaced by bigger, bolder climate action, which certainly supports the journey to Net Zero.

Image - Job role of survey respondents
South Pole's new report reveals that COVID-19 has been a catalyst for innovative thinking and building resilience to disruptive events

Image - Breakdown of surveyed sectors
Most popular drivers and enablers among survey respondents for reaching Net Zero targets

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More work needs to be done to bridge Net Zero ambition with action

Despite the emerging 'Net Zero-ready' mindset, our research also indicates that there is still work to be done to bridge the disconnect between organisations' ambition and their climate action: half of the executives polled in our survey work for organisations that have set Net Zero targets, but about half (48%) of those organisations have not set tangible milestones to reach their targets. This is possibly setting them up for accusations or greenwashing.

Organisations big and small now need clear and credible plans to reduce and compensate for emissions in the near term, plus a view to realise cost-effective carbon removal opportunities over the long term, through practices such as nature-based and technological solutions. Decarbonisation represents a key opportunity to insulate organisations from the risk of future external shocks, including climate change, while earning brand leadership positions in the nascent Net Zero space

Crucially, C-level executives (including CEOs and CFOs) are trusted by most CSR and environment professionals to have the knowledge and expertise to lead the race to Net Zero. Given that the risks and opportunities associated with climate change are so integral to the success of an organization, it is encouraging that the awareness of these issues seems to have spread beyond just the CSR staff.

Survey of sustainability leaders finds that climate ambition is growing - but there is a disconnect between ambition and action on Net Zero.

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Renat Heuberger, South Pole CEO

“Net Zero is not just a buzzword; leaders must show that they are serious about taking action. And right now is their chance to turn threats into opportunities: the post-COVID-19 recovery can be used as a catalyst for innovative thinking and enhanced climate action."

The journey ahead

Despite the challenges of COVID-19, the momentum of most organisations on climate action seems unhindered, signalling that sustainability is being viewed as a proxy for efficiency and profitability in the coming global depression.

The first movers to pursue corporate Net Zero targets will be the leaders and advocates for changing the way we do better business. The triple bottom line benefit of pursuing a Net Zero journey with robust milestones is clear – from aligning with the global climate policy agenda, managing risk, or driving reputation and competitive advantage.

As corporate boards take stock and revamp their strategies, now is the time to align COVID-19 recovery plans with pathways to Net Zero.

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Getting to Net Zero

Our experts have tools and techniques to help you formulate your Net Zero strategy, set science-based targets and develop and implement ambitious reduction strategies, wherever you are on your Climate Journey.

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News

Read the South Pole Press Release about how COVID-19 is making organisations 'Net Zero Ready' - but few have set concrete milestones.

#OurClimateJourney is yours too

South Pole believes that a Net Zero target is a part of every organisation's Climate Journey. Our experts have tools and techniques to help you set science-based targets and develop and implement ambitious reduction strategies.