Implementing greenhouse gas neutrality in companies

The successful transformation to greenhouse gas neutrality is one of the biggest challenges that companies face today. In this article, we explain the key terms and action steps that companies should know to achieve climate neutrality.

Political climate goals and definition of terms

Distinction between climate neutrality, greenhouse gas neutrality and carbon neutrality

When discussing climate protection measures, the terms climate neutrality, greenhouse gas neutrality and carbon neutrality are often used interchangeably, although they describe different concepts. Climate neutrality means that all greenhouse gas emissions are brought to zero and all negative environmental effects of an organization are avoided, while greenhouse gas neutrality specifically means greenhouse gases. Carbon-neutrality, on the other hand, relates exclusively to emissions caused by carbon dioxide. This distinction is important in order to correctly define and communicate the goals and measures.

Overview of international, European, national and regional climate policy

The political framework and goals at various levels provide the context for companies' climate strategies. The World Climate Agreement aims to limit global warming to well below two degrees celsius. The EU aims to reduce net emissions to zero by 2050 and to reduce emissions by 55 percent by 2030 compared to 1990. Germany plans to become greenhouse gas neutral by 2045 and to reduce emissions by 65 percent by 2030.

How greenhouse gas neutrality can be implemented in companies

1. Determining the Corporate Carbon Footprint

A key step on the road to greenhouse gas neutrality is the determination of a Corporate Carbon Footprint (CCF). This forms the basis for developing a well-founded climate strategy. In doing so, Emissions accounted for in three categories: direct emissions (Scope 1), indirect emissions from energy consumption (Scope 2) and emissions along the value chain, both upstream and downstream (Scope 3). Companies must collect and analyze precise data in order to identify emission sources and thus be able to initiate targeted measures to reduce them. This is the only way to implement an effective and sustainable climate strategy.

2. Defining climate goals and mitigation paths

Based on the calculated corporate carbon footprint, companies should set realistic and ambitious climate goals. These goals should be based on political guidelines and internal company strategies. A clearly defined reduction path shows which measures should be implemented in which periods of time in order to achieve goals. In particular, this promotes transparency and commitment within the company and towards external stakeholders. Many companies have their climate goals and mitigation paths (Climate Transition Plans) validated by the Science-Based Targets Initiative (SBTi).

3. Plan measures to prevent, reduce and offset greenhouse gas emissions

Companies must develop and implement concrete measures to prevent and reduce greenhouse gas emissions. This includes improving energy efficiency, using renewable energy and optimising production processes. For unavoidable emissions, technologies for carbon capture or compensation through certified climate protection projects are options that are being discussed but considered necessary to achieve net zero. According to SBTi and ISO 14068 for GHG neutrality, it is recommended to use contribution claims rather than compensation. With offsets, it is important to ensure the durability and additionality of such projects in order to achieve a real climate impact.

4. Climate reporting requirements

Based from the Corporate Sustainability Reporting Directive's (CSRD) ESRS E1, companies are required to report comprehensively and transparently on the transition plan to net zero, their climate protection measures, and achieved successes. Non-reporting companies are also under increasing pressure to communicate climate-related indicators. Careful and regular reporting creates transparency for stakeholders but also cost efficiency and thus competitive advantages.

Specific measures to reduce greenhouse gas emissions

• Energy efficiency and use of renewable energy A key lever for reducing greenhouse gas emissions is reducing energy consumption and increasing energy efficiency. Energy management systems help to identify and realize savings potential. Companies can also significantly reduce their carbon emissions by using renewable energy sources. Self-generation systems, such as solar systems or combined heat and power plants, also offer the opportunity to become more independent of external energy sources.
• Key technologies such as green hydrogen and carbon sequestration Innovative technologies play a central role in decarbonization. Green hydrogen, which is obtained from renewable energy sources, is considered a promising solution for energy-intensive industries and the transport sector. Technologies for capturing and storing carbon (CCS) and using carbon (CCU) make it possible to manage and reduce unavoidable emissions.
• Digitalization and climate-friendly site designDigitalization offers numerous potentials for reducing emissions. By using digital technologies, processes can be optimized, resources used more efficiently and emissions can be reduced. In addition, companies should design their locations in a climate-friendly manner in order to achieve further emissions reductions. This includes the energy-efficient renovation of buildings and the use of sustainable materials.
• Optimizing vehicle fleets and logistics Companies can also achieve significant emissions reductions in the transport and logistics sector. This can be achieved by switching to low-emission or zero-emission vehicles, optimising transport routes and improving the utilization of means of transport. Efficient logistics management also helps to minimize CO₂ emissions.

Challenges and support in implementing sustainability initiatives

Carbon pricing and its effects:

While CO₂ pricing presents companies with challenges on the one hand, it also offers opportunities to reduce emissions. High carbon pricing can serve as an incentive to invest in climate-friendly technologies and processes. Companies must therefore also prepare for rising costs and develop strategies to compensate for them.

Subsidies and funding measures to support climate protection projects: 

There are numerous government funding programs and subsidies that help companies implement their climate protection measures. These range from direct subsidies to low-interest loans and tax breaks. Companies should find out about the funding opportunities available and use them specifically to finance their climate protection projects.

conclusion

Implementing greenhouse gas neutrality is a complex but necessary task for companies. Guidance documents such as that of the Bavarian Industry Association offer assistance in the development and implementation of climate strategies. Here, readers receive practical recommendations for action that help companies reduce their emissions and become greenhouse gas neutral in the long term.

How software solutions create the foundation for greenhouse gas neutrality in your company

With sustainability software such as Tanso, emissions targets for Scope 1, 2 and 3 can be achieved. Automated data collection reduces effort and at the same time ensures audit compliance. This enables accurate and efficient reporting on corporate emissions, which meets the requirements of EU regulations.