CEOs find measuring emissions in supply chain complicated

If CEOs do not have a net-zero target, the reason they give is that they are not major emitters of greenhouse gases. The complexity of measuring emissions also plays a major role. If CEOs do have an objective to reduce their own emissions and those of their supply chain as much as possible, it is partly because customers and employees expect them to do so. 

PwC's 25th CEO Survey reveals that large companies are more likely to aim for net zero than the smaller ones. We see the same difference between listed and unlisted companies. This difference probably has to do with both the public pressure on listed companies and the knowledge about measuring emissions that these organisations possess.

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'Just start and gain experience'

Renate de Lange, responsible for corporate sustainability in the board of PwC: 'If we want to meet the Paris climate targets, net zero policies are very important. That's not always easy, but don't be afraid to just start and gain experience.'

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Jan Willem goes 'net zero'

With his family, PwC's chief economist Jan Willem Velthuijsen is trying to live 'net zero'. He is doing this in response to PwC's 25th CEO Survey. In it, CEOs say they would be happy to set a 'net zero' target, but that recording their company's CO2 emissions is quite complicated.

Process to net zero is complex

PwC expert Karin Meijer acknowledges that the process towards net zero is complex. ‘Striving for net zero not only means reducing the emissions that you can influence yourself, but also the emissions that you cause at suppliers, sales points or the emissions coming from products that you bring into the value chain. If a car manufacturer wants to become net zero, it must ensure that the cars that are sold also start emitting less and less and ultimately become emission-free.'

Lots of data needed to determine exact CO2 emissions

The beginning is especially difficult, according to Karin Meijer, because a first step to net-zero is defining what exactly an organisation emits. Organisations need to gather a lot of data for this. ‘For example, not only do you need to know how many cars you have, but also which brand and which type emits what. Moreover, you have to find out what the production of that car has cost in terms of CO2.'

‘Other examples: those who use data centers must determine how much CO2 is emitted into the air by your use of server space. Anyone who operates internationally has a huge job just measuring the energy consumption in offices and production sites in all the countries. Once the emissions have been calculated, it becomes easier: then you can see the buttons you can press to reduce emissions.’

Read the blog of Karin Meijer

Net zero because employees and customers care

The reason CEOs commit to net zero is because of a desire to mitigate climate risks. Almost as important to CEOs are the opinions of their employees and customers. The expectations of these stakeholder groups are an important driver behind Dutch CEOs setting ambitious climate goals, especially if we compare their answers to those of their colleagues worldwide. 

This is also the case for organisations that do not strive for net zero: this is not because their stakeholders do not consider it important, but rather due to aspects such as the complexity of measuring emissions in the chain. 

It is crucial that organisations include their employees in their climate ambitions. That's not just a matter of finding technical solutions, but also a matter of change management and behavioral change.

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Karin Meijer

Karin Meijer

Partner, PwC Netherlands

Tel: +31 (0)62 030 39 90

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