What are businesses doing to achieve global climate neutrality?

The main goal of the Paris Climate Agreement is for the world to be climate neutral by 2050. But what are businesses doing to become climate neutral? The requirements vary considerably depending on their size and sector. We take a look at their plans, achievements and to-dos.
Worldwide climate neutrality: ever more businesses want to become CO2-neutral
In the summer of 2020, a group of industrial heavyweights declared a worldwide war on their emissions and, dubbing themselves Transform to Net Zero, set out to become climate neutral.
Back in November 2019, LANXESS announced its goal of becoming climate neutral by 2040. And, regardless of the COVID-19 pandemic, we are continuing to pursue this objective undeterred.
“As a Group, now more than ever, we want to become climate neutral by 2040. The pandemic will not change this, even if it does present us with challenges and makes implementation more difficult.”

Hubert Fink,
Member of the Board at LANXESS AG

What does the term climate neutrality mean exactly?

The term climate neutrality is not uniformly defined. According to the Paris Climate Agreement

  • the global peaking target must be reached as soon as possible,
  • countries set out their respective contributions to this goal (Nationally Determined Contributions, NDCs),
  • the planet is to become climate neutral by the middle of the century.

This is the only way to limit global warming to 1.5 to 2 degrees Celsius. This limit has been set to avert the most catastrophic consequences of climate change.

Accordingly, climate neutrality means:

  • emitting only as many greenhouse gases as the earth can absorb and
  • radically reducing the current level of emissions to restore the balance.

This can be done in several ways:

  • reduce greenhouse gas emissions within the company and at suppliers,
  • offset the business’s reduced greenhouse gas emissions using compensation schemes such as emissions trading or by investing in climate protection projects,
  • expand so-called CO2 sinks such as forests and moors,
  • capture and store emissions, for example by injecting CO2 into the seabed off the coast of Norway or using the captured carbon as a raw material.

The terms climate neutrality, carbon neutrality, CO2 neutrality or net zero are sometimes used synonymously. But is unclear how a company or government deals with other greenhouse gases such as methane, nitrous oxide, and sulfur hexafluoride – gases that are much more harmful to the climate than CO2

Climate-neutral businesses: varying requirements

How long and involved a business's path to climate neutrality is depends mainly on three factors: the company's sector, its size and its lines of business. How diversified its supply chains are also plays a role. Businesses that produce locally using only a few raw materials and that sell their products locally or online emit very little. This applies, for example, to software developers or consumer-facing service providers.

“Businesses that go ahead now and commit to climate neutrality are sending an important signal to others. In terms of implementation, it's important that measures are backed up by a climate strategy.”

Andreas Kuhlmann,
CEO of the German Energy Agency
(© dena/photothek)
Internet Project Work at cozy Summer Location
Simply by switching to green electricity, knowledge-based businesses without manufacturing facilities can achieve a great deal in terms of climate neutrality
Energy intensive businesses need to do more 
Conversely, businesses emit high levels of emissions that use lots of energy to extract the raw materials they need, maintain complex international supply chains and/or are reliant on technology or energy to manufacture their products. This is true of energy-intensive industries such as coal and metal, automotive and chemical, as well as the food and animal feed industries.

Chempark Leverkusen PLA Plant
Energy-intensive businesses like those in Leverkusen´s Chemical Park usually have large manufacturing facilities, stores and extensive logistics operations. For them, climate neutrality is a challenging endeavor. 
To produce or deliver, energy-intensive businesses require large amounts of energy to run their equipment. This applies, for example, to furnaces and reactors, assembly lines and machine tools, boilers, and conveyor belts.
It easier for non-manufacturing businesses to achieve their climate goals 
Knowledge, service or data-based businesses have a distinct advantage in this regard. It is true that they also need energy, but unlike energy-intensive industries, manufacturing facilities play no role in their emissions performance.

In fact, the situation is completely different for them. Often, a large proportion of their emissions are attributable to energy supply, building infrastructure or travel, for example – something that translates into much lower energy consumption. There are no emissions from manufacturing or chemical processes. Moreover, if the energy they need is only electricity – instead of steam for example – they can simply switch to green electricity.
For LANXESS, climate neutrality translates into even more radical emissions reductions

LANXESS has already reduced its emissions by 50 percent since its founding in 2004. Climate neutrality represents another ambitious step on the road to greater sustainability.

  • By 2030, greenhouse gas emissions will be halved again, to 1.6 million metric tons of CO2 equivalents.
  • By 2040, emissions are to shrink to 300,000 metric tons. This remaining amount will be offset.
Nitrous oxide reduction unit at the caprolactam plant in Antwerp, Belgium
At its Antwerp site, LANXESS neutralizes the greenhouse gas nitrous oxide – a milestone on the road to climate neutrality in 2040

LANXESS is transforming in three key areas:

  • At Lanxess, we reduce emissions from our sources. This includes reducing nitrous oxide, for example. Laughing gas is harmless to humans but is 300 times more damaging to the climate than CO2.
  • We reduce our energy requirements – through smarter processes, innovations, and future-proof business activities.
  • We purchase very low-emission or climate-neutral energies.

At the same time, this means that energy-intensive businesses like LANXESS need clean energies to achieve the turnaround.

“Fossil energies have no future in industry. For chemical businesses, renewable energies are not just about the environment. Feasibility is also a key issue since currently renewables are neither available in sufficient quantities nor at competitive prices.”

Hubert Fink,
Member of the Board at LANXESS AG

Businesses have a responsibility: Thousands disclose their climate activities 

For years, thousands of businesses have been disclosing their climate commitments. They do this, among other things, to convince investors and other stakeholders that they possess good, sustainable corporate governance. The Carbon Disclosure Project (CDP), an international non-profit organization, has been rating cities and businesses for 20 years in terms of transparency and commitment to 

  • climate change,
  • water protection and 
  • forest protection.

In the meantime, almost 10,000 businesses have been audited and graded by CDP. To do so, they must submit comprehensive, detailed, and compelling information, including the following:

  • their emission levels (from their own sources, from external sources, from supplied goods, and from other sources), and
  • their corporate governance,
  • their targets and implementation,
  • their CO2 pricing, and 
  • their climate protection in the supply chain. 

“Climate protection is a business case for us. By focusing on conserving resources and looking forward, we become more efficient and a more sustainable partner for our stakeholders.”

Hubert Fink,
Member of the Board at LANXESS AG

Faster climate protection is achievable
For climate protection to progress at the necessary pace, “the technologies we have need to spread much faster,” says Andreas Kuhlmann, CEO of the German Energy Agency.
LANXESS has already decided to put a stronger R&D focus on climate-neutral processing and technology innovations. The goal of becoming climate-neutral by 2040 has been set. Major projects with considerable leverage, such as nitrous oxide reduction at the Krefeld-Uerdingen and Antwerp sites, have already been completed or are underway. But permanent improvements also remain on the agenda. LANXESS is increasing the synergies of its operations, for example in heat exchange or exhaust air purification.
“Whether it is product and process innovation or continuous improvement in operations, greater climate friendliness is on the agenda in every business unit. We also need completely new processes that are only being developed on an industrial scale. That is what our research and development is geared to.”

Hubert Fink,
Member of the Board at LANXESS AG

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