Northern Gas and Power’s Business’ Guide to Net Zero

We believe businesses can be the main driver to help the UK reach its legally binding net zero 2050 target. This has always been our instinct through a decade of work in the global utilities sector, where we have worked with 22,000 customers across multiple industries and across three continents. We see the growing, persistent appetite for real climate change action, evidenced by the increase of climate initiatives and the demand by consumers for businesses and organisations to be environmentally conscious. 

What does net zero and climate change mean for your business? In this guide, we want to discuss the incremental and manageable ways in which businesses like yours can approach climate change, decarbonisation, and net zero. 

 

Defining terms associated with climate change and sustainability

The number of terms describing or relating to net zero, climate change, and sustainability have proliferated over the years, and some of these terms are used so frequently that their meanings and impact are lost to listeners. Sometimes, too, these terms are used interchangeably when they should not be. All of this can create confusion and misunderstanding towards what net zero or climate action truly entails.

Knowing clearly what the terms like net zero, decarbonisation, carbon neutral, and more mean helps all of us properly discuss climate action. 

 

Greenhouse gas emission versus carbon emissions

Much of the confusion caused by climate-related terms can be mitigated when we understand the difference between greenhouse gas emissions and carbon emissions. 

Seven gases comprise greenhouse gases (GHG). Carbon dioxide is the most significant of these greenhouse gases, as it accounts for nearly 79 per cent of the UK’s greenhouse gas emissions

The other six greenhouse gases are methane (CH4), nitrous oxide (N2O), hydrofluorocarbons, perfluorocarbons, sulphur hexafluoride, and nitrogen trifluoride. 

When people say that we must reduce greenhouses, they mean that we must reduce the emission levels of all seven of the greenhouse gases. To reduce all greenhouse gases is a much bigger challenge, and this is why we often focus on reducing carbon dioxide, the most potent and abundant of the greenhouse gases. 

 

Net zero

The Paris Agreement bound participating nations to be net zero by 2050. What does that mean? It means that the balance of the amount of greenhouse gases emitted into our atmosphere and the amount that is removed from it is zero. It is an ambitious target that aims to keep global warming below 2 degrees Celsius by 2050 and which requires nations, organisations, and individuals to greatly reduce carbon emissions. 

Going net zero does not mean that we must emit zero emissions whatsoever. The idea behind net zero is to vastly reduce how much carbon we put into the atmosphere whilst removing emitted carbon and other greenhouse gases from the atmosphere. Ways in which we can remove greenhouse gases from the atmosphere include planting trees or further developing air capture systems. A nation like Bhutan is a good example of how reaching net zero is possible. They capture and remove more greenhouse gases than they produce. 

The UK has one of the most ambitious net zero targets in the world. The UK government wants to slash emissions by 78 per cent (compared to 1990 levels) by 2035. It will include their share of international aviation and shipping emissions in their national Carbon Budget

What does this mean for businesses, and how can a business be a net zero one? According to the Carbon Trust, a net zero company is one that sets and pursues an ambitious 1.5 degree Celsius target for its full value-chain emissions. Remaining emissions that are “hard to decarbonise” can be compensated through certified greenhouse gas removals.

 

Decarbonisation 

Decarbonisation means to lower the intensity of the amount of carbon emissions produced through processes and power sources. This involves decreasing CO2 output per unit of electricity generated. 

While the energy and transportation sectors are the focus of decarbonisation efforts, all businesses can identify ways to reduce their carbon footprint. Transitioning to renewable energy sources is the primary way for all businesses to decarbonise their operations and thus reduce their emissions. Using energy-efficient equipment and machines and cleaner technologies are other ways companies can decarbonise.

 

Sustainability

Sustainability refers to the capacity for civilisation to meet its present needs without compromising the ability of future generations to meet their own needs. 

Fossil fuels are finite – or not renewable – and their byproducts cause harm to our atmosphere. Considering this, we ought to use these resources conservatively and wisely so that future generations will have them and that the use of them does not inflict harm to our environment. This is why the transition to renewable resources such as wind, solar, and biomass and the development of renewable technologies is so important. These cleaner resources can help meet our energy needs without jeopardising the health of our planet. 

 

Gross zero

Gross zero is often confused with net zero. Whereas net zero targets means having some carbon emissions in processes and supply chains is permitted (as long the amount of carbon removed from the atmosphere balances the scale), gross zero targets are ones where all emissions are zero – not a single gram of carbon dioxide would be produced. 

Emissions are unavoidable. That is why net zero targets are focussed on: they are attainable and realistic. The combination of decarbonising our economies and technologies and removing emitted carbon dioxide from the atmosphere will help us reach our net zero targets. 

 

Carbon neutral

Carbon neutral means that the amount of carbon dioxide emitted into the atmosphere from a company’s activities is balanced by the same amount of carbon dioxide removed, also known as carbon offsetting. 

The key difference between carbon neutrality and net zero is that carbon neutrality deals strictly with carbon emissions, whereas to be net zero means that the net emissions of all greenhouse gases is zero. 

 

Carbon positive and carbon negative

These two terms are used in the same way, primarily by marketing teams. Thus, you will not find these terms used much, if at all, in any scientific documents or policy statements on climate change. 

Carbon positive and carbon negative are used to describe activity that goes beyond achieving net zero carbon emissions by removing additional carbon dioxide from the atmosphere. The former may sound counterintuitive, in that it refers to numerically positive amounts of carbon in our environment. Both terms are used to describe the net removal of carbon dioxide.

 

Carbon offsetting

Carbon offsetting allows companies to invest in environmental projects in order to offset the amount of carbon that they generate. For example, a company can invest in a carbon reduction project such as reforestation or afforestation or in a renewable energy site somewhere in the world to make up for the carbon that they will produce.

Carbon offsets are measured in metric tonnes of carbon dioxide equivalent (CO2e). This means that one tonne of purchased CO2e is one less tonne of carbon produced in the atmosphere. Carbon offsetting plays a role in reducing carbon emissions, especially if you are just starting out on your sustainability journey. 

A common carbon offsetting practice is to purchase Power Purchase Agreements (PPAs). These are long-term supply contracts between a seller and buyer where the seller, often an independent renewable power generator, generates renewable energy for the buyer to purchase. These kinds of contracts help fulfil net zero goals as they support the funding of new renewable energy solutions.

 

Why should I take urgent action on carbon reduction?

We have known for some time that we need to act now and drastically if we want to reverse climate change. The 2021 IPPC (Intergovernmental Panel on Climate Change) assessment report confirmed this urgency, stating that the current track we are on will not help us reach our net zero goals. Additionally, the energy crisis in the UK, Europe, and in many other parts of the globe highlight the need for us to transition away from fossil fuels much sooner than originally planned.

Businesses should take their first step towards net zero now, no matter how small that first step may be. The carbon budgets and carbon reduction targets are designed to be incrementally achievable, so delaying the process will make it more difficult for businesses to achieve future carbon reduction targets. Plus, businesses may miss out on possible savings and investment opportunities.  

                                — Read why you must reveal your sustainability credentials

 

How can my business take action now?

Tackling the climate issue as a business does not always require one drastic step. It can be approached by several smaller, more manageable ones.

One way your business can start to make a difference towards carbon reduction is to switch to green business energy. We can help you find a green business energy contract that will suit your power needs. 

If you are a business who is not quite sure how to approach net zero, it can be very helpful to look towards others in your same sector and see how they are tackling the issue. Individual sectors are increasingly publishing plans to reach net zero that make sense for their industry.For example, the UK Green Building Council leads businesses in the building and construction sector to work together on net zero actions. Water companies can look to Water UK’s Net Zero 2030 plan for guidance and resources, and the food and beverage sector has the net zero plan put forth by the Food and Drink Federation. These are just a few examples to be found and followed.

All businesses can take a look at their current energy profile and usage patterns and discover ways to make them more efficient. Energy audits can uncover areas of energy waste and identify opportunities for sustainable solutions. 

Not every company has engineers or energy experts on staff. However, they can work with energy consultants and managers to help them manage their business energy. A part-time energy manager, for example, comes to your business site and undertakes energy audits, prepares consumption plans, creates technical feasibility reports, assists with energy budgeting, and much more for your business. 

Electric vehicles (EVs) are a major component to the UK’s 2050 net zero targets. Adding EV charging stations on site boosts the public appeal of low to zero carbon emitting cars. In return, businesses get increased footfall, enhanced corporate reputation, and new revenue streams.   

 

The tools to decarbonise are more accessible than ever

Sustainable energy solutions and technologies become more accessible everyday thanks to innovations in technology and the wider awareness of climate issues. These help us set achievable net zero goals

Some quick and easy carbon reduction measures you can take now can include educating your workforce to use energy smartly and more efficiently. Energy training and awareness programmes help us all find ways to use energy in a better way. 

Simple steps to cut business energy costs help, too. The little things like powering down unused equipment, installing energy efficient light bulbs, heating and cooling rooms conservatively, and more all add up to big reductions in energy waste, carbon emissions, and costs. 

Advanced distributed energy technologies such as solar and heat pumps are now more accessible and affordable and they offer positive financial returns down the road. Flexible financing options and access to government grants such as the Salix Energy Efficiency Fund and the Industrial Energy Transformation Fund are available. 

There are many government grants and subsidies that support businesses who adopt green initiatives. Businesses can be incentivised by the UK government to electrify their transportation.

Cloud technologies, AI, and big data are transforming the way businesses monitor and manage their own energy portfolio. Energy management software and hardware solutions give businesses live and granular-level information on their energy consumption, enabling them to  quickly make important decisions towards decarbonisation and energy cost savings. 

 

Take your next step towards net zero

We can provide your business with the services, support, and expertise you need to decarbonise your operations so you can reach your commercial and sustainability goals.

Northern Gas and Power has a full team of professional assessors ready to help you analyse where, when, why, and how energy is used in your process, building, site, or organisation. We can help you identify opportunities to reduce consumption, cost, emissions, and eliminate waste.

Discover more about our services on our website, or give us a call at +44 (0)3 300 300 800 to speak with us directly.

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