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Net zero is a recent addition to the terminology around global warming, climate change and greenhouse gas emissions. It’s important to understand what net zero means to industry and small businesses.

What does net zero mean for business?

Becoming a net zero business means that your business activities and your value chain have no net impact on the climate from your greenhouse gas emissions.

To get involved and take action towards becoming a net zero business, you should focus on four main areas:

• minimising your own emissions
• reducing emissions in your supply chain
• integrating climate action into your business strategy
• working to promote climate action across society

In line with international commitments, under the Paris Agreement, to limit global temperature rises to no more than 1.5 degrees Celsius, businesses should aim to:

• halve their emissions by 2030
• reduce their emissions to close to zero before 2050

Find out more about how to set net zero targets for your business.

Any remaining emissions which cannot be eliminated from your business activities (ideally no more than ten per cent of your base year emissions) should be offset.

Is carbon offsetting a way to reach net zero?

Carbon offsetting means greenhouse gas emissions are being reduced somewhere else, by someone else, to make up for continued emissions from your business.

Offsetting is a recommended way to bridge the gap to full net zero where a small percentage of greenhouse gas emissions from your business cannot yet be eliminated. This should be through funding high quality and permanent carbon removal projects, which are approved by a recognised certification organisation.

However, carbon offsetting is not a substitute for cutting emissions from your business. Transferring your climate responsibility elsewhere while continuing to pump out greenhouse gases could be considered greenwashing - when your business falsely gives the impression it is addressing climate responsibility.

Introduction to net zero for businesses

The Carbon Trust has recorded an introductory webinar on net zero for businesses which can help you understand more about the concepts and terminology.

Businesses with net zero ambitions need to learn and understand climate language and terminology to become carbon literate.

Carbon (or climate) literacy is awareness of the impact of everyday business activities and greenhouse gas emissions. It helps you to build knowledge and confidence to speak with authority on actions needed within your business to reduce emissions and tackle climate change.

Ten net zero terms your business should know

There are terms and concepts around climate change, carbon emissions and net zero action which you, your staff and your business supply partners should be familiar with.

1.5 degrees Celsius

, setting the world on a path to limiting global warming to well below 2 degrees Celsius, and trying to limit the rise to only 1.5 degrees Celsius, compared to pre-industrial global temperatures.

Carbon footprint

A carbon footprint is the total amount of greenhouse gases which a business (or individual) generates through its action. The first step to setting a net zero target for your business is to measure your carbon footprint fully and accurately.

Carbon offsetting

This is investing in carbon removal projects outside of your business to balance against the carbon you emit, capturing and storing carbon through natural projects (such as forests, bogs, coastal ecosystems) or innovative new technological projects.

Climate change adaptation

Effects of climate change are already being recorded through variable weather, and new effects will arrive as global temperatures rise over the coming decades. Adaptation actions are about recognising unavoidable disruptions and altering how you do business to cope with change.

Climate change mitigation

Mitigation is about the actions your business and society can take now to lessen greenhouse gas emissions to help prevent the worst-case scenarios of extreme global temperature rises from happening.

Decarbonisation

This is the long-term aim to create a society with minimal greenhouse gas emissions and is sometimes used to describe sector-specific action plans to reduce carbon emissions.

Emissions

This refers to the greenhouse gases released into the atmosphere due to your business activities. There are three types of emissions which businesses need to understand for their net zero plans:

• Scope 1 – direct emissions from your activities like fuel combustion and other emissions from your operations.
• Scope 2 – emissions from the production of purchased energy like electricity, heat, steam, or cooling.
• Scope 3 – indirect emissions generated from all activities upstream and downstream of your business (value chain) such as purchased goods and services, business travel and staff commuting, primary waste and end of life product disposal, transport and distribution, and more.

The greatest impact by your business is likely to be from Scope 3 emissions, which are also the hardest to accurately quantify.

Greenhouse gases

These are natural gases and human-produced gases causing the greenhouse effect where heat is trapped, leading to average global temperature rises. These have increased in the atmosphere over the last 150 years. Under climate change legislation, six greenhouse gases are defined:

• carbon dioxide (CO2)
• methane (CH4)
• nitrous oxide (N2O)
• hydrofluorocarbons (HFCs)
• perfluorocarbons (PFCs)
• sulphur hexafluoride (SF6)

Just transition

This means tackling climate change in a way that distributes the benefits and costs in a fair way so that .

Science-based targets

These are business targets for greenhouse gas emissions reductions that align with the latest scientific advice on meeting the goals set out in the Paris Agreement to limit global warming.

Carbon literacy training for businesses

has been designed to raise awareness and explore the opportunities, risks and challenges that climate change will present.

to a wide range of groups to raise awareness of the climate change emergency and how to get involved in finding solutions.

If you want to deliver training in-house, you can .

A carbon footprint is the total amount of greenhouse gases generated by your business activities.

Carbon footprints are used by businesses which have mandatory reporting requirements under carbon emissions trading and reporting schemes. They are also used voluntarily to show climate awareness and action by businesses.

Calculating your carbon footprint is the most important first step to becoming a net zero business. It allows your business to set baselines for your emissions reduction targets, and then to accurately measure progress against those targets.

How to calculate a business carbon footprint

There are five key steps to follow to calculate your organisational footprint. These are:

1. Decide on the method to follow – a consistent method will help to ensure an accurate result.
2. Define the organisational and operational boundaries – the operational boundary determines which emission sources you will quantify, so it's important to be realistic when choosing it.
3. Collate the data – you'll need to collate consumption data for all the emission sources within your chosen boundary.
4. Apply emissions factors – .
5. Verify the results – this is optional, but it adds credibility to your calculation.

If you have taken action to reduce your carbon footprint you may want to verify this. This is optional, but independent certification will add credibility to your reduction claims.

Find carbon footprint calculators

The SME Climate Hub has created a free . You can use it to estimate your full carbon footprint and find quick actions to reduce emissions from your business.

The Carbon Trust have produced a downloadable guide to carbon footprints, and how should you measure, calculate, and communicate them – .

Other tools are available on the market, and your business may benefit from the expertise of contracting a specialist carbon footprinting service.

Your business is ready to make credible commitments to reduce greenhouse gas emissions when you’ve established a baseline – see how to calculate the carbon footprint of your business.

Make your net zero commitment

Making a public net zero commitment can help businesses stick to their plan and work to meet their targets. A commitment lets everyone involved in your business and value chain, and potential new customers and partners, know that you are serious about net zero and can demonstrate progress.

Your broad commitment should include the near-term target of halving emissions before 2030 and the long-term target of achieving net zero emissions before 2050.

The SME Climate Hub is a global initiative that aims to mainstream business climate action and build resilience. They have developed a standardised text as an example of how to commit to becoming a net zero business:

.

You should then publish and communicate your commitment to staff, customers and suppliers, along with further details on how you will monitor progress and transparently report this on an annual basis.

Start to take action towards net zero

Once your business has made its net zero commitment, you should begin to take actions in the following months.

For example, you could start by developing a detailed action plan setting out how you intend to achieve your reduction targets.

Your net zero action plan should include detailed information on:

• existing Scope 1, 2 and 3 emissions – see carbon literacy for your business
• where reductions will be made
• overall timescales and interim checkpoints for reductions
• business growth projections and how you'll target any additional emissions that arise

The Cabinet Office has developed a Carbon Reduction Plan template for demonstrating net zero commitment when bidding for major government contracts – it can act as .

You should then begin to take concrete actions to reduce your emissions in line with your action plan - find out more about how to cut your carbon emissions.

Announcing your business commitment to net zero sets the expectation that you will share your targets and the actions you will take to achieve them. There will be an expectation that you monitor your emissions reduction across the lifetime of your commitment and publish annual reports on your progress.

Customers, business partners, staff and other interested parties will expect your transparency. This openness can also improve your business brand and help to demonstrate the importance of net zero actions to your industry and society.

Ongoing monitoring and reporting can allow your business to regularly evaluate your results, plus help you take any corrective actions and make updates to your plan as circumstances change.

What to include in your net zero progress report

An annual report on net zero progress by your business should include:

• an overview of your headline commitment and targets, and any amendments
• a detailed disclosure of your greenhouse gas emissions in the last year
• the percentage reductions achieved along with the outlook for the near future
• the specific actions you’ve taken to cut your emissions
• details of how your business strategy is evolving to embed net zero

You should consider third-party auditing and verification of your reporting to enhance its credibility.

Net zero standards, certification and accreditation

Using published environmental standards can help your business to meet best practice in reporting and verification of your progress in cutting emissions.

are being sponsored by the Department for Business, Energy and Industrial Strategy (BEIS) as part of their commitment to 91Ï㽶»ÆÉ«ÊÓƵ small and medium-sized organisations to manage their energy performance and help the United Kingdom to meet net zero.

The Carbon Trust has developed certification which can guide and 91Ï㽶»ÆÉ«ÊÓƵ your business towards net zero and climate leadership called the .

The UK Accreditation Service (UKAS) has published guidance on .

The British Standards Institute (BSI) has published a guide on .

Other environmental standards

ISO 14001: 2015 – Environmental Management Standard specifies the requirements for an environmental management system that an organisation can use to enhance its environmental performance – .

ISO 50001: 2018 – Energy Management Standard specifies requirements for establishing, implementing, maintaining and improving an energy management system – .

PAS 2060:2014 – Publicly Available Specification for the demonstration of carbon neutrality can be used for your entire business or to any uniquely identified subject, such as specific activities, products, services, buildings, projects, or events – .

Your business can be a climate leader by using your network and wider sphere of influence to help accelerate climate action in society. Advocating for wider climate action will naturally benefit the environment but can also make it easier to run a net zero business with more suppliers, partners and customers who want to do business with you.

How to be a net zero champion

You should spread the word about your own net zero commitment and the progress you are making each year. Your reports should include sharing your story with examples of how you’ve cut your greenhouse gas emissions, reduced your waste, etc.

You can invest in projects which take a nature-based approach to avoid or capture emissions, also known as carbon offsetting. Offsetting is an important part of balancing the toughest to cut emissions from your business, but you can get involved in local or international projects which go beyond your own business carbon balance needs. You could also devise and deliver your own nature-based solution on your business property or land as part of your action plan.

Getting your staff involved in climate action can spread the benefits of net zero action beyond your value chain, and help your employees to feel valued in their efforts.

is a practical guide that can help business leaders understand the intersection of climate action and social justice and advance a justice-centred approach to climate action.

Work with your sector to develop net zero roadmaps

Partnership working to achieve shared goals and benefits for all businesses, even with local competitor companies, can help to boost your overall industry sector.

The Net Zero Council has developed a new framework to help empower businesses to create tailored action plans to reduce emissions across their sector. The guidelines provide a robust, credible and consistent set of criteria for business sector roadmaps to ensure they can effectively reduce emissions - .

Local opportunities to champion climate action

Business in the Community offers ways to .

You can get involved in local networking events to spread the word about net zero business ambitions by joining Northern Ireland business networks.

You can find environmental business events for networking opportunities, or you can organise and list your own climate events, through our .

Climate change is changing how the world does business due to unavoidable effects now, and in preparation for effects that may be on the way.

There are many benefits to your business of becoming net zero, beyond the positive effect on the environment of reducing your emissions.

Net zero business advantages

Recognition and marketing

If your business makes tough decisions and sets itself on a path to net zero, you should shout about it. Customers are becoming more and more climate-conscious and are attracted to products and services which have a low impact on the environment.

You can market the genuine environmental benefits of the actions taken by your business, and you can seek recognition through business awards - find out more about how to market your environmental credentials.

Businesses that make the SME Climate Commitment will have their name/logo featured on the and be recognised by the United Nations Race to Zero campaign.

Business in the Community celebrates local businesses which are demonstrating a significant commitment and contribution to climate action through their annual .

Becoming more competitive

Businesses which can demonstrate an authentic commitment and progress towards net zero are more attractive to climate-conscious customers and can grow sales at the expense of competitors.

Public sector tendering competitions are increasingly setting business commitment to net zero as a minimum requirement to be considered for contracts. and is likely to become the norm for most, if not all, contracts between now and 2050.

Building business resilience

Climate change might appear to have greater impacts in other parts of the world, but businesses here will feel those effects. Extreme short-term weather and longer-term climate patterns can disrupt your supply chains.

Becoming a net zero business can go a long way to protecting against economic, climate and regulatory shocks now and in the future.

The UK Government publishes a climate change risk assessment (CCRA) every five years, which includes advice on adaptation actions for different sectors - you can .

Long-term cost reductions

Making changes to your way of doing business rarely comes without cost in the short term. However, you should seek to maximise the efficiencies which net zero businesses can find through reduced energy, waste and water costs. Businesses with minimal greenhouse gas emissions and environmental impacts may also find themselves able to avoid future carbon and waste taxes.

Attracting investment

Having a strong business strategy for the future with sustainability (both for business viability and the environment) at the centre is important for investors. Net zero plans are likely to become an essential element when making investment decisions – find out more about how to attract investment.

Early mover advantage 

The potential advantages listed above come with risks attached in investing and working to achieve them, but becoming a net zero business can put you ahead of others in your industry and help you to establish a larger market share while others catch up.

Awareness of climate change issues among small businesses is growing, as is the wish to join in climate action. However, many small businesses struggle to overcome barriers to reducing their carbon emissions. Understanding these barriers and finding practical solutions is critical to becoming a net zero business.

Key barriers to business net zero actions

Costs

Upfront capital costs to upgrade items such as machinery and vehicles can be difficult for small businesses to fund. The inability to purchase at scale can mean higher costs per unit for low-carbon raw materials, products, and services.

Ongoing costs can also place a burden on your business and add to worries about remaining competitive on price, especially if your competitors are not taking similar actions.

You should aim to attract customers who value net zero commitments, or business customers which need low-carbon suppliers as part of their own value chain reporting, by marketing your climate actions. You can also gain a competitive advantage in tendering for contracts, more of which are requiring verified net zero commitments.

Feasibility and credibility

Small businesses can often struggle to find net zero solutions that work for them. It can be difficult to accurately define (and therefore tackle) your carbon footprint, especially Scope 3 emissions across your value chain. Lack of access to accurate or cost-effective monitoring and verification tools can affect the credibility of your green claims and progress to net zero. An over-reliance on carbon offsetting could open your business to accusations of greenwashing.

Free carbon footprint tools are available to get you started, but you may benefit from the expertise of professional carbon footprinting service providers.

Capacity and skills

Many businesses are busy focusing on day-to-day tasks making it hard to devote significant time and resources to fundamental business change that may not positively impact profitability in the short term.

It can be challenging to see how small changes in your business can make a difference on a global scale. Also, to make a change, you may need investment in staff training or recruitment to fill dedicated roles focusing on net zero priorities.

The coronavirus pandemic showed how the short-term effort of making necessary changes to business operations can bring long-term benefits in terms of efficiencies and new ways of working. Setting medium-term goals, and quantifying the potential benefits of change, can provide focus.

Willingness and resistance

People within your organisation, and your supply chain, may have strong views opposing the science of climate change and, in contrast, do not see it as a problem. Key staff may resist business change based on short-term impact on revenue or the diversion of investment from profitable carbon-intensive activities.

Climate literacy can help people to understand wider issues, but as a business owner it’s important to set a clear and understandable direction that can help to attract and motivate staff who can deliver on your net zero ambitions.

Contractual obstacles

Your business may be limited in your scope for action by existing contracts such as with a service provider, supplier contract or a building tenancy agreement. These partners may be unwilling or simply unable to make the necessary adjustments to meet your net zero requirements.

You should approach your partners to discuss what’s possible in the short term and until your contract expires. You may be able to convince them of the joint marketing benefits of making positive actions on greenhouse gas emissions reductions.

If you ultimately need to find new providers, suppliers, or alternative arrangements for premises, you should weave these timescales into your net zero plan.

Changing your business strategy and direction to become a net zero business can be daunting – but you don’t have to do it alone. A growing range of 91Ï㽶»ÆÉ«ÊÓƵ schemes is available to help you on your journey.

has guidance on sourcing financial 91Ï㽶»ÆÉ«ÊÓƵ for reducing emissions, including from:

• customers/buyers
• banks
• grants and other government 91Ï㽶»ÆÉ«ÊÓƵ
• balance sheet and investors

You can find more information on climate awareness programmes and events.

National 91Ï㽶»ÆÉ«ÊÓƵ for net zero businesses

United Kingdom government-backed schemes are available to 91Ï㽶»ÆÉ«ÊÓƵ businesses making innovative and game-changing investments in a green future for themselves, their sectors and customers.

Industrial Energy Efficiency Accelerator

Funding for industrial-scale demonstrations of novel technologies with the potential to reduce energy consumption, maximise resource efficiency and cut carbon emissions – .

Industrial Energy Transformation Fund

Financial 91Ï㽶»ÆÉ«ÊÓƵ for businesses with high energy use to cut their energy bills and greenhouse gas emissions through investing in energy efficiency and low carbon technologies – .

Workplace Charging Scheme 

A voucher-based scheme that provides eligible applicants with 91Ï㽶»ÆÉ«ÊÓƵ towards the upfront costs of the purchase and installation of electric vehicle charge points – .

Gigabit Broadband Voucher Scheme

A voucher-based scheme for businesses experiencing slow broadband speeds in rural areas to help to cover the costs of installing gigabit broadband – .

Local business 91Ï㽶»ÆÉ«ÊÓƵ programmes for net zero

Several local 91Ï㽶»ÆÉ«ÊÓƵ programmes for environmental action, climate mitigation and progressing towards net zero are available for businesses:

Cycle-Friendly Employer Accreditation Scheme

Scheme which helps organisations become cycle-friendly employers - find out more about the Cycle-Friendly Employer Accreditation Scheme.

Employer active travel 91Ï㽶»ÆÉ«ÊÓƵ

Scheme which 91Ï㽶»ÆÉ«ÊÓƵs employers to encourage their employees to consider active travel in their daily routine - find out more about Employer active travel 91Ï㽶»ÆÉ«ÊÓƵ.

LiveSmart Community Environmental Grant Programme 2024-25

Causeway Coast and Glens Borough Council financial assistance to allow groups and organisations to improve the general cleanliness in their local area, particularly in respect of litter, to promote recycling, reuse and waste reduction, and to look at ways of reducing carbon footprint by taking simple, practical actions such as planting - find out more about the LiveSmart Community Environmental Grant Programme 2024-25.

Operational Excellence Solutions

Coaching 91Ï㽶»ÆÉ«ÊÓƵ to help Northern Ireland companies improve their competitive advantage by increasing their productivity and profitability - find out more about Operational Excellence Solutions.

Sustainability Reports

Invest Northern Ireland 91Ï㽶»ÆÉ«ÊÓƵ to give businesses an understanding of their environmental performance across several areas, such as raw materials, energy, carbon, packaging, biodiversity and waste - find out more about Sustainability Reports.

Resource Matching Service

Invest NI and International Synergies provide an opportunity to transfer business waste, unwanted materials and by-products from one business or organisation to be reused, recycled, reprocessed and repackaged by another - find out more about the Resource Matching Service.

Technical Consultancy Service for energy and waste management

Invest NI 91Ï㽶»ÆÉ«ÊÓƵ to help you identify areas for increased efficiency and cost savings is available to all Northern Ireland businesses with an annual energy and resource spend more than £30,000 - find out more about the Invest NI's Technical Consultancy Service.

Find these and more 91Ï㽶»ÆÉ«ÊÓƵ programmes through our Business Support Finder tool.