Sustainability Self Assessment Tool

Often used interchangeably, the terms carbon neutral and net-zero could represent very different approaches to decarbonization and combatting climate change.   

At Schneider, this is how we define them - Companies that commit to carbon neutrality ensure that emissions produced by their activities will be balanced by an equivalent volume of emissions being removed from the atmosphere through an array of market mechanisms, such as carbon offsets. 

In comparison, net-zero is seen as best practice, as it’s more robust in both its definition and its guidance about how to decarbonize. Companies that commit to net-zero emissions promise to abate greenhouse gas emissions to as close to zero as possible, and then (and only then) neutralize any truly unavoidable residual emissions.

Natural capital is another term for the stock of natural resources (soil, metals, minerals, sun, etc.) and processes that corporations combine to yield a flow of benefits from them.

Soon, as a result of overuse, corporations will find it much more challenging and expensive to source many of the natural resources on which they depend. These natural resources underpin all economic activity, and all corporate value chains ultimately depend on one or more of these resources.

It is clear that corporations need to take significant action to operate more harmoniously with the natural world – through initiatives such as circular economy, biodiversity and water conservation, etc.

Scope 1, 2 & 3 are key terms across the industry, but what is the true definition and importance of them? In this context, all

scopes only refer to the reduction of greenhouse gas (GHG) – e.g. companies ‘carbon pledges’ or ‘Net Zero targets’.

Scope 1: Refers to the companies own operations (including fuel combustion, company vehicles and emissions)

Scope 2: Refers to the company’s energy providers emissions e.g. Purchased energy, heat and steam

Scope 3: Refers to the company’s supply chain, including both upstream (the creation of productions/solutions through suppliers) and downstream (the distribution of products/solutions, and the end of life management).

Our climate change emergency is developing at daunting speed. The window of opportunity for combating climate change is closing.

Through modelling several climate transition scenarios, the IPCC has shown that global emissions need to be reduced by 30%-50% by 2030, compared to 2018 levels, for us to have a fighting chance of limiting global temperature increases to 1.5 degrees (Celsius).

Essentially, if we’re to take the objectives of the Paris Agreement seriously, then we need to get serious about making substantial progress by 2030.