Last week, all eyes were on New York for its Annual Climate Week. The event takes place alongside the United Nations General Assembly and is organized in collaboration with both the UN and the City of New York. It is considered a key event leading up to this year’s COP29 to be held at Baku, Azerbaijan. Heads of government, climate leaders, action takers and innovators across the fields of business, government, politics, tech, academia, and civil society will take part in this event to drive the transition forward to achieving climate goals. To kick off the week, UN Secretary General Antonio Guterres unveiled the Pact of the Future, a global digital compact and a declaration on Future Generations focused on the topics of human rights, gender, and sustainable development.  He mentions that the Pact of the Future “is about turbocharging the Sustainable Development Goals and the Paris Agreement, accelerating a just transition away from fossil fuels, and securing a peaceful and livable future for everyone on our planet.”  It should be able to pivot solutions for specific causes such as fossil fuel which has been agreed to become phased out last COP 28 in Dubai.

While UN members have been making their commitments to the Pact, business leaders and organizations have shared their approach to climate action in a series of panel discussions and events to inspire attendees to start their own action plans towards net-zero. Governments play a vital role in addressing carbon emissions, but businesses and industries, as major sources of emissions, are equally crucial to the solution. In the long term, this will also enhance corporate growth, efficiency, and drive cost savings for companies. “Sustainability is no longer just a buzzword, it’s a new competitive advantage. Just as companies had to adapt to digital transformation to survive, they must now embrace sustainability to thrive” as stated by Rachel Delacour, CEO and co-founder of SWEEP and a participant in the event (Forbes, 2024). So, while countries are continuously working on their NDCs and signing off on commitments, how can businesses take part in climate response and achiever their own net-zero strategy? Here are our 5 key steps for businesses coming from takeaways during the live discussions:

1. Define Clear and Measurable Targets for Your Net-Zero Strategy

Before setting targets, businesses must review their baseline carbon footprint across Scopes 1, 2, and 3, along with their operations and value chain. A data-driven approach, supported by various tools, can help identify feasible targets for a net-zero strategy. However, it’s not just defining measuring targets but also making sure that these are being regulated throughout the operations. Nancy Mahon, Chief Sustainability Officer at Estée Lauder Companies (2024), shared that their team collaborates to determine how to meet their goals, while a governmental structure monitors whether they are achieving their targets. Achieving this balance requires aligning carbon reduction goals with profitability to ensure the business remains strong and sustainable.

2. Leverage Technology to Achieve Your Climate Goals

Technology is undoubtedly a powerful tool in driving progress toward achieving climate goals. AI is rapidly advancing, offering numerous applications that track carbon emissions and reductions while enhancing energy efficiency in various processes not just for your business but for climate change mitigation as well. Invest in these mechanisms to help achieve your climate goals. Conversely, if your business involves data mining, which can be energy-intensive, focus on innovating to enhance efficiencies and offset carbon emissions in other areas of your value chain. Blair Swedeen, Meta's Global Head of Net Zero and Sustainability (2024), highlights how the company utilizes AI to reduce emissions. They leverage open-source AI to develop innovative formulations aimed at minimizing the carbon footprint of their data centers while at the same time match their energy consumption with renewable energy on the grid. Meta has also worked with World Resources Institute in developing open-source AI models to measure tree height to validate reforestation initiatives.

3. Integrate Sustainability Across Operations to Final Products

Before adopting technology, we have to be brilliant at the basics to help solve carbon emissions argues Vinay Shandal, Managing Director and Senior Partner at BCG. What are some low-hanging fruits your company can tackle to lower emissions? In the case of Nitesh Banga, President and CEO of Global Logic (2024) it was reviewing options such as converting deliveries from 5 trips to 1 or looking for ways to optimize palletizing stocks. For Estée Lauder Companies, it meant switching transportation of goods from planes to boats.

These types of solutions must be viewed not just in terms of operations but also through to the end product. Take Nike, for example. According to Jaycee Pribulsky, Nike’s Chief Sustainability Officer (2024), Nike sets its ambitions on a zero-carbon and zero-waste future based on three core values: innovation, integration, and scale. Under the umbrella of innovation, raw materials such as second-hand apparel and deadstock fabric are given new life through another apparel line called Nike Recreate. For integration, the focus was on reducing emissions in areas they own and operate, making adjustments such as procuring renewable electricity. In terms of scale, a major volume driver for Nike is the Pegasus 41 running shoe. The end product features a high energy return and a 43% reduced carbon footprint, achieved through a combination of sustainable materials and efficient operations, making it a standout in Nike's sustainability efforts. Consider ways to integrate sustainability across all areas from daily operations and office practices to the final product.

4. Get Stakeholders Engaged

Everyone involved in the business—employees, suppliers, distributors, and even consumers—must take active steps to help achieve the company’s climate goals. As Mahon, Chief Sustainability Officer of Estée Lauder Companies, puts it, you need to "build a climate muscle." This would mean launching trainings with brand leaders, agencies you work with about product sustainability to create that consciousness about achieving climate goals. We also have to consider that consumers are increasingly concerned with the sustainability of the products they buy, and regional variances should be considered when developing communication strategies. European consumers tend to have a higher literacy regarding sustainable product attributes, while in North America, the focus is often on how individuals can reduce their personal carbon footprint. If there is also a way to involve the public sector in your business such as through creating tax breaks or developing infrastructure, the more tangible your climate solutions can be.

5. Monitor, Report, and Adjust Net-Zero Targets

Regularly monitoring your progress should help determine if you are on track to meet your net-zero targets. This comprises of tracking key performance indicators (KPIs) related to emissions reduction, energy efficiency, and resource utilization. With the data available, this can help you make adjustments on your forecasts such as in the case of Asahi. Preeti Srivastav, Group Head of Sustainability at Asahi (2024), mentioned that the company has accelerated its climate targets from 2050 to 2040, guided by science and data. Recognizing the urgency to build momentum now, they raised their ambition, which prompted a recalibration of their strategy and a commitment to pulling out all the stops to meet the 2040 goals. This shift is not only reflected in their mission statement but also embedded in key instruments such as their internal carbon pricing and sustainable EBITDA, among others.

Reporting is essential, as the CSRD in Europe and ESG requirements in other regions are increasingly becoming mandatory for corporations. Rather than viewing reporting as a burden, businesses should see it as a valuable opportunity. Effective reporting enhances competitiveness and increases attractiveness to investors which can position companies for long-term success in a sustainability-focused market. “Having that data ensures you [investors] are working with the right people and investing in the right companies” as cited by Ulrike Decoene, Group Chief Communications, Brand, and Sustainability Officer at AXA. Apart from gaining investors' trust, consumers will continue to support your products and services if your business is transparent about how sustainability measures are implemented.

The steps to achieving net-zero strategy may vary depending on your business operations and scale; however, the key takeaway is that achieving a net-zero strategy requires a lot of data-pulling and a serious commitment to decarbonize your business. It may take years to achieve your climate targets but what’s important is to start planning today.

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