To stop global warming, we all need to understand the end goal we’re aiming towards. Only then can we grasp the speed and scale of action required to achieve Net Zero and start plotting the steps needed to get us there.

A state of Net Zero emissions may sound simple – not releasing more greenhouse gases than we can remove from the atmosphere. However, there remain misunderstandings about Net Zero in relation to other targets, such as carbon neutrality, as well as whether offsetting can play a role in reaching Net Zero, and how fast we need to act.

Net Zero is more ambitious than carbon neutrality. PAS 2060, the international standard for carbon neutrality, requires organisations to commit to ongoing reductions in emissions as part of a carbon neutral commitment. However, it does not specify how much organisations need to reduce by. Carbon neutrality can rely more heavily on offsets. Net Zero requires organisations to reduce emissions at a rate consistent with 1.5°C of warming, before neutralising any remaining emissions through offsets that facilitate permanent removal of CO2.

Due to the important alignment with 1.5°C, Net Zero requires much faster action with near-term targets to ensure the organisation is on track to meet the ultimate goal. Meeting Net Zero requires organisations to ask:

• Which emissions are my organisation responsible for?
• How much do I need to reduce? 
• How quickly do I need to act?

Organisations should be carefully monitoring their incremental progress towards Net Zero, rather than delaying action. Understanding what we stand to gain from Net Zero, as well as what we will lose through inaction, should ensure that Net Zero action remains a priority, even when we face other global crises.

Once we understand what the prize is, we need to establish the rules to play by.

We will only reach Net Zero if the targets we set ourselves are robust and credible, and if those targets are followed up with sufficient action. Over 90% of global GDP is now covered by Net Zero targets however, current plans to achieve these targets put us on track for around 2.7°C of warming – well above the 1.5°C required for Net Zero. 

The answer lies in establishing standards that outline exactly what targets and action plans should include, methods to monitor and disclose progress, and ways to hold us accountable for staying on track. This transparency is key to avoiding greenwashing and rewarding real climate leaders.

All sectors of the economy need financial support to undertake and catalyse the transition to Net Zero. But according to the IPCC, global progress towards aligning financial flows with Net Zero is still slow, and investment is not distributed evenly across sectors and regions.¹

We must significantly increase the speed at which funds are channelled into projects, assets and companies that are aligned to an environmentally sustainable and just economy. This will require a clear definition of what counts as sustainable, so that financial decision-makers can firmly align their portfolios with Net Zero and assess the true impact of their investments.

Many reports, including by the Network of Central Banks and Supervisors for Greening the Financial System, have highlighted the intrinsic correlation between climate change and global economic instability. The structure of financial systems must change to ensure that climate and nature-related risks and opportunities are taken into account when assessing the economic and financial impact of an activity. This will expose the hidden and future costs of high-emitting activities, therefore increasing the financial incentive to reduce emissions.

The demand for innovative solutions to fight climate change and alleviate the effects of global warming is continuously growing. Early investors in these technologies have the opportunity to get ahead of the pack.

Many of the technologies needed to reach Net Zero already exist, such as those to improve energy efficiency and produce clean electricity, heat and mobility. We need more investment and policy incentives to help scale up and deploy these resource-efficient, low-carbon technologies. More innovation is also needed to deliver cost-effective technological solutions for those sectors in which it is currently harder to reduce emissions, such as certain heavy users of energy in industry and aviation. 

Technologies which capture carbon from the atmosphere and store it are also essential to reach Net Zero. However, the vast majority are not yet commercially available. They also require more investment and innovation to ensure they can operate at the scale needed and at much lower costs.

Businesses constantly transform and evolve to keep up with market demands. To remain competitive in a Net Zero world, business leaders will need to ensure their business models embrace the circular economy, maintain resilient supply chains and have minimal exposure to climate risks. 

For Net Zero to be a desirable goal, it must also lead to a fairer future. Whilst Net Zero brings universal benefits – by way of improved health, new jobs and less vulnerability to extreme weather events – the impacts of the transition will not be felt equally around the world.

We need to navigate the transition responsibly to avoid reinforcing existing social inequalities, and work to address negative unintended consequences on communities, workers and other affected stakeholders.

There are many paths to Net Zero, and the actions and policies we choose must be those which prioritise inclusion, and share the costs and benefits of the transition as fairly as possible.