Four Myths About Becoming a Net Zero Business

Business leaders have been grappling with climate change for more than a generation now. But a new report from Accenture, "Shaping the Sustainable Organization," reveals that 58% of executives believe operating more sustainably involves a trade-off with growth. That's why we're breaking down commonly rattled-off maxims and revealing the real things organizations can do to be more sustainable, without compromising the bottom line.

Myth #1 - Shareholders are the key to achieving net zero

While there is no doubt that shareholders are putting immense pressure on corporations to take favorable action toward decarbonization and net-zero emissions, the heat is coming with equal fervor from employees.

"Employees are seeking more action," said Farshad Family, managing director at Accenture. "If you want to be a great place to work, continue to attract and retain talent, and bring in the skills you need to be successful - I would say this is true regardless of industry - this topic is increasingly important."

More than two-thirds of people said they are more likely to apply for and accept jobs with environmentally and socially responsible organizations, according to a 2021 survey from the IBM Institute for Business Value. Nearly half surveyed would accept a lower salary to work for environmentally sustainable organizations.

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But being sustainable in name only is not going to cut it when the competition for talent is greater than it's been in years. You have to offer tangible green bona fides to attract and retain your team.

"Do your employees have a 401(k) that folds in sustainability, for example, a sort of impact investment?" asked Yacov Wrocherinsky, president and CEO of Orion Global Solutions, a business and digital transformation advisory firm. "Culture eats strategy for breakfast, so the key is creating a sustainable culture that includes everyone and inspires action."

Enabling benefits like sustainable 401(k) packages, energy-efficient transportation incentives for employees who commute, and home-energy assessment subsidies for those who work remotely will help make your sustainability mission a reality and inspire people to join the effort.

"You need to find activists within your own company - mini groups, teams, champions who have superpowers to influence within your organization - to help you lock in your sustainability mission and not stop," Wrocherinsky says.

Once you find those activists, make sure you empower them with resources and support to enact that mission. Don't make them go it alone.

Myth #2 - Going for net zero will only make things more expensive for your customers

Net zero is a promising yet daunting goal for many organizations that will require investment to achieve. But it's one that will pay off. Not only will the climate improve, so will customer loyalty.

More than half of consumers say that sustainability is very or extremely important to them when choosing a brand - 22% more than before the coronavirus pandemic, according to the IBM survey. Additionally, nearly two-thirds of consumers plan to make more sustainable or ethical purchases over the next six months, according to Accenture.

"Customers will demand you do something about it," Wrocherinsky said. "If they have a choice between this and that, between A and B, they'll pay even more if you're compliant and sustainable."

Scaling technology will help keep the cost of net-zero products off the shoulders of the end consumer. Over the past decade, we've seen the cost of renewable energy tech like electric vehicle batteries and LED lighting come down significantly.

"For it to be better carbon-wise, it's not necessarily true that it's more expensive, particularly as some of these products and services start to get more scale," Family said. "Once you attract enough consumers and you start to get scale, then that allows you to go down the cost curve and start to offer the same goods and services to a broader set of consumers, not just those who are willing to pay the environmental premium."

Myth #3 - You need a top-down approach to solve your carbon problem

Most companies believe their social responsibility teams or their well-staffed sustainability teams need to address their carbon footprint issues. There's no doubt that a centralized team can help you piece together a snapshot of your carbon footprint. But reducing that footprint requires operational knowledge, from the front lines all the way down to the product level.

"You need, first of all, to embed sustainability thinking in your everyday processes and everyday workflow and everyday business operations," Family said. "That requires data and insights and analytics at a much more granular level - at the product level, at the SKU level, at the service level - so operational managers, the front-line decision makers, have carbon data almost side by side with financial data."

The real magic in decarbonization doesn't happen with big pronouncements about the company's mission; it happens by making small decisions about each product and how you source each component. Employees closest to the product can tinker with specifications or suppliers to, cumulatively, reduce the carbon footprint significantly across the product line.

"Without that kind of granular data, it's hard to make those decisions," Family said.

Thankfully, many employees are enthusiastic, with 63% saying they want to learn more green skills to add value in the workplace, according to a 2020 survey from Reuters and Censuswide.

Myth #4 - Decarbonization is simple

It's not simply lack of will that's keeping companies from hitting net zero. Decarbonization remains a very challenging and expensive process, in particular because it requires a whole lot of data spread out across the entire enterprise, time-consuming manual processes to bring all that data together, and advanced analytics technology to make sense of it.

Smaller businesses might look to global sustainability leaders, who have "the money, time, and resources to keep updating their formulas, updating their dashboards, and revising scope plans," according to Wrocherinsky, and feel immediately discouraged.

But organizations should think of decarbonization as an ongoing process rather than an ultimate end goal that requires millions of dollars and world-class resources.

Based on its research, McKinsey estimates that if the climate technologies we already have are deployed widely, they would deliver about 60% of the emissions reductions necessary to stabilize the climate in the next 30 years. A combination of government support and guidelines, business commitments, and technological innovation can make that happen.

"It's all very doable, and there's already a lot of science and technology behind it," Family said, citing ​​Salesforce Net Zero Cloud as an example. "But you just need to go do it and dedicate some resources to it and make it a priority."

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