It’s exciting to see CEOs of major corporations publicly commit to achieving net-zero emissions. Just in September, we saw AT&T, Walmart, Facebook and Morgan Stanley make commitments, with over 70 companies declaring their intention to achieve carbon neutrality at some date. They join over 60 countries who have made net-zero commitments, some by sector (e.g., electricity generation) and some economy-wide. The most dramatic examples come from the world’s first and fifth largest emitters, China and Japan, with economy-wide net-zero commitments by 2060 and 2050, respectively.
These leaders show ambition, a recognition of science, and dedication to rapid and profound decarbonization. We owe them a debt of gratitude for taking the critical steps to invest in a better future, and they deserve to enjoy the recognition and applause that follows their announcements.
Then they wake up the next day and ask “good lord – how do I DO this?”
Making good on a “net zero” pledge isn’t as simple as it sounds. As with so much in countering climate change, the work covers every aspect of the modern world and the math matters. The journey is hard. Many CEOs, Minsters, and leaders will follow the same challenging path of coming to an understanding of what’s really involved with meeting these goals, including the recognition that reaching net-zero is not possible without carbon removal (also called negative emissions).
These pioneering CEOs and ministers will need help with their inevitable emotional journey. For them, and for those who will hopefully come after them shortly, we’ve assembled a list of the stages of net-zero commitments. CEOs, take note: you may soon be on this path as well.
Stage 1: Exhilaration.
After shareholder pressure, strategic insight, or another catalyst, you make a public promise to achieve net-zero emissions within some responsible timeframe. The target is exciting and the promise is earnest. Your employees are proud. You receive praise for your courage and commitment. Your share price rises. You direct your corporate sustainability staff to look into the details of accomplishing this goal. You are a general in an army of progress. You have a martini.
Stage 2: Shock.
You learn that 80% of your emissions can’t be lowered by buying renewable energy. You ask about carbon offsets, but your team explains that most are invalid and the supply of valid offsets is small. Your supply chains for zero-carbon products are immature, and someone mentions thermodynamics and the carbon cycle. You assert that it can’t be too hard to figure out and send your team back to work.
Stage 3: Bargaining.
You look for the lowest cost, credible options to reduce emissions and realize they cost more than you expected – well above $5 per ton you had budgeted. You ask your team how much farther they could go if they had more money and start to haggle over price with them. You learn what you already suspected: despite all the publicity around climate, the market doesn’t really value it yet, and the policy framework of the nations where you operate doesn’t really support net-zero ambition. You ask the government to expand tax credits or build infrastructure. You wonder if you need to delay hitting your targets.
Stage 4: Despair.
Once the sustainability team has looked closely at the numbers and the real options on the table, it’s time to start worrying. Renewables, offsets and energy efficiency won’t take you all the way to zero. The math isn’t even close without negative emissions – you’re off by 20-30%! Options talked about for years still barely exist. You realize this is much harder than it sounds, and you can’t simply buy your way to net zero. You ask “Why didn’t somebody warn us this would be tricky?” and remember that somebody on your team did. You realize you may fail to make your target. Like a failed weight-loss commitment, you announce a more ambitious target. This time, the stock market does not respond. You have two martinis.
Stage 5: Acceptance.
After some further hard work, the sustainability team finds a glimmer of hope. There may be a pathway to finding the negative emissions that you need, but you’re going to have to invest. Many companies offering negative emissions are immature and small-scale, and you’ll have to help them grow. They’re the seeds of an industry, not a commoditized market – but you can help them get there. You start to think about a portfolio instead of silver bullets. This is much harder than just buying offsets, but it might actually work.
Stage 6: Back to the blackboard.
You learn some details of negative emissions. There are so many different kinds! Trees, soils and plants; bioenergy and carbon capture; direct air capture; something with minerals that’s hard to follow; seaweed; something with ocean chemistry that’s even harder to follow; and a lot of confusing combinations of them all. Some seem real and start to make sense. You assess projects and fields and consider supply chains and validation protocols. With time and investment, a portfolio of options could lead to large-scale, verified removals of carbon from the air and oceans, which is the final thing you need to get you to net zero.
Stage 7: Walking the walk.
You buckle down to the hard task of helping scale up an industry to provide negative emissions. Not all of those projects or small companies will make it, but the ones in your portfolio that do – with your help – will be real, and they’ll scrub out enough carbon to cancel your residual emissions. You can reach your target of net zero and fulfill your vision, but it won’t be easy. The real work has finally begun. You invest well and sidestep traps. You already envy those who will come after you once you help build the industry – but that’s what it means to lead.
We offer these seven stages not to scare CEOs who are contemplating their own net-zero commitments or shame those that have, but rather as a roadmap to those willing to take those hard but necessary actions. Leaders who travel this path will bear scars. They will also position their companies for high valuation, strong recruiting, and a thriving enterprise for years. Moreover, they will have contributed to the fight against catastrophic climate change and leave a lasting legacy for future generations.
The core math of net-zero is pretty clear – any emissions anywhere must be countered through CO2 removal. That CO2 removal process cannot simply be avoiding the growth of emissions – it must actually take tons out of the air and ocean and keep them out for a long time. As businesses and nations mature their commitments, they will innovate all aspects of their world. They will become more efficient. They will create new contracts and new corporate forms. They will offer customers and citizens more products, policies and options.
The recommendation? Start now. The world needs a mature CO2 removal market and soon. Make targeted investments to help the market scale. Make targeted high-cost purchases and high-risk purchases to learn what you need to learn. Be modest in your statements and ambitious in your efforts.
It ain’t easy. Everyone gets a chance to work.