The Push for Net-Zero Emissions -- Corporate Reality or Fantasy? How Apple is Leading the Charge

The climate crisis is one of the greatest long-term challenges facing the global community in the status quo. Ramifications of climate change are worryingly ubiquitous; fires rage out of control in California and Australia, the most severe droughts and heatwaves in 2000 years plague Europe^[1], and sea-adjacent communities are besieged by an unyielding increase in sea levels and flooding frequency. To address climate change effectively, an extensive and urgent global response is required.

The current corporate push for net-zero carbon emissions may be one crucial portion of the climate solution. To date, 1,397 businesses have signed on to the United Nations Race to Zero Campaign (UNRZC), an initiative where signatories pledge to achieve net-zero carbon emissions by 2050 at the latest.^[2] An ambitious yet necessary promise, the UNRZC leads the world in the net-zero emissions effort.

Achieving net-zero is undoubtedly an admirable goal. However, this goal might also be labeled as corporate fantasy because of its difficulty; concepts and techniques behind the push for net-zero are often complicated, unclear, and occasionally untested. To effectively guide companies through the entire net-zero process, three key questions must be answered:

1. What is Net-Zero?
2. Why Net-Zero?
3. How do we reach Net-Zero?

What is Net-Zero?

Net-zero carbon emissions is when a company no longer releases carbon emissions, either through elimination or offset methods. To understand how to reach this goal, a company first must identify how they contribute to carbon emissions in the status quo. Typically, a company’s carbon emissions are split into three scopes^[3]:

Scope 1 - Production: Emissions from on-site facility operation, such a fuel combustion.

Scope 2 - Energy Sourcing: Emissions from usage of electricity, steam, heat, and/or cooling -- purchased from outside, third party sources.

Scope 3 - Supply Chain: Emissions covered in the supply chain procurement process, as well as emissions from product transportation, use, and eventual disposal.

To achieve true net-zero carbon emissions, all three scopes of carbon emissions must be reduced to zero. This poses a great challenge for any company in any industry wishing to successfully decarbonize -- finding methods to eliminate all emissions in production, energy sourcing, and supply chain are certainly costly and time consuming investments. To make things more difficult, there’s no easy decarbonization formula that every company can follow. Rather, each industry and company has unique needs, and thus, varying proportional distributions of each scope of emissions.

In the figure above, the cement industry has greater than 90% of their carbon emissions tied up in production (Scope 1) and only 6% in supply chain (Scope 3). The fashion industry is the opposite, with very little carbon emission in production (Scope 1) but 85% tied up in their supply chain (Scope 3). As a result, the cement industry strategy for net-zero would likely be vastly different from the fashion industry strategy; because of this variation, companies must actively search for methods that best fit their unique net-zero needs.^[4]

Why Net-Zero?

Since decarbonization efforts have proven to be complicated and troublesome investments, why should companies buy into the net-zero initiative? The answer is two-fold:

First, by embracing the net-zero initiative, corporations are recognizing their ethical responsibility and impact when it comes to social issues like the environment. While taking proper ethical responsibility may require some degree of corporate revenue sacrifice, environmental change is necessary to mitigate the harms perpetuated by corporate carbon emissions. Without change, climate change will continue to worsen and wreak havoc on global communities.

Admittedly, counting on capitalist-centered corporations to sacrifice revenue to make the correct ethical choice is not the most reliable or compelling reason to buy into the net-zero initiative. Nevertheless, there is a much more persuasive line of reasoning: companies should pursue CSR strategies in an effort to adapt to the wants of the new generation of environmentally aware consumers.

Statistics from a 2017 survey on customer preferences found that supporting social and environmental issues yields a major competitive advantage for one’s business. Specifically, upwards of 87 percent of consumers will have a positive company perception, be brand loyal, and be willing to buy products by trusting a company that supports CSR initiatives.^[5] Moreover, the push for environmentalism does not originate solely from people of younger generations. Rather, survey results find that 65 to 85 percent of each consumer generation believe that companies should implement environmental programs -- the majority of modern day consumers view their purchases with an environmentally conscious lens.^[6] With this shift in consumer preferences, companies should scramble to promote a new brand image of sustainability by investing in CSR projects. With consumer preferences contextualized, troublesome net-zero efforts now seem like an excellent investment.

How Do We Reach Net-Zero? A Closer Look at Apple’s Methodology

With both the “What?” and “Why?” established in regards to the Net-Zero Campaign, the last important piece of the puzzle remains: “How?” As aforementioned, there is no easy, formulaic answer that every company can follow. However, key insights from three of Apple’s recent environmental activities can provide examples of excellent potential investments and decarbonization activities that other companies may use to reach the net-zero carbon emissions goal.

1. Apple’s China Clean Energy Fund

A massive fund started in 2018, Apple’s China Clean Energy Fund is a commitment among Apple and its suppliers to invest into Chinese-based renewable energy projects.^[7] As of current day, this project has funded three Chinese wind turbine farms that produce a collective 134 Megawatts to China’s National Power Grid. By 2022, the end project goal is to produce 1 gigawatt of renewable energy -- helping cut emissions in all three scopes.  

Apple’s investment into such a project should serve as an inspiration to other companies around the world. While replicating Apple’s investment magnitude is a tall order, other companies should look to similarly reduce their carbon emissions by investing in renewable energy projects; wind turbines, hydroelectric dams^[8], and other forms of renewable energy production are all excellent choices.  

2.   Apple’s Supplier Clean Energy Program

To target Apple’s suppliers in their Scope 3 emissions, Apple launched the Supplier Clean Energy Program in 2015 with the intention of creating a 100% renewable energy supply chain process by 2030.^[9] Most importantly, Apple asks their suppliers to commit to 100% renewable energy production and helps them find renewable energy solutions available for investment. Establishing a desire for renewable production and further collaborating to find viable investments can most certainly be replicated in other companies worldwide. For smaller companies unsure where to start, advisory exists in many environmental consultancy organizations, like Apala Group.

3.   Apple’s Atmospheric Carbon Removal

Natural carbon removal is a simple yet effective method to achieve net-zero carbon emissions. Apple invests in restoring forests, wetlands, and grasslands -- from the Columbian Mangroves to the Kenyan Savannas -- to naturally remove carbon in the atmosphere.^[10] This solution is one of the most readily accessible for any eager organization -- investing in forest planting projects is a simple way to offset current emissions and reach the end goal of net-zero.

Future Outlook

Unfortunately, the climate crisis will only continue to grow in intensity if left unchecked. Without sufficient global action today, the uncommon natural disasters of the present will become the new normal of the future. As such, the corporate push for Net-Zero carbon emissions has never been more significant; it is crucial that companies understand the implications of net-zero, its importance, and how organizations can follow Apple’s example to successfully decarbonize. It is key that the global community remembers: despite its difficulty, Net-Zero is no corporate fantasy -- it is achievable, realistic, and world-saving.

Sources:

^[1] Carrington, Damian. "Climate Crisis: Recent European Droughts 'worst in 2,000 Years'." The Guardian. March 15, 2021. Accessed March 17, 2021. https://www.theguardian.com/environment/2021/mar/15/climate-crisis-recent-european-droughts-worst-in-2000-years.

^[2] "Race To Zero Campaign." Unfccc.int. Accessed March 17, 2021. https://unfccc.int/climate-action/race-to-zero-campaign.

^[3] "Net-Zero Challenge: The Supply Chain Opportunity." January 2021. Accessed March 17, 2021.

^[4] "Net-Zero Challenge: The Supply Chain Opportunity." January 2021. Accessed March 17, 2021.

^[5] Butler, Adam. "Council Post: Do Customers Really Care About Your Environmental Impact?" Forbes. November 21, 2018. Accessed March 17, 2021. https://www.forbes.com/sites/forbesnycouncil/2018/11/21/do-customers-really-care-about-your-environmental-impact/?sh=3ea3af84240d.

^[6] "Global Consumers Seek Companies That Care About Environmental Issues." Nielsen. September 11, 2018. Accessed March 17, 2021. https://www.nielsen.com/us/en/insights/article/2018/global-consumers-seek-companies-that-care-about-environmental-issues/.

^[7] "Apple-launched China Clean Energy Fund Invests in Three Wind Farms." Apple Newsroom. March 12, 2021. Accessed March 17, 2021. https://www.apple.com/newsroom/2019/09/apple-launched-china-clean-energy-fund-invests-in-three-wind-farms/.

^[8] "Benefits of Hydropower." Energy.gov. Accessed March 17, 2021. https://www.energy.gov/eere/water/benefits-hydropower.

^[9] "Supplier Clean Energy 2020 Program Update." Accessed March 17, 2021.

^[10] "Environment." Apple. Accessed March 17, 2021. https://www.apple.com/environment/.