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July 2, 2020

How can SMEs lead the charge to carbon neutrality?

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Carl Prins

SMEs have all the knowledge, technology, and tools to solve our climate crisis now and are best placed to help lead the charge to carbon neutrality.

There is reason to be hopeful in the fight against climate change. We have all the knowledge, technology and tools available now to solve the climate crisis.

SMEs can be the key to solving the climate crises

Although our individual climate actions alone can sometimes feel pointless, it is only through collective action that we can generate change at the speed required to address the issue. But what actually is the issue?

The physical effects are showing

Already in Australia we are seeing the effects of climate change:

  • Bushfires - devastating bushfires that went on for months over 2019 into early 2020.
  • Hotter days and drought – 2019 was a year of terrifying records - Australia’s hottest and driest year on record, Australia’s hottest month on record and the two hottest days on record. 
  • Rising sea levels – warmer temperatures are resulting in ocean expansion which causes sea level rise. This threatens low lying islands and coastal city homes.
  • Extreme weather events -  more frequent extreme weather events like cyclones and flash floods.

This damages ecosystems and species, water and farming, as well as causing structural damage to homes and creating a raft of health problems. 

What are the best ways for businesses to address climate change?

Markets are moving

The world agrees – global carbon emissions must halve by 2030

  • Temperature: we are now at 1.1°C increase in global temperatures. This results in a sea-level rise of about one-eighth of an inch per year, which will continue to increase. Higher sea levels mean more frequent and destructive storm surges and floods. The most recent special report from the IPCC (the peak body of global climate scientists) says that we can expect oceans to rise between 26-77cm by 2100 with temperatures warming 1.5 °C. This would seriously affect many coastal cities. 
  • Global agreement: The Paris Climate Agreement outlines we must keep global temperatures below a 1.5°C increase to avoid catastrophic and irreversible climatic shocks. 
  • Scientist view: The IPCC Report explains that it is still possible to limit temperatures to below 1.5°C, but that ‘unprecedented action’ is required to achieve this. The report states that we need to reduce global carbon emissions by 45% over the next 10 years to hit zero emissions by 2050.

Are we in a ‘climate emergency’?

  • Individuals: Most Australians now agree that Australia is facing a climate emergency.
  • Governments: 1,731 jurisdictions in 30 countries have declared a climate emergency. 85 councils in Australia have declared a climate emergency, including the cities of Melbourne, Sydney, Adelaide and Hobart.
  • Professional groups and bodies: A growing number of professional groups in Australia are declaring a climate emergency, including: Lawyers (Law Council of Australia and its constituent bodies), Engineers, Architects and Social Workers

Investors and climate action groups are spurring change

We are seeing powerful investor and action groups demand change:

  • Climate Action 100+ - an investor initiative (with more than US$41 trillion in assets under management) to ensure the world's largest corporate emitters take necessary action on climate change.
  • The Science Based Targets initiative (SBTi) - an initiative encouraging companies to set greenhouse gas reduction targets consistent with the need to limit warming to less than 1.5ºC.
  • RE100 - a global corporate initiative bringing together businesses committed to 100% renewable energy to accelerate zero carbon grids.
  • BlackRock - the world's largest asset management firm (with nearly $7 trillion in investments) announced in 2020 that it will put environmental sustainability at the heart of its investment strategy. This puts pressure on other money managers to follow suit.

Commitment to a new norm – net zero well before 2050


All Australian states and territory governments have now committed to net zero by 2050. 

Similarly, according to the United Nations, more than 60 countries are aiming for carbon neutrality by 2050.

Countries’ adopted net-zero targets

Countries’ adopted net-zero targets


Businesses are steering the ship

As national governments around the world continue to grapple with climate policy, businesses are taking matters into their own hands. 

Facing pressure from customers, investors and employees alike, corporates are committing to carbon neutrality and driving the transition to a net zero emissions economy.

Big players with a plan

  • Delta – going “fully carbon neutral” by 1 March 2020. In Australia, Qantas has pledged to cap net emissions at 2020 levels and achieve net zero emissions by 2050.  
  • Bosche – making emissions in their ‘direct sphere of influence’ carbon neutral worldwide by 2020. 
  • Microsoft – wants to be carbon “negative” by 2030, and to capture all of the carbon it has directly caused since it began (in 1975) by 2050. 
  • Amazon – faced a shareholder resolution and received a letter signed by over 7,600 employees demanding the company step up its action on climate change. It has now committed to use 100% renewable energy by 2030 and achieve carbon neutrality by 2040.
  • Fossil fuel giants – even oil and gas giants like BP and Shell have announced targets of net zero by 2050.

Can SMEs make a difference?

While large corporates make a splash in the papers, all companies are feeling the pressure to plan a more sustainable future.  

SMEs make more of an impact than you think

Although the action of one small or medium-sized company alone is of course not enough to curb the climate crisis, the obligation to act strengthens when you consider that:

  • 99%, of Australian enterprises are SMEs (Department of The Treasury)
  • 70% of Australia’s workforce belong to SMEs (Reserve Bank of Australia)
  • SMEs contribute significantly to innovation and trendsetting, creating pressure for competitors, suppliers and businesses in other industries to take meaningful climate action.

The ripple effect

By taking climate action you can create a ripple effect of positive change among employees, suppliers, clients and the community.

So, what can you do? 

Measure, reduce, offset

You can act now by understanding your carbon footprint with our carbon emission calculator. Once you have measured and understand your impact on the environment, you can work towards carbon neutrality – a status achieved when the carbon emissions you produce are equal to the carbon offsets you have purchased. 

Read our article here ‘How do I achieve a carbon neutral certificate

You can get a carbon neutral certification in 5 minutes with Pathzero. Pathzero helps you quickly understand your company's carbon footprint, set a path to carbon neutrality and share your climate commitment with confidence. Click here to get started.  

Benefits of going carbon neutral

Increase revenue

Studies show that consumers and clients are actively choosing businesses that are building a better world and share their moral values. 

The path to carbon neutrality offers a unique storytelling opportunity for your company. Pathzero can help you to meaningfully communicate your climate action to the market and clients. 

Engage staff

Climate action can position your company as an industry leader and can kick-start profound conversations and enthusiasm within your organisation. 

Staff attraction, retention and motivation are all linked to positive climate action.

Reduce costs 

The carbon neutral process requires companies to consider their emission reduction strategy. This can provide longer-term cost savings by prompting reduction actions, such as the introduction of policies which reduce business travel or improve energy savings. 

Focusing on climate change now may also help your business to preempt regulatory changes and other business risks, including a tax on carbon. 

Your path to net zero

Globally, we have a lot to do to achieve the Paris Agreement’s target of keeping global warming to well below 2°C. 

Companies in Australia have a collective responsibility to take a long-term view and invest now to create a more sustainable future. Our environment, economy and people depend on it. Offset your carbon emissions and get a carbon neutral certification with Pathzero today. 

Click here to learn more about going carbon neutral and how Pathzero can help.


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