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PA IN THE MEDIA

Here’s Why Carbon Net-Zero Is Not Enough To Make Sustainability A Reality

This article was first published in Forbes

It’s been impossible to ignore the recent tidal wave of corporate pledges to achieve carbon net-zero. Ahead of hosting COP26, the UK government announced in March that over one-third of the UK’s largest businesses had committed to net-zero by 2050 – a worthy goal, if still a distant one.

While steps to achieve carbon net-zero in line with the Science Based Targets initiative will always be welcomed, there is one problem: carbon net-zero is not enough.

Sustainability, at its heart, helps businesses ‘do the right thing’, taking concrete steps to help people and planet – and ideally benefitting profit as well. What a laser-focus on decarbonisation and net-zero does, however, is hone in on just one single element of the whole sustainability equation – leaving much by the wayside. However inadvertently, this pushes back the likelihood of achieving anything meaningful. What’s more, the pledges made are all too often “distant and hollow”, having little real impact on planet and people, with too much focus on profit.

Real problems need real solutions

We have seen countless drivers in recent years for the rise in climate action, from wildfires in California and Australia, to dwindling biodiversity, to a slew of documentaries and global campaigns elevating the consumer consciousness and calling out the human costs. These are all very real problems, which need very real solutions.

So what do these real solutions look like? Taking inspiration from the uptick in zero carbon pledges, businesses can start by applying a net-zero approach to all aspects of sustainability. Starting with decarbonisation is great – but it should just be the start. Packaging, product, water, and waste are just as worthy of our attention.

Let’s take an example from the food and beverage industry as a starting point. The beverage sector is growing, and is expected to reach a market size of almost $1.9 billion by 2024, as disposable income grows and consumers crave new, healthier options. One of these healthier alternatives is flavoured or fragranced water – so far, so standard.

But think about this: the UK consumes 2.8 billion litres annually of bottled water alone. This number isn’t inclusive of any other bottled drink, nor any of the water it takes to produce drinks in the first place. In 2015, research into a large soft drinks companies’ water use in India estimated that up to 400 litres of water were used to make each 1l drinks bottle, when taking sugarcane production into account. While things have improved since then under pressure from environmental groups, it’s a strong indication of quite how much of the water we use doesn’t end up in our glasses at home. And that’s not even touching on the issues water consumption throws up around inequality in disadvantaged regions.

Net-zero everything

What if, then, beverage companies were to formulate and apply a net-zero approach to the entirety of their production process? Looking first at product, businesses can rethink their product strategy around adding flavour or fragrance closer to the point of sale, whether in local production plants, or in shops, restaurants, or even at home at the point of consumption.

By addressing product first, beverage companies will no longer need to ship billions of bottles of water around the world unnecessarily. This would of course reduce carbon emissions, but it would also reduce packaging and waste, both in the production process and the end product. This approach would also greatly decrease the amount of water taken to make the product in the first place – and if the final stage of production is made more ‘local’, producers can take the water they do need from regions closer to the end consumer, rather than disadvantaged communities.

Creating value from upheaval

What prevents many businesses from taking such measures is fear of impacting the bottom line. What so many boardrooms fail to address, however, is how an overhaul in product strategy – or water usage, packaging, or waste reduction – might actually increase profit. This is especially prevalent now that catering to the conscious consumer is a business priority.

In the bottled water example alone, businesses could benefit from the reduced manufacturing costs of smaller packaging, and significantly lower shipping costs – both of which would bolster the bottom line. Meanwhile, the innovation in creating truly climate-friendly products – and the brand building that comes with offering them – is a brand new opportunity for value creation. At PA Consulting, we’ve teamed up with PulPac to help organisations create sustainable alternatives that can replace single use plastic at a lower cost. All it takes is a focus on the right strategy to make sustainability not only a reality, but a lucrative one that any investor will get behind.

The way forward

Put simply, focusing on decarbonisation alone is simply kicking the can down the road – at the expense of real sustainability. It’s certainly much easier for boardrooms to pledge carbon net-zero in their annual report than it is to transform their business around a tangible, value-creating sustainability model. But it’s also a waste of time – for investors, for employees, and for the planet. 

Applying the concept of net-zero to a much broader set of sustainability goals is the way we change for good. What’s more, ESG needs to be measurable – and, crucially, measured – so solutions need to be tangible and value-creating to become a reality.

By giving equal weight to water, packaging, product, waste and carbon, and bringing them together under one measurable sustainable strategy, businesses can do more than just talk the talk and commit to far-off goals. They can effect real change by creating real solutions to real problems – and keep investors happy at the same time.

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