What are the implications of this net zero transition?

So how can a company reduce the amount of carbon it generates?

At a broad level, there are three options—create low carbon products, manufacture in a way that cuts down emissions and low carbon logistics for sourcing raw materials and supplying to end consumers. With investors demanding increased transparency, carbon footprints and reporting is no longer optional. For some brands, carbon is becoming part of the core brand proposition as several companies have announced that they will be carbon labelling their products. For instance, Unilever, one of the world’s largest FMCG companies, said that each of the company’s 70,000 products would show on their labels how much greenhouse gas was emitted in the process of manufacturing and shipping them to consumers.¹ Now with market leaders creating products, communication and tools to map carbon impacts, there is hope that we might be able to cut carbon at scale. The carbon conversation is now part of the brand and carbon reporting, compliance and capture are likely to pick up speed. 

1. Green supply chains – The choices made by the big brands will impact global supply chains and unleash second and third order effects in products, materials and components / ingredients.
2. Brand purpose – With their products being inherently sustainable, brands will use this to drive trust and distinctiveness in consumer communication.
3. Digital innovation – Driven by AI, cloud and IoT, this will make products more intelligent and also drive the ability to cater to customer demands.
4. Strategic partnerships – These will emerge to navigate the new paradigms of sustainability, digital innovation and sustainable markets. Peer learning and knowledge sharing will play an important role in raising standards for a net zero world. For instance, the Fashion Industry Charter for Climate Action has Adidas, Nike and Decathlon France as signatories amongst others.²
5. Energy transition – While factories will shift to renewable energy, so will offices and stores.
6. New Design – Necessitated by the cost of managing reverse supply chains and inspired by consumer demands, products will be radically redesigned—natural, local, environmentally friendly themes will be prominent.

Around half of the companies studied mentioned that they aspire to make their operations carbon neutral. And 70% of them mentioned specific timelines to achieve these targets.

Renewable energy, increasing energy efficiency, purchasing carbon offsets and partnerships are the most common strategies being implemented. Companies are adopting net zero pathways as part of core business strategies either because they don’t want to be left behind and  international buyers are demanding that they be net zero . For multinational companies such as Bosch and LafargeHolcim, net zero commitments and targets cascade down from their international headquarters. Some companies also mentioned that they contribute to community projects that help them offset their emissions from operations – Infosys especially does this.

Measures to achieve Net Zero

The companies with notable reduction in emissions in the last 2 years are MindTree, Titan, Aditya Birla Fashion & Retail, L&T Infotech, Infosys, Marico, Tech Mahindra, Wipro, HDFC Bank and RBL Bank. Others are making significant efforts to create strategies for Net Zero pathways. A notable mention needs to be made of energy companies who have a rapid scale up and business transformation ahead.

Top 10 companies with % emission reduction

Net Zero aspirations are a great beginning, but much more needs to be done →

¹ ‘2 billion people use these products. By 2030 they’ll be biodegradable’, Hanna Ziady, 7 July 2020, https://edition.cnn.com/2020/06/15/business/unilever-climate-change-commitments/index.html
² https://unfccc.int/climate-action/sectoral-engagement/global-climate-action-in-fashion/about-the-fashion-industry-charter-for-climate-action