Is a zero-carbon future possible?
All companies should seek to achieve zero carbon emissions if they want to maintain market share.
The costs of going zero carbon aren’t as high as many think: entire cities have achieved zero carbon, and some of the world’s largest countries are on the way to doing so too.
Combining sustainable technology and employee engagement gives businesses the best chance of reaching zero carbon.
In the wake of 2015’s COP Conference, which called for the world to achieve zero carbon emissions by 2050, carbon neutrality was the hot topic for businesses. Corporate giants and smaller organizations alike pledged their support in various high-profile initiatives that further fueled the zero-carbon fire. But just over a year later, with geopolitical instability and market turbulence weighing heavily on most business leaders’ minds today, is such a future still worth pursuing? Is a zero-carbon world even possible?
“The easy answer is: absolutely,” says Andrew Winston, an internationally-acclaimed environmental consultant for some of the world’s largest multinationals. “Driving emissions down creates business value in several ways: it saves money, reduces risk, drives innovation, and builds brand value.”
Doing away with carbon emissions entirely may seem a daunting, if not impossible task for most businesses, particularly in Asia where environmental awareness has been relatively slow to build momentum. Yet some of the world’s largest companies, including DHL, have committed to just that – and it may prove easier than we might think.
Zero-carbon: In the public (and private) interest
More and more businesses, including those in Asia, have recognized that their continued growth relies heavily on their approach to issues like carbon neutrality. 56% of Asian companies now report on wider sustainability and CSR performance to the board – more than in either Europe or the US. Consumer behavior in Asian powerhouses like China and India increasingly favors low-carbon products – at least where the environmental impacts of different choices are made patently obvious.
“In some countries, certain types of vehicle engines are already banned from the city centers, and we believe that we will see more regulations and restrictions emerging in this area as more states seek to establish zero-carbon cities,” says Umesh Mishra, Regional Senior Advisor, First Choice & Strategy at DHL Global Forwarding. “In these cases, it is not possible to transport goods unless you have environmentally-friendly transport solutions in place. Companies should not worry about margin erosion so much as keeping their ‘license to operate’ in their current and planned markets.”
In terms of hurdles (to achieving zero carbon), often it’s just a challenge of organizational inertia and the belief that it’s not possible.
Paradoxically, public pressure to curb emissions can make it easier for businesses to get to zero-carbon. Most economic forecasts suggest that zero-carbon government policies can be enacted at only “modest cost” to GDP and economic growth, even for high-emissions countries like China. In other parts of the world, zero-carbon has already become a reality: Denmark’s Samsø island took less than a decade to decarbonize its energy grid at minimal cost to its people. These encouraging signs, coupled with the risks of inaction – like the erasure of more than 10% of South-East Asia's GDP within the century – have spurred governments region-wide to invest in cleaner infrastructure and technology on the national level.
“No country in the world has invested more in clean energy than China: the government has committed another $350 billion in investment between now and 2020. And India is embarking on very large investments in low-carbon infrastructure, particularly solar,” says Winston. “All of that growth in clean energy makes the grid cleaner, and thus helps any companies that use the grid to reduce their emissions.”
A question of technology
It takes more than just public-policy momentum for businesses to reach carbon neutrality, however. At the start of 2017, DHL announced plans to achieve zero carbon emissions globally by 2050, with milestones such as increasing its carbon efficiency by 50% and using low- or zero-carbon vehicles for 70% of its deliveries by 2025. Much of that plan to reduce its carbon footprint revolves around technology, including everything from more aerodynamic “teardrop”-shaped trailers to the StreetScooter, an electric delivery van commissioned in 2015 especially for the company’s needs.
“New and clean technologies were not always available or did not fit our business needs,” Mishra explains. “That’s why we teamed up with partners to develop and pilot new technologies like the StreetScooter, as well as investing in promising new technologies like electric vehicles for last-mile deliveries.” It’s an approach which has already proved promising despite the challenges of transforming one of the world’s most energy-intensive industries: DHL’s freight fleet now includes more than 2000 StreetScooters, with production numbers expected to rise rapidly.
“Most companies, when they talk about going zero-carbon, are talking primarily about energy from electricity,” Winston highlights. “Getting to zero on the emissions from the fuels used in logistics is a different – and arguably much harder – challenge.
"While the future is very bright for electric vehicles, hybrids, and other alternative fuel vehicles – biofuels, liquid natural gas, and so on – it would be near-impossible to reach zero-carbon transportation with the technology today. But like with clean energy, the clean technologies that support zero-emissions vehicles are getting cheaper very quickly.”
The earlier companies make these technologies a part of their emissions strategy, the easier it’ll be for them to reach a zero-carbon target in the future – and the larger the dividends for their business even in the short-tem.
“Companies save money by using less energy, and clean energy is not only cheaper in many locations, but also getting cheaper very fast,” Winston says. “Continued advancements in telematics and technology for routing create incredible efficiencies, as well as new business models and apps for filling trucks. Automated vehicles will likely be much more efficient in coming years. But in terms of hurdles, often it’s just a challenge of organizational inertia and the belief that it’s not possible.”
Power from the people
In fact, attitudes and personal engagement play an equally – if not more – important role as technology in a successful zero-carbon strategy. “The main hurdles for businesses are really: having the leadership and will to make the changes, establishing a comprehensive and consistent approach to this with an independently verified certification scheme and maintaining follow-through as part of ‘business as usual’,” says Rachel Brown, CEO of the Sustainable Business Network. When DHL devised its strategy for meeting to meet its original 2020 zero-emissions target – achieved 4 years ahead of schedule – its teams focused on the smallest of behaviors first.
Reducing carbon emission and improving a company’s carbon efficiency is the only way of having a business in the future.
“One of our first steps was to make our employees aware of how they can contribute – by switching off unused electric equipment, being mindful of heating and air conditioning, and undergoing driver training to help them be more efficient on the roads,” says Mishra.
“Now, our focus is on offering our employees special GoGreen (environmental sustainability) training and motivating them to take part in environmental and climate protection activities.”
“GoGreen is not an added responsibility: we want to make environmental efficiency a natural component of our business – something we all think about in our day-to-day work.”
That focus on behavior and values can, if fostered correctly, become a source of competitive advantage and improved margins as well. “The cheapest kilowatt is the one that’s not needed,” Winston says. “If you can engage employees to find savings, even while you explore your options for renewable energy, you have a strong chance of reaching zero-carbon while also improving the health of your corporate culture and bottom-line results.”
Cultural change rarely happens overnight, but that’s just more reason to start early. “We believe that reducing carbon emission and improving a company’s carbon efficiency is the only way of having a business in the future,” says Mishra. And while market fluctuations may come and go, the consequences of climate change are here to stay – making zero-carbon business models an especially valuable long-term investment.
A ZERO-CARBON BUSINESS IN 3 STEPS
- Define and identify your current emissions. “Are you including just emission from power/electricity, or also from fuels?” asks Winston. “Do you mean the carbon emitted by your own operations, plus emissions from the electricity you buy from the grid: so-called ‘Scope 1’ and ‘Scope 2’ emissions? How about your suppliers and value chain partners?’ Once you answer those questions, benchmark those emissions in a way that can be easily reassessed and quantified to stakeholders.
- Get others involved. Apart from engaging employees, talk to other companies that have embraced renewable technology, or working groups on corporate renewables. “Companies are sharing their best practices, so you don’t need to start from zero,” Winston says. Brown advises businesses looking for strategic guidance to make sure their partners operate to standards like ISO 14064 and PAS 2050. “This gives you the credible platform to work with,” she emphasizes.
- Be ambitious in your targets. “Set aggressive, science-based goals on carbon reduction to drive change and set the right speed,” Winston encourages businesses. Only with ambitious targets can business leaders convince the rest of the organization to act.