PROGRESS TOWARDS NET-ZERO BY 2050 - CHALLENGES, TRENDS AND TEAMWORK
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PROGRESS January 2018 TOWARDS NET-ZERO BY 2050 CHALLENGES, TRENDS AND TEAMWORK
MESSAGE FROM OUR 2
NET-ZERO BY 2050 WORKING
GROUP CO-CHAIRS
We are unusual collaborators. One of us the GHG emissions by 2050 whilst upholding the fun- our current actions and the action needed to stay on where companies on their journey to net-zero
first woman President of Ireland (1990-1997), damental rights of the people who have contributed well below 2°C, aiming for the much safer target of are, what they are finding challenging and how they
well known as a global human rights advocate least to this crisis and who are most vulnerable to its 1.5°C above pre-industrial global temperature. The are benefiting.
who champions the voices of the people most impacts. The transition away from fossil fuels must Global Climate Action Summit in California, G20
vulnerable to climate change. The other, a for- be one that protects workers, upholds rights, cre- meetings and COP24 must be occasions where non- We hope you find these stories helpful, and if you
mer CEO of a Fortune 200 US Power company, ates opportunity and protects the planet. We must state actors and governments digest the IPCC report happen to be a business leader yourself, you will
which was one of the largest power generation not miss the opportunity this transition provides to message, demonstrate what they have achieved and consider joining us and adding your own story at this
companies in the world and which emitted build a new, more equitable, more socially inclusive learnt so far, and commit to continued innovation and pivotal moment in the history of mankind.
more than a billion metric tons of carbon di- economy that leaves no one behind. This is a huge learning to go further, faster.
oxide (CO2) into the atmosphere during his undertaking and, as our fellow B Team Leader Chris- Best wishes,
tenure. tiana Figueres remarks, this is one moment where we This B Team progress report is a small contribution to
must not be late. demonstrating what we have learned as part of our
We co-chair a working group of perhaps even commitment to a just transition to net zero by 2050.
stranger collaborators, from Founder of the Virgin Thankfully for all of us, the business case for action is By sharing our experience and progress to date we
Group Richard Branson and CEO Oliver Bäte of Al- now undeniable. The business opportunity to lead aim to inspire other business leaders to undertake David Crane Mary Robinson
lianz, to Sharan Burrow, the General Secretary of the this transformation is historic and, as you will read their own net-zero journey. It provides transparency
International Trade Union Confederation. Our group in the pages that follow, our B Team companies are
of 12 leaders come from different geographies, sec- demonstrating the cost savings, risk mitigation,
tors and backgrounds, but the thing we all have in reputational benefits and new markets that can be
common is a vision, and imperative, to accelerate the accessed by businesses taking climate action. Invest-
transition to a just and thriving net-zero greenhouse ment capital has also begun the giant shift necessary
gas emissions (GHG) economy by 2050. A shift to fuel this transition.
which will forever decouple economic growth from
emissions, uphold human rights and set the world Yet despite these efforts, most of commitments made
on a trajectory to create a prosperous world for our by the global business community are promises to
children and grandchildren. be kept rather than a proven track record of the in-
novation, courage and tenacity needed to reach
We see no room for half measures, pointless debate zero emissions by 2050. 2018 is a crucial year to
or excuses for inaction. For the well-being of humani- change this. We anticipate that the findings of the
ty, and for the future of business, we must peak global Intergovernmental Panel Climate Change’s Special
emissions in 2020. Equally, we must reach net-zero Report on 1.5° will reveal the large gap between
Net-Zero by 2050 Progress Report January 2018
INTRODUCTION TO THE 3
B TEAM AND OUR WORK
ON NET-ZERO BY 2050
However, B Team companies realised that individual When a number of B Team companies made the companies also committed to working together
About The B Team company action on their own operations, although commitment to putting their businesses on a road beyond the four walls of their company, using their
greatly necessary, was not enough. The B Team to net-zero by 2050, they openly admitted that they business models and their spheres of influence to
Leaders and companies supported the Net-Zero didn’t have all the answers of how they were going shift competitors, policy makers and consumers to-
We are a group of global leaders
greenhouse gas emissions by 2050 aspiration for a to get there. In fact, no one could effectively answer wards a low carbon economy. These companies
working together to redefine the
simple reason: it was what leading climate scientists how the global economy, with its current constraints, have advocated for ambitious policy and acted as
role of business as a force for so- were saying was needed to have a chance of staying was going to transition on the timescale needed. a countervailing force against those who attempt
cial, environmental and economic below 1.5°C warming from pre-industrial levels, and to block progress, exampled by their group efforts
progress. stave off the worst effects of climate change. To build the Net-Zero economy by 2050, B Team around US domestic policy as reported on p13.
They have also demonstrated and advocated for
Our mission is to catalyse a move-
good corporate governance through supporting
ment of business leaders driving Comparing allowed emissions trajectories between the 1.5°C and 2°C limits1
and implementing the Task Force on Climate-Related
a better way of doing business,
Financial Disclosure (TCFD) recommendations and
for the wellbeing of people and testing new initiatives within their business models,
the planet. 1.5°C Limit 2°C Limit
such as internal carbon prices.
Our approach is to find business- Amount of emissions
The goal of this report is to assess our achievements,
based solutions and lead by exam- possible (from yr 2012) before 300 GT CO2 1010 GT CO2
temperature limit is hit share challenges and lessons learned, and provide
ple, grow and lead a movement by
case studies and examples for other businesses con-
using our collective voice, and to Year by which global sidering the journey to net-zero. Just as importantly,
drive long-lasting and systemic Before 2020 Before 2020
emissions must peak it aims to encourage further teamwork and collabo-
change. ration amongst B Team businesses and beyond to
Required reduction in global
emissions by 2050, from 2010 70-95 percent 49-72 percent drive ambition within companies.
The Paris Agreement catalysed unprecedented levels
business action on climate. Today more than 650
Year by which global energy
businesses, with more than US$15.6 trillion in market
and industry emissions must 2045-2055 2060-2075
capital have made climate commitments. And these be phased out
numbers keep growing. Thousands of companies
are reporting absolute reductions in emissions. The
B Team companies in this report are among them. Source: “Assessing Transformation Pathways”, Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC).
1
Net-Zero by 2050 Progress Report January 2018
THE CHALLENGE 4
OF GETTING TO
NET-ZERO BY 2050
The B Team companies working towards net-ze-
ro are from a diverse set of industries across What does Net-Zero
Getting to net-zero - Nine challenges to overcome
the globe. Each face unique challenges and Greenhouse Gas Emissions by
opportunities, yet common challenges can 2050 mean for a company?
be identified. We have identified nine in this
report. Some of these are solved within a com-
1 2 3
pany’s own operations, but to overcome most
Take emissions
Take emissions to
to net-zero
net-zero
of them companies are required to go beyond
their four walls and work in partnership with
Scopes 1, All greenhouse
other actors.
2 and 3 gas emissions
Planning, engaging & Doing more Cleaning up our
Taken together, the following challenges, and the implementing with less energy supply
Covering your Carbon Dioxide,
responses to them, begin to build a picture of how operations, energy, Methane, HFCs,
the whole economy can transition to net-zero GHG supply chain, CFCs, Nitrous
emissions by 2050. 4 5 6 product & related Oxide
consumer emissions
Explaining Scopes 1, 2 and 3
For some companies, who rely on more intensive pro- By 2050 at the latest
duction and manufacturing processes, a significant
Reducing emissions in Building a net-zero world Empowering boards
proportion of their emissions are considered scope supply chains through our products of directors
1 emissions. For most of the companies in this report
however, a greater proportion of their emissions are
generated elsewhere in the value chain, outside of 7 8 9
their direct control, such as through electricity use
(scope 2 emissions), or by their supply chains or
customers (scope 3 emissions).
Making the right Ensuring we make Encouraging
investments a just transition transformative policy
Net-Zero by 2050 Progress Report January 2018
CHALLENGE 1: PLANNING, 5
ENGAGING AND IMPLEMENTING-
SETTING AN EMISSIONS
REDUCTIONS STRATEGY
An often overlooked yet crucial stage of the • Understand your impact: Conduct an emis-
corporate journey to net-zero is the process sions profile and footprint analysis, stakeholder
a company undertakes to plan out its journey interviews and a materiality assessment.
to net-zero. Each of the B Team companies
have developed customized strategies that • Set a target: Declare the direction the com-
match the character, mission and culture of pany intends to go.
their business.
• Develop a strategy: Conduct a collaborative
Dow demonstrates its strategy through the headline: strategy process with key decision makers, rele-
Footprint, Handprint and Blueprint, which commu- vant teams, workers and impacted communities
nicates their commitment to minimizing their own and stakeholders.
footprint, and delivering solutions that help their
customers and the rest of society do the same. Uni- • Communicate: Publically share the target and
lever has extensively integrated sustainability content strategy.
into its corporate website to communicate externally
on progress towards the Unilever Sustainable Living • Implement and measure: Execute the strate-
Plan - encompassing the company’s own operation- gy with regular intervals for reporting progress
al carbon positive targets and its target to halve the to stakeholders.
greenhouse gas impact of its products across the
lifecycle by 2030. B Team companies also reached a common conclu-
sion that buy in from a large range of stakeholders is
Safaricom has integrated the UN Sustainable De- critical for achieving their targets. This allows their
velopment Goals, which includes its goal to get to emissions reduction strategies to be more closely
Net-Zero, into its core business strategy. integrated with their core business practices, rather
than run separately. Companies are more likely to
While the B Team companies have all created strate- successfully reduce emissions when their strategies
gies that fit their individual needs, many have featured complement and contribute to a company’s aims for
these common steps: growth and development.
Net-Zero by 2050 Progress Report January 2018
CHALLENGE 2: DOING MORE 6
WITH LESS - DRIVING EFFICIENCY
THROUGHOUT THE BUSINESS
Across the board, B Team companies working identifying where opportunities for greater efficien- 80 percent of heat loss which reduces the energy Evidence over the last years
towards net-zero must lower their emissions cies exist, then creating new business policies to required to heat and cool their premises. They esti-
by reducing the amount of resources needed capitalise on them. Allianz, for example, identified mate once they complete all retrofits at their China
has made it clear that growth in
to produce the same amount of products and energy consumption, paper use and business travel Headquarters, they will be saving 900,000 kWh of business value, and growth in
services, or the same revenue. According to the as their biggest sources of emissions, so targeted electricity. Salesforce, Unilever, Virgin and Kering emissions, have been decoupled
Shaping Energy Transitions report by The Energy these for efficiency improvements, resulting in a 25.3 have integrated green building practices into their in key countries. In fact, carbon
Transitions Commission, we need to make a 3 per- percent reduction in emissions per employee in 2016. design, construction, and operations. They build emissions are increasingly an
cent annual improvement in average global energy their workspaces to leading green building standards
productivity to 2050 in order to limit temperature rise In identifying efficiency opportunities B Team com- such as LEED, BREEAM, and Green Mark.
indicator of inefficiency and
to below 2°C. Improving energy efficiency also helps panies showcase how measuring and evaluation failure to innovate.
us reduce the scale of the challenge elsewhere, for across all operations is critical and smarter for busi- For industrial sector companies, energy efficiency is
Christiana Figueres,
example a company’s overall demand for renewables. ness. Safaricom is investing in the latest technology key to reducing emissions. Dow’s major sites rely on
Former Executive Secretary of the United Nations Framework
to ensure its measuring and monitoring of fuel and combined heat and power (CHP) plants, considered Convention on Climate Change (UNFCCC) 2010-2016.
Unilever recognised that the first power consumption on each of its sites is accurate. the most efficient way to produce steam and pow-
This allows them to identify small improvements, er, using 20-40 percent less fuel than conventional
step towards their ambitious carbon analyse them, and ensure they are replicated across power generation while also reducing GHG emis-
positive target was improving en- their sites. sions. They have also targeted manufacturing sites
ergy efficiency. They set ambitious for greater efficiency. Dow Corning Corporation set a
efficiency targets for water, waste, Tiffany & Co. reduced their own goal to reduce on-site energy intensity by 45 percent
energy, and CO2 emissions. Learn emissions 8 percent from 2014 to by 2021. At the end of 2016, energy intensity had
already been reduced by 41 percent, saving USD
how these targets helped increase 2016, while their business and its
$14 million in annual utility costs.
efficiency in Unilever’s case study. retail and manufacturing footprint
grew. Learn how they achieved this Natura have been carbon neutral
Increasing productivity is a journey. At the begin- reduction in Tiffany & Co.’s case since 2007, across all three scopes.
ning, many companies have experienced relatively
study. This was achieved through a com-
straightforward wins tackling operational inefficien-
cies which, in some cases, can garner millions of Several companies looked at their physical premises bination of reducing emissions and
dollars in saving. However, beyond this, companies for opportunities to reduce energy use. BROAD offsetting any emissions that cannot
identify that a deep understanding of your energy Group has implemented diverse strategies, such
(yet) be eliminated. Learn how this
footprint and ability to deploy intelligent solutions as wall and roof thermal insulation, door and win-
is required. The B Team companies have taken up dow energy-saving technologies, and using their process affected each aspect of their
the energy efficiency challenge in their operations, fresh air heat recovery machines—which can save business in Natura’s case study.
Net-Zero by 2050 Progress Report January 2018
CHALLENGE 3: 7
CLEANING UP OUR ENERGY SUPPLY
2016 represented a record rise in renewable as it provides a new supply of renewable energy and energy, make the goal of operating on 100 percent less and more efficient forms of energy to reduce
energy capacity installed, up 10 percent on accelerates the shift in the overall power mix on the renewable sources unrealistic for Dow. However, their emissions in the here and now. Examples of
2015, and also delivered yet further decline in grid. Safaricom has a target for 15 percent of their Dow can and does make efforts to reduce the carbon these initiatives can be found in the individual com-
the price. Solar PV costs alone have reduced 85 sites to run on solar and wind power solutions in intensity of the fuel it uses, and they’ve met their goal pany case studies, demonstrating a trend towards
percent over 7 years, outcompeting fossil fuels financial year 2017/2018. Allianz invests directly to of using 400 MW of clean power by 2025, nine years companies marrying technological innovations and
in many regions of the world. Yet it remains the help expand the market for renewables, and equal- early, with current capacity for low carbon or renew- better monitoring to reduce energy consumption.
case that cleaning up an entire companies en- ly divested from coal-based business models (see able sources now nearly 695 MW. To continue the
ergy supply continues to be an immense chal- example on page 16). momentum, they have increased their goal to 750 B Team companies have confidence that technologi-
lenge, especially for heavy-emitting sectors MW by 2025. The continued pursuit of targets and cal advances in the way we fuel industrial processes,
such as power, cement, chemicals and steel. Where companies cannot purchase power directly rising ambitions is indicative of Dow’s commitment as well as in the way we store energy, will lead to the
from a specific renewable source, many use renew- to the net-zero transition. breakthrough which allows the economy to transi-
For B Team companies, the geography and type of able energy credits. To stimulate renewable growth tion to 100 percent renewable energy, and put their
energy they need to fuel their business dictates how in a particular market they may invest in locations Most other B Team companies too still use a pro- weight into investment and advocacy opportunities
they respond to this challenge. Many B Team com- where they operate. In 2017, Tiffany & Co. purchased portion of fossil fuels within their energy mix, and that promote this eventuality (detailed in Challenges
panies purchase electricity from renewable sources regional renewable energy credits for approximately although they seek to transition to 100 percent re- 7 and 9).
for their own operations. Natura purchases 100 per- 85 percent of its global electricity use. For 100 per- newables as quickly as possible, also invest in using
cent of the electricity they consume from renewable cent of its US electricity, Tiffany & Co. purchased solar
energy production plants. Virgin Money succeeded credits from Utah, where much of the gold and silver
in securing certified 100 percent renewable energy Tiffany & Co. sources is mined.
sources for all electricity contracts under their direct
control. Unilever, Salesforce and BROAD Group The reliability and affordability of renewable energy
have joined RE100, a global collaborative initiative sources continues to be a challenge for many compa-
of influential businesses committed to using 100 nies. For example, the power needs of the chemical
percent renewable electricity. industry, which needs efficiently produced thermal
BROAD Group has committed
to using 100 percent renewable In late 2015, Salesforce signed two
energy by 2045. Learn about how virtual power purchase agreements
they’re innovating to reach this goal (VPPAs) in West Virginia and Texas.
in BROAD Group’s case study. Learn how these investments, along
with other innovations, are helping
Supporting new-build projects, either by building
on-site renewables, signing power purchasing Salesforce source 100 percent
agreements with new off-site projects, or providing renewable energy in their case
investment into renewables, is particularly desirable, study.
Net-Zero by 2050 Progress Report January 2018
CHALLENGE 4: 8
REDUCING EMISSIONS
IN SUPPLY CHAINS
B Team companies know that to achieve a to reduce energy use, and whether they have incor- Kering uses is €62 per tonnes of CO2 equivalent. their ambition to use 100 percent renewable energy
net-zero economy, companies must go be- porated climate change explicitly in to their strategy. This price is applicable globally and there is a mech- by 2030.
yond reducing emissions in their own oper- anism for revision every three years, following the
ations and seek innovative ways to influence The Kering ‘Clean by Design’ pro- Environmental Profit & Loss methodology. Unilever Reducing emissions in supply chains was identified
the indirect emissions generated by suppliers gramme, concluding in April 2017, introduced an explicit internal price of carbon of €30 by a majority of B Team companies as continuing
as well. These emissions can be difficult to per tonne in July 2016. They use it, first, to evaluate to be one of the most challenging areas to tackle
quantify, and even more challenging to reduce.
targeted 24 of the Group’s textile the business case for new capital investments of in the future, as well as the need to influence their
B Team companies reported that they were mill suppliers, covering 40 percent significant size and secondly, to create an internal customers. This is why companies are starting to
taking three clear steps towards meeting this of the Group’s ready-to-wear sup- annual charge on emissions of CO2 from their man- work together, whether through associations like
challenge—signalling their company’s intent ply chain. Learn how this initiative ufacturing network. This levy has created an internal the Renewable Energy Buyers Alliance (REBA), or ex-
to decarbonise, assessing the performance of ‘Clean-Energy’ fund for 2017, which is being used changing best practice on procurement procedures,
their suppliers, and working with their suppli-
helped Kering improve resource ef- to invest in installing renewable energy sources on to create the systemic changes that are needed to
ers to reduce emissions. ficiency and emissions reduction in their manufacturing sites. This greatly accelerates reduce emissions in their supply chain.
their case study.
Commonly, companies are using their public targets,
such as RE100 or Net-Zero by 2050, to signal their By using such criteria B Team companies reduce
intentions to suppliers. By communicating openly emissions in their supply chains, incentivise other
with their suppliers about achieving reductions in businesses to prioritise climate change and indirectly
emissions in their own operations, Unilever can begin impact others in the industry using the same suppliers.
to support and convince them of the feasibility of, Additionally, companies have introduced a price on
and business case for, taking similar action. Unilever
has published a Responsible Sourcing Policy which Virgin Atlantic influenced its own
sets mandatory requirements their suppliers need airline catering suppliers to deliver
to meet. BROAD Group actively supports suppliers
reducing their GHG emissions, by highlighting the
more sustainable meals, and as a
economic benefits of doing so. Natura has performed result influenced the entire indus-
assessments on their supply chain which allow them try. Read more about this in Virgin
to identify areas most in need of improvement, build Group’s case study.
long-term supplier partnerships and explore new
business models. Salesforce has a policy for selection carbon to attribute a monetary value to the conse-
of new data centre sites which considers their level quences of the company’s environmental impacts
of emissions, whether the site has an active program throughout its supply chain. The price of carbon that
Net-Zero by 2050 Progress Report January 2018
CHALLENGE 5: BUILDING A 9
NET-ZERO WORLD THROUGH
OUR PRODUCTS
Companies have the opportunity to reduce es and working to embed circular thinking into their credits throughout their data center supply chain. tariffs for electric vehicles and insurance for renewable
their indirect emissions further by considering innovation process. The circular economy model This also includes indirect emissions such as those technologies. Allianz also advises insurance custom-
the emissions from the use and disposal of keeps materials in a closed-loop system, as opposed generated by manufacturing servers, data center ers on how they can minimize damage from climate
their products. Doing so requires innovation to the traditional linear model of manufacture, use, operations and customers using Salesforce on their impacts, and encourages those who have suffered
and investment, but, as many of our compa- dispose. Circular models will drastically reduce the personal devices. losses to choose lowest-carbon replacements.
nies have found, can also lead to new business impact of global consumption, including waste and
opportunities and competitive advantage. emissions. In 2016, Unilever conducted internal work- Allianz now designs over 150 sustainable products to Safaricom have partnered with M
This competitive advantage is only likely to shops, scoped projects and provided training for incentivise and support lower GHG emissions profiles -KOPA to connect over 500,000
increase, as companies reducing their own for their customers. Some of these products have
Dow are delivering breakthrough homes to affordable solar power.
Scope 3 emissions will seek to buy low-carbon the potential to encourage long-term, societal shifts
products, creating a virtuous circle. chemistry innovations that helped towards lower carbon business models and lifestyles, Learn more about how this partner-
reduce CO2 emissions by 301 million as well as being worth more than 1.1 billion euros in ship has helped reduce emissions in
The responses from B Team companies on progress in metric tons in 2016. Learn more revenue in 2016. For example, they include special Safaricom’s case study.
this area suggested that the development of net-zero
products remains challenging. It requires significant
about these innovative products in
technical investment and ability to overcome societal Dow’s case study.
inertia and perceptions that low-carbon products may staff at all levels on the circular economy, to support
be untested or more expensive than their high-carbon the adoption of circular thinking in their business.
equivalents. Natura and Salesforce have managed to translate
their low-carbon efforts into the marketing of their
Companies that produce manufactured products, products to customers, responding to the reported
such as Dow and BROAD Group, have invested in post-Paris Agreement trend that sees a tipping point
technical solutions to build products that help other emerging for customer awareness and preference
businesses reduce GHG emissions. BROAD Group for low carbon products .
innovated to create low-emission, low-energy air
conditioning technology. Used in their own build- Natura focuses on packing products in 100 percent
ings and sold to customers around the world, these post-consumer recycled materials or 100 percent
air conditioners reduce global CO2 emissions by green polyethylene, and by offering customer refills
300,000 metric tons per year, compared to standard has eliminated potential emissions from extracting
air conditioning installs. virgin packaging materials. Salesforce purposely
advertises to customers that it delivers a carbon-neu-
Unilever have been piloting circular economy practis- tral cloud by offsetting emissions with high-quality
Net-Zero by 2050 Progress Report January 2018
CHALLENGE 6: EMPOWERING 10
BOARDS OF DIRECTORS TO
EFFECTIVELY GOVERN A COMPANY’S
TRANSITION TO NET-ZERO
Climate change poses material risks and op- on their climate related risks and its governance of
portunities to every business, and therefore them. These principles for better disclosure were
requires full board-level oversight. Investors endorsed by Allianz, Dow, Kering, Natura, Safaricom, How do B Team company boards
are increasingly demanding this, evidenced by De- Salesforce, The Virgin Group and Unilever in a letter,
cember 2017’s announcement by 225+ investors which ultimately attracted signatures of over one
currently provide oversight on climate?
with more than USD $26.3 trillion in assets, who hundred other CEOs. Allianz, Dow and Unilever have
pledged to engage with the world’s largest corporate committed to implementing the recommendations
greenhouse gas emitters to improve governance of the TCFD.
on climate change, curb emissions and strengthen
• Allianz has an executive director level at the board level which, amongst other
climate-related financial disclosures. Directors must While a truly concerted effort to ensure boards are
Group ESG Board which is responsible things, is responsible for oversight of
make efforts to successfully integrate their under- climate competent and there is full board oversight
standing of how climate change impacts their busi- on climate (rather than being relegated to one sub-
for integrating ESG into all business the progress towards the net-zero
ness, and how it can effectively be managed, into committee) is still at a nascent stage, B Team com- lines and core processes dealing with emissions target and climate change
their governance systems and board committees. panies are integrating climate into their governance insurance and investment decisions. adaptation.
It is important to assess and educate sitting board structures in various ways. The ESG Board is comprised of three
members today, rather than await board turnover, Members of the Executive Board, who • Tiffany & Co. has a CSR Committee at
which has historically been slow. are responsible for Asset Management, the board level which meets at least
Investments and Global Insurance Lines twice a year with the responsibility of
Disclosure of the governance structures, strategies respectively. reviewing, and recommending goals,
and risk management practices as it pertains to cli- initiatives, and practices for social
mate-related risks as a standard best practice is also • At Dow, the Executive Sustainability responsibility to the full Board.
crucial for ensuring the health of each company as Team is appointed by the Dow Board
well as the overall capital market system. Transparent, of Directors to identify material • In 2016, Virgin Management established
coherent reporting will lead investors and sharehold- a Net-Zero Taskforce that meets every
sustainability risks and opportunities,
ers to support those boards and companies who six weeks, and updated their Group
including climate-related issues, and
are driving climate action, and ultimately should governance to require quarterly reports
reports to the board every quarter.
accelerate market forces to shift capital to low-car-
to the board on progress towards the
bon solutions. In June 2017, the Task Force on Cli-
• Kering has a Sustainability Committee net-zero target, across the Group.
mate-Related Financial Disclosure (TCFD) released its
guidance to establish consistent voluntary disclosures
Net-Zero by 2050 Progress Report January 2018CHALLENGE 7: MAKING THE 11
RIGHT INVESTMENTS FOR THE
NET-ZERO ECONOMY
One of the paramount challenges in transi- Virgin Group also invests in renewables. Recent suc-
tioning the global economy to net-zero emis- cesses include the purchase of the BMR Wind Farm
sions remains that trillions worth of public and from American Capital for $43m in August 2016 Investing in offsets whilst still
private money is still invested in high-carbon and their investment in M-KOPA, collaborating with
industries, outpacing investment in the indus- Safaricom to bring affordable solar power to over
reducing overall footprint
tries needed to sustain a net-zero economy. 500,000 homes in East Africa.
Companies play a key role in ‘shifting the trillions’.
They both produce and invest in innovation, facilitat-
Many B Team companies are investing • Salesforce has supported a ‘Cool
ing leaps in technologies that can benefit the world.
in carbon offsets to reduce their carbon Effect’ project which replaces open,
New technology brought to scale will help us reach
a net-zero emissions economy on a faster timeline.
footprint, whilst concentrating on wood-burning cook stoves with a
And time is of the essence if we want to prevent reducing their overall emissions. Offsets more efficient alternative in Honduras,
locking in irreversible climate change. Allianz’s vote are a stepping stone on the journey to full decreasing emissions and deforestation
of confidence in the renewables sector helps to decarbonisation of both companies and while also improving human health
attract other investors. However, there currently are the economy. through better indoor air quality.
not enough attractive renewable energy projects
coming on to the market, and those in developing • Kering’s carbon offsetting contributes • Tiffany & Co. is the first major corporate
markets sometimes present unstable and high-risk to the protection of more than backer of a landscape-scale conservation
investment opportunities. 750,000 hectares of biodiversity-rich project in Kenya through its carbon
ecosystems, serving more than 400,000 offset purchases. The project protects
Allianz has cast a major vote of people. a diverse ecosystem, endangered
confidence in renewable technol- species and a critical watershed, while
ogy with investments totalling 4.6 • Natura’s offsetting purchases have creating new sustainable economic
contributed to the restoration of 2,155 opportunities for local communities.
billion Euro. Learn how these in-
hectares of rainforest, and conservation
vestments are both turning a profit of a further 12,000 hectares.
for Allianz and helping reach its
net-zero goal.
Net-Zero by 2050 Progress Report January 2018CHALLENGE 8: 12
ENSURING WE MAKE
A JUST TRANSITION
Although B Team companies are confident that What are B Team companies
a transition to a net-zero economy is possible,
the outcome of the transition for those cur-
doing to ensure they make
rently excluded from prosperity in the current a just transition to net-zero?
economy is far from certain.
• BROAD Group is reducing its emissions
This transition, coupled with parallel economic trends whilst also focusing on increasing job
opportunities and improving community
of automation and other disruptive technologies,
infrastructure.
makes it essential that companies plan to create de-
cent, low-emissions jobs, uphold rights, protect • Dow’s network of Community Advisory
vulnerable workers and communities, and leave no Panels (CAPs) is in more than 20 commu-
one behind. Cooperation between employers and nities around the world. In 2017, they
workers on planning and implementing the transition asked these panels for feedback on Dow’s
will be crucial to its overall success. strategy and progress towards their 2025
sustainability goals.
• Natura invites workers to trainings and
meetings to discuss the ongoing net-zero
strategy, and make decisions that could
impact the wider workforce and commu-
nity.
• Safaricom carries out training on energy
conservation and clean energy with staff
at all levels of the organisation.
• Tiffany & Co. supports the creation of rigor-
ous responsible mining standards, which
consider pressing issues facing the sector,
including protecting human rights and
providing safe and respectful workplaces
whilst minimizing environmental harm.
Net-Zero by 2050 Progress Report January 2018CHALLENGE 9: ENCOURAGING 13
TRANSFORMATIVE POLICY
The majority of businesses today cannot reach In 2016, Salesforce, Tiffany & Co., Virgin and Unile- to support a letter to the Brazilian President opposing What do you expect the
net-zero without overcoming political and sys- ver, took a public stand and reiterated their pledge a piece of legislation that would accelerate deforest-
temic challenges that define the status quo of to global climate action by signing the “Business ation. A Brazilian Federal judge has since issued a
greatest challenge in reducing
today’s economy. Backs Low-Carbon USA” open letter with other U.S. ruling temporarily putting a halt to the mining plans, emissions to be in the future?
businesses encouraging the U.S. government and which many confirm is at least partly due to the in-
The global economy can be described as a large world leaders to maintain commitments made in ternational outcry. Reducing
tanker ship, heading in one direction (rising emis- the historic Paris Agreement. B Team businesses Continuing to consumer
sions), that must be slowed, and turned in the op- led private sector representation at the People’s In November 2017 Unilever, Kering, Natura, Sales- reduce scope 3 emissions
posite direction, in order to reduce emissions to Climate March, demonstrating the support of busi- force, and Virgin supported the launch of ‘Powering emissions
net-zero. ‘Turning the ship’ requires concerted effort ness leaders for the US climate movement. In May Past Coal’, an alliance of more than 25 countries, Unilever
and willingness not just from businesses, but from 2017, as it became clear the U.S. government was states and regions, led by the United Kingdom and Kering
other key players in the global economy including considering withdrawing from the Paris Agreement, Canada and including Fiji, Mexico, the Marshall Is-
governments, sub-national governments, and the B Team companies mobilised again. They performed lands, France, Costa Rica, New Zealand, Quebec,
Reducing Setting a science
financial sector. All these actors both influence and high-level influencing work, including direct outreach Oregon and Alberta, and their declaration to accel-
emissions based target
constrain each other, and thus to ‘turn the ship’ the to President Trump’s former CEO Council, peer-to- erating growth through a rapid transition from coal across a globally
speed deemed necessary to reach net-zero by 2050, peer outreach to targeted CEOs and outreach to power to clean power. Coal phase-out is integral to distributed
businesses must take on the challenge to both com- other world leaders at the G20 and G7. Led by CEO both company and country long-term strategies to network of Safaricom
smaller facilities
municate to governments and investors it is willing of The Dow Chemical Company, Andrew Liveris, B Net-Zero by 2050.
and able to transition, and influence policy makers Team businesses coordinated a letter supporting
Tiffany & Co.
to create law and policy which incentivises action climate action, signed by 30 CEOs of prominent Reducing the
emissions of our
and deters inaction. businesses – including JP Morgan, Goldman Sachs,
products
Disney and Coca Cola—which was featured in the
In 2015, B Team Leaders demonstrated the effec- Wall Street Journal and read more than 10,000 times
Natura
tiveness of business influence on policy-makers online. Tiffany & Co. placed an ad in The New York Reliability and
affordability
when they went to COP21 in Paris to show busi- Times and amplified the message on social media
of alternative
ness support for a long-term goal embedded in the calling for the U.S. to remain in the agreement. The energy sources Challenge of
Paris Agreement. Christiana Figueres credited the B Team companies also supported and helped drive getting cheap
willingness of business to set long-term ambitious the ‘We Are Still In’ campaign, bringing together Dow renewable
goals themselves, such as net-zero by 2050, as con- more than 1,400 businesses, tertiary institutes, cities energy in China
tributing to the passing of the Paris Agreement. Our and states in the US committed to upholding the
companies working towards net-zero are using their Paris Agreement. BROAD Group
The difficulty of setting a
voices and influence wherever they are to embolden
Science Based Target for
policy-makers and bring more businesses along on Another notable example of teamwork includes B the financial sector
the net-zero transition. Team Leaders’ mobilisation in response to a request
from Natura Co-Founder Guilherme Leal in June 2017,
Allianz
Net-Zero by 2050 Progress Report January 2018CONCLUSIONS 14
This report has guided us through the chal- customer preferences. To tackle these challenges, tice on technical improvements, combining their
lenges and steps companies are taking on companies will need to engage with others to ad- voices to influence policy makers, working strate-
This report marks another
their net-zero journeys. In this process, we vance their climate agenda. Globalisation of com- gically within global value chain systems to iden- important milestone in our
have found each challenge falls broadly into panies supply chains and reliance on outsourcing tify common suppliers and grouping together to battle against climate change.
one of the following categories: operational, makes this particularly difficult, as companies must demonstrate the business case for a just transition
to net-zero emissions.
I’m happy to see so many
technical, systemic, societal and political. influence a highly-distributed network of small
suppliers over a large geographic range. There companies taking a positive
Many operational challenges have been de- also still remain societal challenges to addressing Yet there is reason to be positive. One of the most and proactive approach to
scribed in this report. From the governance exam- climate change. We can no longer tackle climate promising conclusions is the strong trend towards safeguard our planet for
ples on how core skills and competencies are be- while ignoring the impacts on people, both of cli- companies decoupling growth from rise of emis-
ing improved to properly evaluate risk and reward, mate risk and of our decisions on how we reduce sions. For example, Unilever’s GHG impact of all generations to come. We need
to the internal mechanisms companies are intro- carbon. Climate action should not negatively affect products rose by 8 percent since 2010. However, more businesses to use the
ducing, such as internal carbon prices, large strides people’s lives; instead it should enhance the lives of sales grew 30 percent over the same period. They examples here as inspiration to
are being made in this challenge area. Operation- those who are most excluded by today’s economy. are decoupling their value chain GHG impacts
al challenges are not easy to overcome, but with from business growth.
change their own businesses
courage and willingness to test new processes, Finally, there are political challenges. Political for good.
companies can make substantial progress reducing challenges still impact each piece of the net-zero
Sir Richard Branson,
their emissions. They can then demonstrate these journey, and can either restrict or accelerate re- Founder, Virgin Group
best practices to others in the business communi- newable energy rollout, patterns of investment and
ty to contribute to building a net-zero economy, the incentives for companies to take risks on new
through vehicles like this report. business models. The lack of an enabling policy
environment, and the existence of actors who wish
There are of course technical challenges to reach- to slow climate progress, is why business advocacy
ing net-zero, with some industries having no ful- for the net-zero economy continues to be of para-
ly-defined technology to help them completely mount importance. Business actors continue to be
reduce their emissions. For example, the thermal influential voices who, by standing alongside civil
energy that Dow needs for its industrial activities society and other non-state actors, can shift both
cannot be produced effectively with renewable en- international agreements and national policy.
ergy. Some small technical challenges can be over-
come within businesses, but mainly businesses rely When analysing these challenge types, it becomes
on working together, or partnering with businesses evident that no one company is going to pull off
in other industries to create breakthroughs. a just transition to net-zero without collaboration.
Technical, political, systemic and societal chal-
There are also systemic challenges to tackling lenges demand a much broader set of actors to
climate change in the business world that are not collaborate towards solutions. Even the companies
inside any one company’s control—even the large represented within The B Team cannot tackle these
multinational companies represented in this report. problems on their own. But they can collaborate
These can include supply chains, communities and effectively to help each other by sharing best prac-
Net-Zero by 2050 Progress Report January 2018APPENDIX: COMPANY CASE STUDIES
CASE STUDY: ALLIANZ
16
Casting a major vote of confidence in the net-zero economy with its investments
Highlights Company Initiative Spotlight
Responsible investing: Allianz screen its equity sions as well as energy consumption per employee About Allianz:
• By the end of 2016, Allianz had reduced
CO2 emissions by 25.3 percent per em- and fixed income investments using 37 environmen- by 30 percent by 2020, against a 2010 baseline. By Allianz are one of the world’s largest insurers and
tal, social and corporate governance (ESG) criteria the end of 2016, they had already achieved a 25.3 asset managers, with operations in more than
ployee since 2010.
including carbon emissions, and energy efficiency. percent reduction per employee mainly through 70 countries. Allianz’s own emissions footprint is
• Allianz has cast a major vote of confi- relatively small, however, their indirect impacts and
This guides the development and implementation energy efficiency initiatives, reducing business travel,
dence in renewables – with investments opportunity for influence is considerably larger.
of sustainable investment strategies, ensuring that or using low-carbon options, and increasing use of
totaling 4.6 billion euro by the end of While reducing their operational emissions where
capital flows to businesses prioritizing ESG consid- renewable energy in their energy mix. possible they have sought to innovate within their
2016.
erations and pushing companies to go further to business model to tackle scope three emissions
• In 2016, 45.1 percent of Allianz’s own meet these standards Net-Zero Leadership and provide leadership to shift capital markets to
energy came from renewable sources. support a net-zero transformation.
Responsible insurer: Allianz advise customers Developing regulatory frameworks that sup-
• Allianz has sent a strong signal to the on how to reduce risks and minimize damage from port the net-zero economy: Allianz understands Equity investments: Through its in-house invest-
market by divesting 225 million Euro in
climate change, while encouraging lower emissions effective regulatory frameworks are crucial to support ment platform for alternative equity investments, Alli-
equity from coal-based business models
replacements for those who have suffered losses. low-carbon investing and is an active part of initi- anz Capital Partners (ACP), Allianz has grown its equity
and placed 3.9 billion Euro fixed-in-
come assets in run-off in 2015. They offer over 150 Sustainable Solutions for their atives like the Finance Initiative of the UN Environ- investment in renewable energy from 2.4 billion euro
customers—from special tariffs on electric cars to en- mental Programme (UNEP FI), the Munich Climate in 2015 to 3.5 billion euro in 2016. This includes 71
• Since 2012 Allianz has been net-zero for vironmentally-themed funds. In 2016 these products Insurance Initiative (MCII), the Geneva Association wind farms and seven solar parks in France, Germany,
its operational emissions, by investing represented 1.1 billion Euro in revenue. and ClimateWise. These provide opportunities for Italy, Sweden, Austria, and Finland. In the U.S., ACP’s
directly in emissions reduction projects Allianz to convey messages to decision makers and wind and solar portfolio generates sufficient renew-
in developing countries. Reducing their emissions from corporate oper- develop innovative solutions to mobilise finance for able energy to supply over 1.6 billion households.
ations: Allianz has committed to reduce CO2 emis- the transition to a net-zero world and for adapting Allianz also offers renewable infrastructure investment
to climate change. funds to third party clients through Allianz Global
Renewable Energy Investments Investors, with a total of over 1.6 billion euro in 2016.
Adopting new recommendations on financial
2016 2015 2014
disclosure: Allianz publically signaled that it will What I worry about is
adopt the recommendations of the Task Force on climate change, which poses
Renewable energy Climate-related Financial Disclosures in its reporting
portfolio: Total € bn 4.6 2.8 1.9 for the fiscal year 2017.
the biggest threat. This is
invested
one reason why we no longer
Private Equity (€ bn) 3.5 2.4 1.7
Debt financing for carbon reduction projects: finance coal-based business
Allianz’s Reducing Emissions from Deforestation and
Degradation (REDD+) investments in Kenya, the Dem-
models and will double
Infrastructure Debt
(€ bn) 1.1 0.4 0.2 ocratic Republic of the Congo and Indonesia not our equity investments in
Renewable energy
only generate CO2 certificates, but are helping to renewable energy.
portfolio: Total number protect biodiversity and support local communities. Oliver Bäte, CEO
87 72 59
wind and solar
Net-Zero by 2050 Progress Report January 2018CASE STUDY: BROAD GROUP
17
Reimagining buildings and construction for a net-zero world
About Broad Group: Company Initiative Spotlight
BROAD Group are a central air conditioning
manufacturer, energy service provider, clean air Energy conservation at BROAD Town: Cutting emissions in product testing: at BROAD town, but the Chinese government has
technology innovator and sustainable building BROAD Town is a major corporate campus in China, The main source of emissions in BROAD Town is from invested in its development and expansion. BROAD
leader based in China. They are reducing their providing community facilities for BROAD employ- energy used to test BROAD non-electric air condi- Group plan to share the technology with their air-con-
own footprint, while innovating new technolo- ees and their families, as well as housing BROAD’s tioning products. BROAD has innovated with the ditioning users, and all districts adopting natural gas
gies and process to accelerate the net-zero transi-
headquarters, factories and sustainable building processes and technologies used to test its products, heating. This innovation alone could save more than
tion across the construction and building sector.
innovation projects, such as the mini sky city. Most and has reduced the frequency of the tests which has 10 billion m³ of natural gas annually in China.
of the buildings in Broad Town have been retrofitted saved between 850 to 1,300 tonnes CO2 per year.
Highlights: for energy saving, and once completed it is estimated Reducing supply chain emissions:
this will save 900,000kwh of energy. Energy savings Innovating to provide low-emission hot water: BROAD Air Conditioning Co. Ltd., a subsidiary of
• BROAD Group has reduced GHG emis- have been achieved through wall and roof thermal in- There is a huge demand for hot water in BROAD BROAD Group reduces carbon emission, environ-
sions 10.2 percent since 2014. In 2016, sulation (which can save 80 percent of heat loss from a Town. The standard tap water heating process is mental pollution and energy consumption by guid-
BROAD Group’s emissions reduction in- building), the use of door and window energy-saving fueled by natural gas. BROAD have developed a new ing suppliers and users to adopt energy reduction
itiatives reduced CO2 emissions by 1,100 technologies, and by building exterior solar shading; process using the cooling water and exhaust heat measures. The company evaluates suppliers and
- 1,450 tons. which, in summer, can reduce air-conditioning use from testing equipment, to heat water for daily use. chooses those who can provide low-carbon materials
by 70 percent. This process cuts CO2 emissions by 80 tonnes per and components, and guides them to reduce GHG
• Working towards their commitment of year. The technique is still in the experimental stage emissions further by stimulating economic benefits.
using 100 percent renewable energy by
2045, BROAD Group got 30 percent of
their energy from renewable sources in
2016, up from using no renewable energy
in 2014. They invested in a 170,000 panel
Net-Zero Leadership
solar roof - the largest on an urban build-
ing in China—to reduce their reliance on
non-renewable energy. Incorporating a price on carbon: BROAD Group Prioritising a just transition to the net-zero
has incorporated a carbon price into the virtual op- economy: BROAD’s net-zero by 2050 strategy is
Sustainable development
• They operate a virtual carbon price be-
tween subsidies of BROAD Group, which
eration of their business planning. not simply about reducing energy consumption and is critical in an era where
is gradually increasing the price of carbon
emissions. They are equally focused on growing social transformation and
Low-carbon products at the heart of their busi- opportunities for employment and ensuring the
to 100USD/ton of carbon.
ness: BROAD have designed non-electric air condi- well-being of communities and workers. BROAD’s
accelerating urbanization is
• In 2016, BROAD Group invested 4 billion tioning units with combustion engines that are more strategy prioritises opportunities to source clean occurring in many countries.
Yuan to research and develop the sustain- energy efficient and emit lower levels of nitrogen oxides energy and improve energy efficiency that are also Zhang Yue, CEO
able vertical construction and the sky city than standard air conditioners. With tens of thousands able to increase job opportunities and improve com-
project, which demonstrated that low of BROAD non-electric air conditioning units in use all munity infrastructure.
emission high-rise buildings can also be around the world, this represents a saving of 300,000
built efficiently and at low cost. metric tonnes of CO2 emissions every year.
Net-Zero by 2050 Progress Report January 2018CASE STUDY: THE DOW CHEMICAL COMPANY (DOW)
18
Proving energy intensive companies can take major steps on the journey to Net-Zero
Company Initiative Spotlight Net-Zero Leadership
About DOW:
A major focus on energy efficiency: Dow op- Supporting clean-energy through science and Towards a Circular Economy: Dow has been driv-
The Dow Chemical Company is a U.S.-based erates an energy intensive company, in an energy technology: Dow are committed to producing ing 20 projects in their 2025 goal to ‘Advance a Cir-
global material sciences company, manufactur-
intensive industry. Reducing the energy required products that help others reduce GHG emissions. cular Economy’. This includes the ‘Hefty Energy Bag
ing leading chemical, plastics and agricultural
products. Operating in a highly energy intensive for production is both a major challenge and an For example, DOWTHERM™, is a heat transfer fluid Project’, designed to convert previously non-recycled
industry, Dow are setting their own ambitious opportunity. By ingraining energy efficiency into the used in 35 large solar power plants, with a total plastics into energy. In the Omaha, Nebraska pilot
targets, and are active supporters of smart pol- continuous optimization of their everyday processes, capacity of more than 700 megawatts. These plants this project has resulted in an estimated 36 tonnes
icies which will transform the economy. Dow reduced energy intensity and save more than will provide enough electrical generation capacity of plastic being diverted from landfills.
6,100 trillion BTUs from 1990 - 2015. Dow’s ma- to meet the needs of more than 1 million homes with
jor sites rely on combined heat and power plants. clean-energy, saving close to 4 million tonnes of CO2 Our 2025 Sustainability
These plants are considered the most efficient way emissions each year.
Highlights: to produce steam and power, using 20-40 percent Goals will help redefine
less fuel than conventional power generation while Pioneering an internal price on carbon: Dow the role of business at its
• By ingraining energy efficiency into the also reducing GHGs. Dow Corning Corporation is one of the companies leading on incorporating intersection with society. They
continuous optimization of its everyday set a goal to reduce energy intensity by 45 percent a carbon price into their business planning and risk
by 2021, versus a baseline of the average of 1998 management strategies. The price of carbon is in-
will be our guide as we work
processes, Dow was able to reduce its
energy intensity by 40 percent between - 2001. At the end of 2016, energy intensity for its cluded in the Company’s internal calculations used to improve the well-being of
1990 and 2015. sites had been reduced by 41 percent, through the for prioritizing capital projects. humanity with solutions that
execution of a multimillion-dollar energy-efficiency
• In 2016, Dow’s energy intensity de- are good for business and
project portfolio, with total savings of $14 million Leading a just transition to the net-zero econ-
creased from a 2015 level of 4,540 Brit- USD in annual utility costs. omy: A key component of ensuring a just transition good for the world.
ish Thermal Units (BTUs) per pound of to the net-zero economy is consultation with workers
production to 4,490 BTUs. Andrew Liveris, Chairman and CEO
Increasing renewable purchasing: The relia- and the community. Dow are in constant communi-
• In 2016, more than 301 million tonnes bility and affordability of alternative energy sources cations with stakeholder audiences regarding their
of CO2 were not released into the at- is the greatest challenge for Dow. Current forms of sustainability strategy. They have Community Adviso-
mosphere, directly attributable to use renewable energy only produce electrical energy and ry Panels (CAPs) in more than 20 communities around
of Dow’s insulation products. cannot efficiently produce thermal energy needed the world where they have a major manufacturing
in the chemical industry. However, approximately presence. In 2017, Dow asked these CAPs for their
• Dow has set the 2025 Goal to grow glob- 9 percent of their purchased electricity is from re- feedback on their strategy and progress on the 2025
ally over the next 10 years while limiting newable sources, which, due to the scale of their Sustainability Goals, which includes interim targets
their absolute GHG emissions to not ex- operations makes Dow the third biggest corporate on their journey to net-zero GHG emissions by 2050.
ceed their 2006 baseline. user of clean energy in the U.S. Dow met their goal In 2013, employees were asked to give input on
to use 400 megawatts of clean power by 2025 nine what became their 2025 Sustainability Goals, and
• Dow is one of the pioneering companies
years early, in 2016. Current capacity is now nearly employees continue to provide feedback with an
leading on incorporating a carbon price
695 megawatts (MW) from renewable sources. To annual global employee opinion and action survey.
into their business planning and risk man-
continue the momentum, they have increased their Dow are also in regular reviews with Works Councils
agement strategies.
goal to use 750 MW by 2025. and unions regarding their strategy development.
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