We asked Mike Scott, a past winner of the Contribution to Climate Change Journalism award, for his guide to some of the key terms that you need to know and what they mean to your organisation. Over to you, Mike…
The science
Why does all this matter? For decades, climate scientists around the world, under the auspices of the Intergovernmental Panel on Climate Change (IPCC), have been reporting on the impacts a warming world will have. These include sea level rise and more frequent and more extreme weather events – including flooding, drought, heatwaves and superstorms. In 2022 alone, we saw devastating floods covering one-third of Pakistan in floodwater; 40ºC+ temperatures in Europe and a megadrought in East Africa, to name but a few. Because of greenhouse gases (GHGs) already emitted, which cause climate change, we know that temperatures will increase further and these impacts will get worse.
When the IPCC first started publishing its reports, it thought these impacts were likely, but it wasn’t totally sure. Now, the scientific consensus around climate change is much more certain.
So, what do we do about it?
Net zero, Carbon-neutral and all that jazz
You’ve probably heard the term net zero – it’s been everywhere over the past few years – but what does it actually mean and why is it important?
We need to start in 2015, at the Paris Climate Conference. Every year, the parties to the United Nations Framework Convention on Climate Change (UNFCCC) meet to discuss how to tackle climate change – the UN calls these Conferences of the Parties (COPs) and they are held in a different country every year. COP26 was held in Glasgow in 2021, COP27 was in Egypt and the next one, COP28, will be in the United Arab Emirates at the end of the year.
The Paris meeting was the most important of recent years because it forged the Paris Agreement, which committed countries to keep average temperature rises (compared to pre-industrial times) to “well below 2ºC”, with the aim of limiting them to 1.5ºC. This target is not arbitrary – it’s the level above which the impacts of climate change start to get dangerously out of control.
In 2018, an IPCC report said that to reach the 1.5ºC target, the global economy needs to be at net zero emissions by 2050. “The term net zero means achieving a balance between the GHGs going into the atmosphere and those taken out,” says SSE Energy Solutions. “Many scientists suggest that achieving this balance will mean that global warming stabilises. Carbon dioxide (CO2) is the most plentiful greenhouse gas, and human activities are increasing the amount in the atmosphere.” CO2 is released when fossil fuels are burnt, in vehicle engines, power stations and industrial facilities such as steel smelters and cement kilns.
While net zero is the current buzzword, many people still refer to ambitions to become carbon-neutral. What’s the difference? It’s a question of ambition, mainly.
According to National Grid, “net zero refers to the amount of greenhouse gases (GHGs) that are removed from the atmosphere being equal to those emitted by human activity”. Any emissions that cannot be eliminated must be offset by projects that remove an equivalent amount of GHGs from the atmosphere, such as planting trees or direct air capture, a new technology where CO2 is removed directly from the atmosphere.
Carbon neutrality is similar, but less rigorous, which is why it has been largely superseded by net zero. It focuses only on CO2 rather than all GHGs and generally includes a wider definition of offsetting residual emissions, including emissions avoidance activities, and wouldn’t prescribe a specific reduction trajectory. It's also less prescriptive regarding the reporting boundary, with the inclusion of emissions from the wider value chain (Scope 3) being encouraged but not mandatory.
Climate positive, says sustainability software group Plan A, is a term that means “activity goes beyond achieving net-zero carbon emissions to create an environmental benefit by removing additional carbon dioxide from the atmosphere”. Unhelpfully, it adds that “carbon negative means the same thing as climate positive.”
Greenhouse gases
It's not the only GHG, though. Methane (natural gas) is generated by livestock, as well as other farming activities and landfill decay. Methane makes up around 10% of the GHGs, but it’s much more harmful than CO2.
Nitrous oxide is generated through various agricultural activities, burning fossil fuels and water treatment processes.
Because CO2 is the most common GHG, the sum of all GHGs taken together is known as CO2-equivalent or CO2e.
Governments set out how they will meet their climate targets in nationally determined contributions (NDCs). While many governments have set net-zero targets, because we know how much CO2 we can emit as a planet to stay within this limit, this can be translated into a figure for every person and company – if we emit this much, it keeps us on the path to 1.5ºC. But, points out Antoine Poincare, head of French insurance company Axa’s Climate School, which aims to educate companies on climate change, “that does not mean a product or a company can be net zero. It has no meaning, and if you claim that, you are greenwashing.” This is when a company exaggerates its green credentials or downplays its environmental risks to make it seem more sustainable than it is.
Mitigation and adaptation
There are two key approaches to tackling climate change. Mitigation is all those measures to cut greenhouse gas emissions, such as renewable energy, electric vehicles and energy efficiency.
But because CO2 remains in the atmosphere for about a century, we know that a certain amount of warming is already built in from GHGs already emitted, and we are starting to see the impacts already. That means we must also implement adaptation measures that will help us to deal with climate impacts – these are moves such as building coastal defences, reducing water use, or planting trees upstream to reduce flood risks.
It is not just countries that are setting net-zero targets – companies are, too. But the definition of what constitutes a company’s emissions can be confusing. At first, the focus was on emissions from a company’s own operations (known as Scope 1 emissions), then this expanded to emissions from fuel, heat and power the company buys in (Scope 2). However, for some industries, the bulk of their emissions occur outside of their own operations, either in their supply chains (such as supermarkets, where emissions from the suppliers of the food and drink they sell have high emissions) or from the use of their products by customers, as is the case for oil companies and carmakers. These are known as Scope 3 emissions.
It is not enough for companies to just pluck a net-zero target out of the air – to be credible, it has to be verified by the Science Based Targets initiative (SBTi), which gives companies advice on how to set targets and what they need to do to achieve them.
This is just one of a growing number of demands on companies in relation to climate change.
The rules and regulations
- Creating a net zero economy: Three principles for leaders
- Time to make the change: we’ve gathered all ManagementDirect resources about change management (available exclusively to CMI members)
- This is not a drill: this edition of CMI’s member-only magazine focused on the challenges of climate change and employee activism
Increasingly, investors and regulators are asking companies to disclose their climate risks, through initiatives such as CDP (previously known as the Carbon Disclosure Project). Watch out, too, for the International Sustainability Standards Board, which is set to release its first two sustainability-related reporting standards by June.
In the UK, climate risk disclosures are now mandatory, and in the US, the Securities and Exchange Commission is considering its own disclosure requirements, while the EU has a host of regulations under the umbrellas of the EU Green Deal, including the EU Emissions Trading Scheme, where the price for a ton of carbon hit €100 in early 2023 for the first time.
But there are incentives, too. In the US, the Inflation Reduction Act provides significant subsidies for a host of low-carbon technologies. These technologies, which are being deployed around the world, range from the well-established – such as renewable energy technologies such as wind and solar power, electric vehicles and energy efficiency measures – to less mature options such as carbon capture, utilisation and storage (CCUS), energy storage and hydrogen.
Mike Scott writes on the scientific, social, economic, political and business/investment issues around environmental subjects. He worked for nine years at the Financial Times as well as at the London 2012 Olympic Games. He won the Contribution to Climate Change Journalism award at the 2021 Sustainability Media Awards.