Businesses that do not have an implementation plan to reduce emissions and dependency on fossil fuels will become less attractive to consumers as we head toward the years 2030 and 2050. The Paris agreement outlines that all stakeholders need to be committed to achieving NetZero by 2050. Yet, businesses do not see how having a NetZero strategy will positively impact them in the long term.
At COP 27, the international organization of standardization (ISO) certification provided NetZero guidelines for businesses and organizations. The goal to achieve net-zero emissions is a collective effort involving all industries. It is expected that large multinationals with higher missions, such as Total Energies and Shell, must act fast. Nevertheless, all businesses will soon have to comply. The NetZero guidelines are meant to streamline the decarbonization process for businesses by having unified standards relating to achieving 45% less emissions by 2030 and NetZero carbon emissions by 2050, as outlined in the Paris Agreement.
Failure to have a net zero strategy or being a greenhouse gas emitter will make a business less desirable to consumers. The Ugandan East African crude oil pipeline project (EACOP) is a case in point. Over 20 bankers and insurance companies have pulled out from the pipeline project despite the enormous amount of money that the project is worth. Business trends from Europe suggest that having a NetZero emissions plan will soon be a regulatory requirement for businesses in all countries.
Companies in the transportation, fashion, and meat industries need net-zero emissions strategies because consumers are increasingly conscious of the ethical implications of these industries’ greenhouse gas emissions. According to surveys by the Standford business school and Deloitte in 2022, Gen Z is more likely to invest in companies with zero emissions or a net zero transition business model. Environmental concern is just as significant as the cost of living to young investors.
Civil societies have played a part in this transition, and the trickle-down effect is experienced across all sectors. Movements that are putting access to a clean and safe environment, protecting human rights, and preserving nature are inadvertently placing a moral standard on businesses and consumers. Looking at the just-concluded Davos 2023, the world economic forum reiterated the need to transition to net zero by using tangible commitments and not just false solutions or shallow agreements.
Movements like the Laudato Si Movement have been promoting ethical investments and the fossil fuel divestment movement after Pope Francis wrote an encyclical letter; Laudato Si’, about his concerns for humankind and the climate crisis. Caring about those disproportionately affected by climate change is at the center of most faith-based teachings and is a call to action for all of us.
Access to information shows the catastrophic consequences of failing to care about the climate crisis and instances where resources are being used to fuel war and political instability. In Ukraine and DRC, political instability is mainly driven by fossil fuels. The Laudato Si Movement, a movement that seeks to mobilize Catholics to action to care for planet earth, is at the forefront, calling for all Catholics to transition from fossil fuels and move towards NetZero emissions. Towards the end of 2022, over 40 Trillion worth of assets have been divested away from fossil fuels, promoting a NetZero pathway for businesses and institutions.
Because of international environmental agreements, science, civil society campaigns, and the current investment trends are shifting to favor businesses that do not contribute to the climate crisis. The decisions that leaders and organizations make now will impact their futures more than they can predict. Key players with a long-term aspiration to remain in business must start thinking about stopping the use of carbon and meeting practices and have an effective transition plan. Additionally, more people can learn more about what they can do to reduce their carbon footprint by joining the global divestment campaign.