Together we can make it: Stepping up the pace towards net zero

Here in the Channel Islands, we are proud to be part of PwC’s worldwide science-based commitment to achieving ‘net zero’ greenhouse gas emissions by 2030. Yes this is about doing our part in our own operations, but critically it is also about helping our clients, suppliers, and communities in which we live and work, to accelerate their own net zero transitions. So, what does this mean in the Channel Islands context? How can we all work together to protect our planet and unlock the potential of green growth?

Time to avert dangerous climate change is running out. As businesses, communities and societies, it’s still in our power to limit global warming and hence protect human health, economic prosperity and the natural world from the worst irreversible damage. But we need to move quickly.

2020 was another record-breaking year for global temperature increases, despite an expected pandemic-related fall in global emissions. It is clear that the 2020s will be pivotal in determining if we can bend the emissions curve fast enough, turning the COVID-related anomaly into a rapidly-falling emissions trajectory to limit warming to 1.5°C above pre-industrial levels, the goal set out in the Paris Climate Change Agreement.

Mobilising around a common goal

Net zero has emerged as a clear commitment around which society, businesses and supply chains can mobilise. It goes beyond being “carbon neutral” to align greenhouse gas reductions with the pace and scale required by science to be able to contain the rise in global temperatures to within 1.5°C above pre-industrial levels. It focuses first and foremost on stopping greenhouse gases from being added to the atmosphere and takes account of Scope 1, 2 and 3 emissions. Any residual emissions must be offset via carbon removal from the atmosphere, rather than offsetting through avoided additional emissions elsewhere.

The growth in net zero pledges has been dramatic in the last couple of years, with over 120 countries and 1,000 companies now working towards science based targets. In the asset and wealth management industry, the Net Zero Asset Owners Alliance covers around $5trn assets and counting, and the Net Zero Asset Managers Initiative was launched in late 2020 and already has 30 signatories.

Boosting innovation and growth

Former Bank of England governor, Mark Carney, has described the transition to a net zero economy as the “greatest commercial opportunity of our age”. Here in the Channel Islands, both Jersey and Guernsey have made island-wide carbon neutral and net zero commitments respectively. There is also significant work ongoing to strengthen our place as leading global centres for environmental, social and governance (ESG) conscious investment management. Working with businesses and through investment portfolios to pivot every sector into the zero carbon economy will create significant value for all concerned.

Leading by example locally

For us here at PwC in the Channel Islands, we’ve already been carbon neutral in our own operations and business travel for several years, with in-scope emissions reported to and offset via PwC UK. Further, both islands import low carbon electricity from France. So we’re starting from a good place in our offices as a result. But we’ll be doing more to reduce our energy consumption, and also working with our suppliers to do the same over time. Our biggest challenge, pre-COVID, is business travel, accounting for over 80% of our carbon footprint. We are already seeing the significant value from our investment in technology in the last couple of years and will continue to enhance our client service model, both digitally and through other measures, to ensure our approach only serves to strengthen our overall service.

We’re also eager to support our clients make the transition to net zero. For the finance industry, cutting through the complexity is key; it’s about understanding the greenhouse gas emissions associated with your portfolio, and mapping out a path to net zero, whilst creating value along the way.

We want to use our voice to encourage and support government policymakers in the development of their climate and green growth agendas for the islands. What can we do collectively that will enable an inclusive, just transition that is good for business and society as a whole?

Coming together to accelerate change

How then can we cut through the noise and build a robust and pragmatic approach to net zero? We are working with businesses, investors and asset owners around the world on their net zero strategies and plans. Depending on your starting point and your level of ambition, we are ready to help you in any of these four main components of net zero strategy development and implementation: 

1. Climate risk and impact baselining

Identifying and prioritising climate risks and opportunities, understanding current performance against peers, and assessing the value implications and change initiatives needed to mitigate climate risks.

2. Net zero strategy development

Understanding and evaluating the strategic sustainability issues for your business, assessing the business case for change and sustainable investments and developing and implementing business strategies which have sustainable development issues at the core.

3. Organisational transformation

Alignment of your organisation's operating model to your net zero strategy will drive the transformation needed to deliver net zero and includes capital or R&D investment decisions, people and talent development, and product, service and customer experience design.

4. Transparency, assurance and reporting

Transparency in internal and external measurement and reporting is an increasingly important factor in businesses being able to attract and retain responsible investment, as well as for managing the reputation of the business.

Share your experiences

In coming blogs, we’ll be looking at some of the practical issues the asset and wealth management industry have been facing in their quest for net zero and how these can be overcome. If you have questions, suggestions or issues you would like to discuss, please feel free to get in touch.