To meet the 2015 Paris Agreement goal of limiting global warming, the world of business is coming under increasing pressure to decarbonise and set firm net-zero commitments. That pressure comes from a range of powerful stakeholders, including governments and financial markets. Investors, banks, insurers and pension providers are evaluating the potential risks to their own business from the current systems’ continued reliance on fossil fuels.
Many companies, however, are unsure about the correct net-zero transition pathways for their operating sectors. Some of their key questions include:
- Can we reduce greenhouse gas emissions in line with our sectoral decarbonisation requirements?
- What is the most cost-efficient abatement plan?
- What abatement measures do I need to implement, and when?
A new transformational tool to help the transition to net zero
To address this uncertainty, PwC has developed a Pathways to Paris transformation tool for ten industry sectors within the German economy. The tool is web-based and free of charge.
The tool helps you understand your company’s decarbonisation options and implement associated measures in a cost-efficient manner. Financial sector specialists as well as industry experts can also use the tool to analyse decarbonisation transformation pathways and requirements together with their financial implications.
The sectors covered are:
- Road freight
- Residential real estate
- Commercial real estate
- Electricity generation
- Steel production
- Cement production
- Livestock farming (dairy sector)
- High-value chemicals
- Ammonia production
- Automotive industry
How the tool was created
The Pathways to Paris transformation tool is the result of collaboration between climate and industry experts from PwC Germany and the World Wide Fund for Nature. It draws on the ‘Towards a Climate-Neutral Germany by 2045’ scenario, which was published in 2021 by a leading research institution in Germany as a reference for sector-specific net-zero transformation pathways that align with the targets of the Paris Agreement.
The requirements and assumptions that went into the tool were validated in a series of 30 workshops with more than 80 participants from business, the financial services sector and academia.
‘The tool helps you understand your company’s decarbonisation options and implement associated measures in a cost-efficient manner.’
How the tool helps your company transition to net zero
The tool takes a three-step approach to offer actionable analysis.
- Companies follow a dedicated transition pathway that is tailored to their economic sector. This enables a better understanding of their greenhouse gas footprint and the minimum requirements for reducing emissions in accordance with the Paris Agreement.
- The tool also allows for the combination of various sector-specific decarbonisation measures. This means that companies can test the effects and costs of various reduction measures and move towards the objective of climate neutrality in a controlled, step-by-step manner. The tool provides an overview of those outcomes in graphic form.
- It also allows for the design of new combinations of measures based on their effects and cost implications. This means that companies obtain the most cost-efficient road map for their Paris-aligned transformation process.
The right tool for net-zero transition plans
Ultimately, companies need to confidently identify a reduction pathway that is compatible with the Paris Agreement and then develop cost-efficient measures for pursuing it. At the same time, international investors need reliable methods for assessing companies based on their transformation performance.
We believe the Pathways to Paris tool will prove a great help in achieving these aims.
Learn more about the tool and how to use it here
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Get in touch
Reach out to start a conversation.
Jürgen Peterseim
Senior Manager, Sustainability Services, PwC Germany
+49 30 2636-5409
