Carbon Neutrality vs. Net Zero
In the face of an escalating climate crisis, the terms “carbon neutrality” and “net zero” are staples of environmental sustainability discussions. These concepts represent two distinct strategies aimed at mitigating the detrimental effects of climate change. Crucially, they are not synonymous, and understanding their differences and relative impact is essential for grasping the nuances of our industry’s efforts and the global effort to combat climate change.
Distinguishing Carbon Neutrality and Net Zero
Carbon Neutrality: Carbon neutrality, when referring to Investor Relations activities, refers to when a company has balanced the emissions of carbon dioxide (CO2) it releases into the atmosphere with the amount it removes or offsets across the totality of its financial calendar and investor facing commitments. Achieving carbon neutrality means that every ton of CO2 your company emits is compensated for by the retrieval of the same amount of CO2 from the atmosphere. One example of this retrieval would be the purchase of carbon credits. We would help you with this process by calculating your emissions, having the calculation audited by a 3rd party, helping you to offset the total amount and then getting the process certified. We believe that this should be the absolute minimum for our industry.
Net Zero: Net zero is a far greater challenge but is believed to be more impactful. Achieving net zero requires a holistic approach that addresses all greenhouse gases (not just CO2) and aims to minimise emissions as much as possible before offsetting any remaining emissions. The emphasis here shifts to mitigation both for your company and crucially, for your supply chain.
Relative Impact and Importance
We believe that both are important strategies. Carbon neutrality is a useful starting point, as it requires a complete understanding of your Investor Communications schedule, the carbon emissions it produces and the relative carbon intensity of the different aspects (results presentations vs non-deal roadshows vs CMDs). This knowledge will act as the foundation for more ambitious goals.
Net zero is an example of a more ambitious goal. This requires a commitment to innovation and sustainable practices to drive a comprehensive reduction in all greenhouse gas emissions. Our longer-term goal is to help facilitate net zero for our industry via comprehensive mitigation strategies and assessed supply chains.
Challenges Associated with Carbon Neutrality and Net Zero
- Monitoring and Reporting: Tracking emissions accurately and transparently is a significant challenge but a vital first step. We are continuously improving our tool to enhance the accuracy and detail of the calculations we run for Investor Relations activities. The credibility of carbon neutrality and net zero commitments depends on accurate measurement and reporting, which can be complex and resource-intensive – we are here to simplify this process.
- Carbon Offsetting: There are legitimate concerns around the efficacy of Carbon Offsetting and the lack of transparency and regulation in the space. We are aware of these challenges and strive to remain at the forefront of progress and development when it comes to offsetting and offsetting alternatives. We will work to find the solution that is the most effective and that resonates with you, your SDGs and your brand.
- Regulatory Landscape: Regulation around carbon and greenhouse gas emissions is ever changing and complex with a lack of standardisation due to the evolving nature of the problem and its global nature. We can help you to navigate and we use third party auditing for all the calculations that we do to ensure compliance.
- Supply Chain Management: This challenge is often overlooked as it can be so overwhelming that it is difficult to know where to begin. This is the area that we are investing most of our time and resources into to be able to offer an assessed supply chain to our clients to increase visibility and transparency around their Scope 3 emissions. This is the key driver of longer term improvement and change as your supply chain accounts for a significant proportion of your company’s carbon footprint when it comes to Investor Relations.
In conclusion, carbon neutrality and net zero represent two distinct but interrelated strategies to combat climate change. While carbon neutrality is an important initial step in reducing emissions and demonstrating commitment, net zero sets a higher standard, demanding comprehensive greenhouse gas reductions and pushing the envelope of sustainability. They are both crucial to safeguarding our planet for future generations. Our immediate goal is to make carbon neutrality the industry standard for investor facing communication whilst striving to implement changes and enhance our product to get our clients and our industry closer to net zero. We are committed to a sustainable, climate-resilient future and are looking to build momentum around this topic and challenge and our industry. We want to hear from you about the challenges that you face when it comes to achieving carbon neutrality and ultimately net zero. Get in touch here to start the dialogue around this topic and sustainable Investor Relations practices more generally. We are ready and waiting to show you how we can help and support you with this process.