Clarifying Net Zero Targets

<p class="para">In collaboration with our partner <a class="u-link-blue" href="https://aus01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.elevatesuper.com.au%2F&data=05%7C01%7Colivia%40atlastrend.com%7C8655fc691a6744bfc3bd08da8ba34351%7C7537821cfed149168715f91f727214ef%7C0%7C0%7C637975831542338810%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000%7C%7C%7C&sdata=mmP9IdStxyYY3KVzNSGAGvx0WxMUwBVlSOqmj%2Fw9peQ%3D&reserved=0">Elevate Super</a></p>

<p class="para">Anyone who is anyone is claiming net-zero these days. But what do these claims mean? And how do carbon offsets fit into the picture?<br />According to <a class="u-link-lighter-blue" href="https://www.mckinsey.com/business-functions/sustainability/our-insights/the-net-zero-transition-what-it-would-cost-what-it-could-bring?cid=netzero-pse-gaw-mst-mck-oth-2201&gclid=Cj0KCQiAuvOPBhDXARIsAKzLQ8HRDoBLdHrqq4xXNu_Uli0EqZRVEEGw-QMv8XSsL2eeyGsXP_yLUPAaAnzoEALw_wcB&gclsrc=aw.ds%20">McKinsey</a>, as of December 2021, more than 70 countries and 5000 companies (accounting for more than 80 per cent of global Co2 emissions and about 90 per cent of global GDP) have put net-zero commitments in place as part of the <a class="u-link-lighter-blue" href="https://www.un.org/en/climate-action/race-net-zero-economy">United Nations Race to Zero</a> campaign.</p>

<p class="para-header" style="padding-top: 30px !important">What does it mean exactly?</p>

<p class="para">The term net-zero refers to net zero Carbon Co2 emissions. Companies and countries are increasingly using Net Zero in response to the growing demand for bold commitments to climate action.</p>

<p class="para" style="padding-top: 25px">Net Zero has evolved from the concept of Carbon or Climate Neutrality.</p>

<p class="para-header" style="padding-top: 30px !important">Carbon Neutrality / Climate Neutrality</p>

<p class="para">Carbon Neutrality is a term used by many companies, products, events and websites. It is defined as having measured, reduced and offset your carbon footprint, which should result in a balance between the emissions caused (output) and the avoided emissions– i.e. neutrality.</p>

<p class="para" style="padding: 25px 0">The UN uses Climate Neutrality as an official term to include all greenhouse gases (GHG) emissions (not just CO2 emissions).</p>

<p class="para" style="margin-bottom: 0 !important">Three defined categories must be measured to achieve neutrality:</p>

<ul class="single-blog"><li>Scope 1 emissions are direct emissions, e.g. the Carbon emitted by a company’s vehicle fleet.</li><li>Scope 2 emissions - are indirect emissions, e.g. the <a class="u-link-lighter-blue" href="https://www.climatepartner.com/en/services/green-energy">company’s building’s electricity</a></li><li>Scope 3 - covers a wide range of indirect emissions such as supply chain, business travel or employee commuting.</li></ul>

<p class="para" style="margin-top: 40px; margin-bottom: 20px">For a business to claim carbon neutrality, they only need to offset Scope 1 and 2 (direct and company indirect) emissions.</p>

<p class="para-header" style="padding-top: 30px !important">Why Net Zero?</p>

<p class="para">There is now to widen the scope of this definition towards including Scope 3 emissions, including all related emissions along a company’s value chain, including raw materials, production, logistics and packaging, for example, in the calculations, towards Net Zero carbon emissions.</p>

<p class="para">Net Zero is an attempt to step up carbon neutrality by setting a minimum target for carbon reduction that includes a majority of Scope 3 emissions within a specified timeframe. Setting a Net Zero commitment starts by taking responsibility for carbon emissions, typically including at least 66% of Scope 3 emissions.</p>

<p class="para">Net Zero is a framework that supports the gradual movement towards an approach that avoids Carbon rather than just removing Carbon.</p>

<p class="para">The purpose of the Net Zero commitment is aligned to limit global warming to 1.5°C</p>

<p class="para-header" style="padding-top: 30px !important; margin-bottom: 50px">Carbon offsetting projects</p>

<p class="para">Quickly reducing carbon emissions to zero is a challenging task for most companies, which is why companies use Carbon Offsetting.</p>

<p class="para">Carbon offsets typically take two forms of Carbon Avoidance & Carbon Removal.</p>

<p class="para">Carbon Avoidance: These come from various technologies ranging from renewable energy, forestry and community-based projects. Forest conservation avoids deforestation-related emissions, helps preserve biodiversity and provides alternative income for local communities. Clean gas initiatives enable communities to avoid emissions linked to burning wood for cooking that would otherwise have occurred if not for the offset project.</p>

<p class="para">Carbon Removal: Removal projects are mostly limited to nature-based solutions. The most well-known example is planting trees. Did you know that Blossom has planted over 3000 trees? The idea is that these remove emissions from the atmosphere for as long as possible (or ideally indefinitely). Other emerging areas like Blue Carbon (mangroves, sea kelp and seagrass) or Soil Carbon are also starting to gain momentum.</p>

<p class="para">There are many considerations towards a Net Zero carbon emissions statement. So when you engage with a company talking about Net Zero (or any other similar term), it’s essential to consider the fundamental commitments that underpin it.</p>

<p class="para">Co-written by <a class="u-link-blue" href="https://aus01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.elevatesuper.com.au%2Fabout%2F&data=05%7C01%7Colivia%40atlastrend.com%7C8655fc691a6744bfc3bd08da8ba34351%7C7537821cfed149168715f91f727214ef%7C0%7C0%7C637975831542338810%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000%7C%7C%7C&sdata=Ovf7N%2F0l6NOJBFpSJALpmfgLjf86CMvaIJj8d07B4To%3D&reserved=0">Victoria Kent</a>, Senior Investment Specialist, Elevate Super & Blossom App.</p>

<p class="para" style="margin: 0">About Elevate Super:</p>

<p class="footnote"><a class="u-link-lighter-red" href="https://elevatesuper.com.au/?utm_source=blossom&utm_medium=partner&utm_campaign=article">Elevate Super</a> is a retail super fund, powered by successful fintech AtlasTrend. <a class="u-link-lighter-red" href="https://www.atlastrend.com/?utm_source=blossom&utm_medium=partner&utm_campaign=article">AtlasTrend</a> was created in 2015 to build a new investment service to help our customers learn and invest with purpose in long term world trends. At Elevate Super, we believe you shouldn’t have to give up competitive financial returns to do good.<br />We assess and measure investments based on their long-term growth fundamentals plus positive contribution to the UN Sustainable Development Goals (SDGs) – a global blueprint for balancing our economic, social and environmental needs.</p>

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