The Corporate Race to Net Zero

The race to net zero—the eradication of carbon footprint—must not be seen as a competition but as an all-for-one agenda to benefit humanity.

With only 25 years left to fulfill an ambitious yet necessary goal, one of the questions worth asking is: are organizations and businesses ready to commit and fulfill their promises in time, or will it simply be business-as-usual?

What is ‘Net zero’?

Simply put, net zero emissions refer to balancing the amount of greenhouse gases emitted into the atmosphere with the amount removed through carbon sequestration. The concept of net zero is crucial because, at this point—specifically for carbon dioxide—global warming ceases to increase. The Paris Agreement emphasizes the necessity of reaching net zero, mandating that countries must “establish a balance between human-caused emissions from sources and the removal of greenhouse gases through sinks during the latter half of this century.”

The science is clear: global carbon dioxide emissions must be slashed by nearly half by 2030, and we must reach net-zero emissions by 2050 to limit global warming to 1.5°C above pre-industrial levels. The Net-Zero Coalition, supported by the United Nations, emphasizes that relying solely on offsets without deep decarbonization of business practices will not be enough. In short, net zero cannot be a mere accounting trick—it requires a fundamental transformation.

Implementing the Net Zero Agenda

The net zero agenda was not only driven by the escalating climate crisis but also by economic pressures, societal expectations, and shifting regulatory requirements. However, beyond mere compliance, this agenda must be taken seriously and urgently: the impact of climate change on our everyday lives is no longer a hypothetical threat but an observable reality due to the frequency and severity of natural disasters that we experience every year. From global warming, melting ice caps, and rising sea levels as direct consequences from one to the other, the consequences are catastrophic for both natural ecosystems and human societies.

In recent years, several multinational corporations have set ambitious net-zero targets. Tech giants, fashion brands, energy companies, and banks have all jumped onto the trend of sustainability, promising to decarbonize their operations. Governments have supported these efforts through legislative frameworks, such as carbon pricing and stricter emissions regulations, creating an environment where sustainability is not just an option but a necessity.

The strategic rationale for net zero is compelling: companies are increasingly recognizing that climate risks are financial risks. Disruption from extreme weather events, resource scarcity, and shifting consumer expectations threaten to undermine long-term business models. According to a 2023 report by Accenture, companies that actively work to reduce emissions could unlock an estimated $4.5 trillion in new economic opportunities by 2030, driven by energy efficiency, supply chain innovations, and the rise of green products.

Since the business sector contributes significantly to global emissions, accountability is a must, and recognizing their pivotal role in the shift toward a sustainable future becomes instrumental. In a report by the Carbon Disclosure Project (CDP) in 2017, 71% of global industrial GHG emissions come from 100 global companies alone. While many companies have made commitments, the execution of these promises is fraught with challenges and inconsistencies.

Navigating the Challenge of Greenwashing

The challenge of net zero is the challenge of greenwashing which is no longer new: many critics argue that corporate net-zero commitments often lack transparency, clear action plans, or robust accountability mechanisms. This phenomenon erodes trust and undermines genuine climate efforts. For example, some companies claim progress by shifting emissions off their balance sheets, outsourcing carbon-intensive operations, or using unverified carbon offsets that offer little real-world impact.

To avoid such, rigorous and transparent reporting and strict adherence to global reporting standards (such as, but not limited to, ISO 14064 and GHG Protocol Standards) becomes important. Second, stakeholders—including consumers, investors, and regulators—must hold corporations accountable, demanding evidence of meaningful action rather than empty promises.

The Importance of Innovation and Collaboration

Corporate strategies for net zero are becoming more sophisticated as many organizations are investing in technological innovations, such as carbon capture and storage, electrification of fleets, and the development of circular supply chains. Collaboration is also crucial: no single company can achieve net zero alone. Partnerships across industries and with governments, non-governmental organizations (NGOs), and the academe are necessary to scale solutions.

Firms like Microsoft and Unilever are leading examples of cross-sector collaboration, investing in renewable energy projects, and sharing carbon reduction technologies. However, widespread change will require systemic collaboration, not isolated acts of corporate responsibility. That means rethinking how entire value chains operate and how global markets can facilitate the net zero transition.

Future Actions for CXOs

Despite progress, time is of the essence and mostly not on our side. Every year of inaction or insufficient action locks us into higher temperatures and deeper climate crises. The corporate race to net zero must be both accelerated and scrutinized. Four key things must happen to achieve our goals as humanity:

• Commit to Science-Based Targets: Businesses should align with the Science-Based Targets initiative (SBTi) to ensure their goals are consistent with limiting global warming to 1.5°C.
• Prioritize Transparency and Accountability: Corporate leaders should adopt clear reporting standards, make data accessible to stakeholders, and welcome independent verification.
• Invest in True Innovation: The road to net zero requires massive investments in technology, R&D, and infrastructure that genuinely reduce emissions.
• Engage Stakeholders Across the Board: Governments, investors, and consumers must continue to push corporations toward meaningful climate action.

It is worth noting that the corporate race to net zero is nonetheless an opportunity to redefine business success in alignment with planetary and societal boundaries. Success will require an unwavering commitment to scientific principles, technological innovations, effective regulations, and an inclusive approach that prioritizes equity and resilience. As corporations deepen their role in this global transition, they stand not only to mitigate risk but to pioneer a new era where sustainable impact becomes the ultimate measure of achievement.