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Top 10 sustainability terms every business leader needs to know

Sustainable development with icons of renewable energy and natural resources preservation with environment protection inside connected gears.businessman hand working with touch screen in action

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Written by Billy Dyer

he drive towards low carbon and sustainable business models is fuelling the latest cycle of invention, evolution and creative destruction that dominates business cycles. Too often businesses struggle to start when it comes to becoming more sustainable. With this article we hope to help you understand some of the jargon you will come across in your path towards sustainability. After all, knowledge is the first step in any journey. 

Net zero vs carbon neutral? 

These terms are very similar. To understand the difference, let’s take a quick look at how emissions are categorized. Green House Gases (GHGs) refer to any gases produced which contribute to global warming. Kyoto and Paris track seven main GHG’s, which are: carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocar- bons, sulphur hexafluoride and nitrogen trifluoride.

Net Zero refers to reaching net zero GHG emissions – the amount you are putting into the atmosphere is less or equal to the amount you remove. Carbon neutral is when you have done as much as you can to cut your own emissions – the key difference with carbon neutral, however, is you then invest in offsets which prevent growth in emissions.

But how can we achieve these reductions? There are two ways: 1) reducing GHG emissions and 2) offsetting GHG emissions, which brings us nicely to the next key phrases. 

Carbon offset vs inset 

Carbon offsetting essentially means taking out CO2 from the atmosphere. You may have heard of carbon capture technology, which is still in its infancy, but nature-based solutions such as are a more developed and effective example. 

Carbon insetting is a new but very powerful technique that companies can use to become more sustainable. Carbon insetting involves reducing your CO2 emissions by re-thinking the way your supply chains and business practices operate. So instead of trying to mitigate your emissions after they’ve been released (offsetting), insetting switches your business structure to make it more climate friendly by causing less emissions in the first place. 

This is particularly exciting, as it applies a far more long-term approach to securing a low-carbon future. Companies relying on offsetting techniques may find that, at least in the short term, it’s a cheaper choice, however the long-term return on investment for insetting cannot be overstated. Insetting is the cutting edge technique in sustainable business practices. 

Scope emissions (1,2,3) 

With this idea of insetting in mind let’s discuss different types (scopes) of emissions we get within businesses.  

Scope 1 emissions can be thought of as direct emissions from company owned and controlled resources, which can be reduced by switching to low-emission technology and decreasing emissions where possible. 

Scope 2 emissions originate from purchased energy, and can be reduced by switching to renewable energy supplies.  

Scope 3 emissions can be harder to pin-point , but they occur indirectly through up and downstream channels of a business – and even perhaps an industry. An example of a scope 3 upstream emission source would be supply chain emissions; a downstream emission source would be product manufacture and use. Scope 3 emissions are pernicious – they can be hard to deal with and often require a holistic approach to sustainability across all aspects of a business. Collaboration between business partners is also essential, as one company’s scope 3 emissions can be another  company’s scope 1 emissions. 

Sustainability

Sustainable development has been defined in many ways, but the most frequently quoted definition is from ‘Our Common Future’, also known as the World Commission on Environment and Development’s 1987 Brundtland Report: “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

This emphasis on futureproofing is similarly at the heart of Contented: we help businesses foster learning environments to make their companies sustainable. To you, sustainability should mean the steps you put in to ensure your business will survive external change, with the goal being that sustainable decisions are a natural choice, rather than a forced procedure. 

Science-based Targets 

With industry giants like Network Rail encouraging their supply chain to commit to science-based targets, it could only be a short time until we see similar measures mandated by government.  

Science-based targets, otherwise known as SBTs, are a set of short- and long-term goals a company can use to reduce emissions. The targets are deemed science-based if they follow the Paris Agreement goals, which focusses on limiting global warming to below 2°C above pre-industrial levels and aiming to decrease warming to 1.5°C. 

In order to encourage SMEs, who may lack the resources to set and monitor targets, to join the initiative, SMEs should instead focus on their scope 1 and 2 emissions, while still committing to reducing their scope 3 emissions. The Science Based Targets initiative, which supports the private sector in establishing SBT’s for their businesses, is currently working with over 1,000 companies across the world.  

ISO4001 

ISO4001 (sometimes known as ISO 14001 or ISO 14001:2015) is the International Standard for Environmental Management Systems. It aims to minimise how business operations negatively affect the environment, including helping companies to control their environmental aspects, reduce impacts and ensure legal compliance. It also provides control for an organisation’s activities, products or services and how they interact with the environment. The benefits of this for your company? It can increase the long-term viability of the organisation and set a higher regard for its asset value, as well as demonstrate strong leadership skills on your behalf.

LCA 

A life cycle analysis is the act of measuring the environmental impact of a product or service throughout its life cycle – starting from the resources used to create the product or service, to its use by the user, and finally to it’s end of life destination. An LCA measures the environmental impacts of each distinct part involved in creating and using products and services, such as energy used in production, fuel used in transport, and end-of-life ecological costs. This helps us compare between products, materials, and methods used, providing useful information by which to make decisions that could help the environment.

ISO14040 

ISO 14040, otherwise known as ISO 14040:2006, describes the principles and framework for life cycle assessment. This includes the definition of the goal and scope of the LCA, an analysis of the life cycle inventory, an assessment of the life cycle impact assessment, the life cycle interpretation phase, reporting and critical review of the LCA, potential limitations, and how the different phases work together.

PAS2060 

PAS 2060 is a globally recognised standard used to verify carbon neutrality. It presents four key stages to achieve carbon neutrality — measurement, reduction, offsetting and documentation -, which can be verified afterwards by the NQA. Achieving such a certificate is crucial in susbtantiating any claims you may make regarding your business’ sustainability.

However, it’s important to remember that you cannot receive PAS 2060 through carbon offsetting alone: certain criteria include measuring your GHG emissions and putting in place a specific carbon reduction plan. Standards set out what you need to do; you still must complete the work. 

CDP 

The Carbon Disclosure Project (CDP) is a not-for-profit charity that leads the largest international carbon disclosure system. Anyone can seek support from the CDP – ranging from private companies to city councils – to measure their risks and manage their environmental impacts.

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