Energy Advice Hub’s

Net Zero Guide

“We can’t self-isolate from climate change”

Mark Carney, UN Special Envoy on Climate Action and Finance, and Former Governor of the Bank of England 

Introduction to net zero

It may seem at the moment that there is nothing but bad news: the cost of living crisis, political instability, epidemics new and old. It is tempting to think of climate change as a more long-term threat that we can put off handling while we focus on what seems urgent right now.

But climate change is already here. It’s the reason why summer 2022 saw London firefighters facing their busiest day since the Second World War. It’s the reason why wildfires were raging in Portugal, France, Turkey, Spain, Italy, Croatia and Greece. And it’s the reason why the National Grid had to pay the highest price ever recorded for electricity to avoid blackouts in London. Meanwhile, a series of heatwaves in India claimed many human lives and caused birds to fall from the sky.

Dramatic one-off events such as wildfires and floods are the climate change indicators that get the most media attention, but many of the worst effects are less newsworthy. The world’s first international study to link temperature changes with human deaths was published in 2021. It found that climate change could be quietly causing up to five million excess deaths every year, while warming is still less than 1°C above pre-industrial levels. That is the equivalent of the entire population of Los Angeles dying every year from the same cause.

The Intergovernmental Panel on Climate Change (IPCC) has modelled what the world would look like with warming of 1.5°C and 2°C. The difference between those two scenarios is huge. It may be just another half a degree, but a 2°C world doubles the number of plants and animals whose survival is threatened. It also means a significantly more hostile world to human life.

Keeping warming below 1.5°C is a goal worth fighting for, and the best time to start that fight is now. The good – and bad – news is that the challenges facing us are more interconnected than we think. No, we can’t put off dealing with climate change to focus on more immediate problems. But we will find that many of the actions needed to fight climate change will go a long way to solving other serious problems.

For example, many people, including the government, are concerned about rising gas prices and another tough winter. But the International Energy Agency estimates that if the world follows its recommendations on energy efficiency, we could cut global gas usage by around 650 billion cubic metres of gas per year. This is around four times what the European Union imported from Russia in 2021. The reduction in greenhouse gas emissions would help us on the path to net zero – and it also means we could free ourselves from dependence on Russian gas four times over.

Businesses that commit to net zero are playing an essential part in the fight against climate change. On the way, they often find they solve other problems, such as cutting unnecessary costs, improving processes and strengthening relationships. We have created this quick guide to explain the basics of net zero and start you on your journey.

Table of Contents

What is net zero?

The earth’s natural carbon sinks, such as forests and wetlands, have the ability to absorb greenhouse gases up to a point. “Net zero” means lowering emissions to a level where they do not exceed the gases being removed from the atmosphere, so that the overall balance of emissions entering the earth’s atmosphere is zero.

A net zero country or organisation is one that is no longer adding to the increasing concentration of greenhouse gases in the atmosphere, so it is no longer contributing to the warming of the earth. This state is sometimes described as being carbon neutral, but net zero is a more useful term because it covers all GHGs, such as methane and nitrogen oxide, not just carbon.

Why are businesses aiming for net zero?

Everybody has a part to play in the fight against climate change. Almost every country on earth has signed the 2015 Paris Agreement. This international agreement commits signatories to reduce their greenhouse gas emissions to a level that would keep emissions well below 2°C, “preferably 1.5°C”. The IPCC says that the best way to ensure the 1.5°C pathway is to hit net zero by mid-century and hopefully sooner.

Many countries are also setting their own national net zero targets. Sweden was the first country to do this, with a target of net zero by 2045. In 2019, the UK became the first major economy to make the same pledge, but with a later deadline of 2050. Many other countries have followed suit since then.

It is not hard to see that when governments are legally committed to drastically cutting emissions by a certain date, they will develop policies and laws to support this goal. This is already happening in the UK. Certain businesses already have to report on their carbon emissions, investigate opportunities to save energy and report any climate-related risks to the bottom line. Businesses with their own net zero targets can stay ahead of regulatory changes and adapt to a changing world. They can also position themselves as green leaders rather than scrambling to keep up. No wonder that 60 of the companies listed on the FTSE100 have pledged to reach net zero by 2050 or earlier.

Net Zero Global Race

Achieved net zero

Bhutan 🇧🇹 100%
SURINAME 🇸🇷 100%

Legally binding net zero targets in the 2030s and 2040s

Maldives [2030] 🇲🇻
Finland [2035] 🇫🇮
Germany [2045] 🇩🇪
Portugal [2045] 🇵🇹
Sweden [2045] 🇸🇪

Legally binding target of net zero by 2050

European Union 🇪🇺
Canada 🇨🇦
Chile 🇨🇱
Denmark 🇩🇰
Fiji 🇫🇯
France 🇫🇷
Greece 🇬🇷
Hungary 🇭🇺
Ireland 🇮🇪
Japan 🇯🇵
South Korea 🇰🇷
Luxembourg 🇱🇺
New Zealand 🇳🇿
United Kingdom 🇬🇧

Under discussion


Businesses who engage with the issue now won’t be caught unprepared

The business case for a net zero plan

Investors need it

Investors increasingly want to know a company’s position on the climate before they invest. Not just for ethical reasons, but because of its effect on potential returns. Climate change could affect everything about a business, from the strength of its supply chains to its public image.

The Institutional Investors Group on Climate Change is one of many bodies speaking out on the need for capital to support the net zero transition. In August 2021 it said that there is “no time to wait” for action on climate change. This body is not a small pressure group; it represents investors who between them manage €50 trillion in assets.

Regulations require it

As of April 2022, it is compulsory for over 1,300 of the largest UK-registered companies and financial institutions to carry out public reporting in line with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). 

This gives potential investors the transparency they need to make an investment decision with confidence. (For more information on what’s required, read our free guide to TCFD reporting.)

Customers want it​

There is evidence that consumers are becoming more aware of environmental issues and more likely to make sustainable choices when buying. Deloitte’s 2022 survey of consumers found that there had been a sharp increase in the number of people adopting a more sustainable lifestyle. This included everything from giving up air travel and meat consumption to buying more seasonal food.

34% of consumers had stopped buying certain brands because of environmental concerns – but only 7% had actually contacted a brand to raise these concerns. Customers won’t necessarily tell you in words that they want you to think about the climate; they’ll just move on to your greener rivals.

Everybody’s watching​

Many businesses are now required by law to report on their carbon emissions, under schemes such as the TCFD rules or Streamlined Energy and Carbon Reporting (SECR). But even with no such obligations, businesses are under more scrutiny than ever before from potential investors and from an increasingly knowledgeable public and press. So even if your business is not currently in scope of any climate-related regulations, you need to have a plan. It just makes good business sense to have a realistic strategy for reaching net zero.

Which businesses are moving to net zero?

You might expect the list of businesses with a net zero target to be dominated by companies in “green” sectors, such as renewable energy supplier Ecotricity with its target of net zero by 2050.

But many different kinds of businesses have made the commitment, including furniture giant IKEA, one of the world’s largest retailers, Tesco, steelmaker ThyseenKrupp, and Nestle, the second biggest food and drink company in the world.

It is significant that many companies in traditionally emissions-intensive sectors have made the commitment too, such as BP, Repsol, and the airline Qantas. F1, the Formula 1 racing body, has committed to net zero by 2030.

Net Zero ThyseenKrupp
Net Zero IKEA
In the UK, larger organisations have found that mandatory schemes such as SECR and the Energy Savings Opportunity Scheme (ESOS) have actually helped them along the road to net zero. Although until recently there was no requirement to have a plan for cutting emissions, these schemes oblige large companies and LLPs to measure their energy use/carbon footprint. This mandated process of measuring emissions in detail often helps businesses to identify areas where it would be easy and cost-effective to cut emissions. So, such schemes often lead to carbon savings despite not including any such obligation.

Are there any other benefits to setting a net zero target now?

The most immediate benefit of starting on the path to net zero, for most businesses, is cutting energy costs. Most businesses start with the “low-hanging fruit” of changes that are simple and cost-effective in the short term, then move on to changes that take some time to pay for themselves.

Getting all the way to net zero usually involves re-examining every aspect of your business and making radical changes. That’s why most companies need a multi-year plan for getting there. But as time goes on, continuing with unsustainable levels of emissions will become a less and less realistic option. Public attitudes and legislative frameworks will eventually push businesses towards cutting emissions.

Getting a plan in place and taking action now means that you can carry it out more gradually and future-proof your business. As new solutions are developed and investment in transformational technologies grows, these opportunities will become more accessible to your businesses which means your plans will and should develop and grow over time.

Where on earth do I start?

As the saying goes, you can’t manage what you don’t measure. Data is absolutely key to any kind of emissions reduction plan. You need to have a clear idea of what emissions you are producing in different areas of your business before you can work on bringing them down.

Emissions are divided into three categories, or scopes. Scope 1 means emissions from the fuel your business burns itself. On-site heating, fleet cars and so on. Scope 2 means emissions from electricity purchased and used by your business.

Scope 3 emissions are the trickiest but unfortunately usually the most important. These are emissions generated by activity related to your business, but not directly by your business. That could mean emissions from raw materials you buy, the transport of your goods or the disposal of your waste products.

Most businesses start with Scopes 1 and 2. Once you know how much energy you’re using, you can then focus on what can be done to reduce it. That will typically happen through a mix of energy efficiency measures and energy demand reduction.

Your remaining energy demand should be supplied by renewable sources. These could be on-site, or off-site via a Corporate Power Purchase Agreement (for more info on CPPAs, read our guide).

But any valid net zero strategy eventually has to tackle Scope 3. And there are a surprising number of business benefits to this.

Click image to enlarge | Download (PNG)

Know the unknown

On-going data monitoring and clear visibility of your emissions is key. This ensures you always understand the gap between your current emissions and where you need to get to, to achieve net zero.

Every business will have a different path to net zero, and the easiest way to develop a plan that works for your specific needs is by getting professional, tailored advice.

“The world’s scientists have been very clear on what’s at stake for mankind if we don’t act on climate change. Our political leaders now need to lead and give people confidence that all the changes needed to deliver net zero are desirable and possible for all of us.”

Sir David Attenborough

Pathways to net zero

Currently, there is no single official pathway to net zero. Organisations have freedom to choose their own route based on their own aspirations, resources and company culture. But there are a number of widely accepted standards for carbon reduction plans which can be used to provide a framework and externally validate your progress.

Following a respected scheme such as the Science-Based Targets initiative is a way of ensuring that your net zero strategy is robust enough to stand up to future regulatory requirements. In other words, it’s futureproofing your business.

Companies such as Sustainable Energy First develop sustainability programme that is tailored to the organisation’s individual situation and goals. This provides an initial roadmap of how energy use and emissions can be reduced in line with their current level of ambition. We encourage action to be taken straight away to start making savings and to reduce emissions. From there a road map to net zero is developed in partnership with the organisation, resulting in a comprehensive plan for action.

Some of the most common schemes/initiatives a company’s carbon and energy program would adhere to are:

Science-based targets

“Science-based targets provide companies with a clearly defined pathway to future-proof growth by specifying how much and how quickly they need to reduce their greenhouse gas emissions“. As of writing, 817 companies are taking science-based climate action and 339 companies have approved science-based targets. SBT have become a widely regarded benchmark for net zero action.


The UN’s SDG is a shared blueprint helping governments and stakeholders make the sustainable development a reality. A pledge to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030.


An index measuring the performance of companies that demonstrate strong Environmental, Social and Governance (ESG) practices.


A global not-for-profit that runs the disclosure system for companies, cities, states and regions to manage their environmental impact.

Verified Carbon Standard

The most widely used voluntary GHG program with over 966 million tonnes of carbon/GHG emissions removed/ reduced by over 1800 certified projects.

Achieving net zero

We are all essentially in uncharted territory. Never before in the history of the world have organisations set out to drastically reduce their greenhouse gas emissions in this way. 

But this great challenge is also a great opportunity. When an organisation embarks on its net zero journey, it encounters unexpected benefits such as reduced energy costs, investor confidence, happier customers and stronger supplier relationships. 

More importantly, you become a leader in the sustainability space and do your bit to fight climate change. Action on the climate is long overdue; now is the perfect time to start.

More information

Request our full net zero guide in the adjacent form. 

You’ll gain information about path ways, and technology partners as well.

Project net zero

Alternatively, visit our dedicated sister-site, Project Net Zero, for net zero risk information, funding insights and more.

Free net zero guide