It is time for businesses to push their decarbonisation targets further

Tough new standards for businesses to meet net zero could see many needing to review their sustainability strategy, writes AECOM’s Robert Spencer

It’s time to ask some tough questions about your business’ sustainability strategy.

Whichever way your business frames its decarbonisation targets, whether it is part of a broader environmental, social and governance (ESG) strategy or a stand-alone plan to reach net zero, new industry standards mean that the point at which your business declares it is net zero may need to be revised.

The main reason for this is that many businesses have built their net zero strategies around perceived best practice at a given moment in time – whether that was two or ten years ago. Since then, bodies responsible for verifying such plans have either set new standards or began the process to revise standards and so far, these new standards are significantly tougher than the previous perceptions around best practice in declaring net zero.

Take the Science Based Targets Initiative, it’s new Global Net Zero Standard clarifies that long-term deep emissions cuts of 90-95 per cent before 2050 are crucial for net-zero targets to align with the science, with only the final 5-10 per cent eligible for offsetting. That’s significantly less off setting than many firms are currently planning.

The impact of these new standards on businesses will be that they are going to have to work harder and go deeper into their supply chains to decarbonise before being able to declare they are a net zero business – offsetting will no longer provide a hiding place for those firms who might be over relying on it to reach net zero.

These new standards also mean that a business’s sustainability strategy will come under increased scrutiny. As industry and scientific standards for reaching net zero converge, shareholders, customers, clients and suppliers want to see evidence that your businesses strategy is aligned around climate risk and will ask tough questions if it isn’t. That’s why I suggest that it’s sensible to ask those tough questions of your business first.

Another impact is that we will see businesses factor a supplier’s strategy to reach net zero into their own business decisions. This might impact the field a company decides to work in or which suppliers they choose to work with.

Of course, I’m not saying any of this is straight forward. Sustainability initiatives are complex and last decades and involve difficult business decisions. At AECOM we’ve just launched the second phase of our own strategy, called Sustainable Legacies. While we’ve made great progress, such as achieving operational net zero across our Scopes 1 and 2 emissions for fiscal 2021, we’ve got a huge amount of work still ahead of us to reach our targets for Scope 3: our supply chain. We’ve initiated a supplier outreach program to insight into our key partners’ decarbonisation programs and evaluate to drive sustainability improvements throughout our value chain. Our view is that we would like to bring industry with us on our journey, supporting a wider drive to net zero.

Reaching net zero is not about the big declaration to do so, it’s about thousands of hours of work behind the scenes, looking through a carbon lens to rigorously unpack sometimes business relationships and practices, which have been in place for decades. It’s about continually challenging yourself and colleagues on whether you can do better and it’s about a robust and diligent data collecting and analysis process to back up decisions and strategies. It will be very difficult for businesses to meaningfully reach net zero without doing this heavy lift.

Doing business sustainably, with a view to reaching net zero, has got tougher. If your business isn’t already working as hard as it can get to grips with this, now’s the time to start.

Robert Spencer is AECOM’s ESG global practice leader

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