The building blocks for net zero transformation

The recent surge in corporate net zero commitments has been an important and promising development for combating the impacts of climate change — but there is still more work ahead. While most of the Fortune 500 companies have made net zero or carbon reduction commitments, many remain vague in their plans around how value chain emissions will be tackled and, in particular, how downstream emissions from products, services and investments will be monitored.

To support companies on their net zero journeys, PwC has defined nine key building blocks for corporate net zero transformation. This ‘blueprint’ seeks to help companies move from ambition to implementation. For each building block, this report:

  • Defines the checklist of critical actions companies need to undertake to transform to net zero
  • Explains why these actions are important
  • Provides practical and actionable guidance for companies to follow.

Nine key building blocks toward decarbonization

What’s next on the road to net zero?

Regardless of the ambition of your organization, all approaches to GHG reduction should begin with the first three building blocks.

1. Ambition

A credible and leading net zero ambition should align to the achievement of global net zero emissions by no later than 2050, limit warming to 1.5°C, consider the whole value chain, and be supported by a science-based targets approach.

2. Governance

Strong governance is critical to ensure accountability for net zero is driven throughout the organization, starting from the top. Frameworks should be in place to enable decision making on the basis of meeting long-term net zero ambition.

3. Strategy

Net zero is a strategic issue that is critical to companies determining how to grow profitably and maximize value and resilience. It requires an understanding of the associated transition risks and opportunities in the next 1-2 business cycles and beyond, how to minimize value destruction and unlock value creation, what this means for the size and shape of the business portfolio and organic versus inorganic growth, and how to translate this into strategic business planning.

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Ron Kinghorn

Ron Kinghorn

ESG Consulting Solutions Leader, PwC US

Reid Morrison

Reid Morrison

Global Energy Advisory Leader, PwC US

Abigail Paris

Abigail Paris

Director, PwC US

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