What does it mean to be net zero?

The guide outlines that organisations should have a clear understanding of what it means to be net zero, which entails identifying and implementing a comprehensive plan that includes setting interim targets, allocating funds, reporting progress and integrating net zero into decision-making processes. By doing so, finance teams can help develop pathways to achieve net zero emissions while integrating sustainability into business and financial decision making.

Lead the way

To effectively transition towards net zero emissions, finance teams should identify and evaluate the risks and opportunities of pursuing a net zero strategy, develop the finance culture to support the transition, engage the board and executive management, and incentivise action along the value chain. The guide recommends that CFOs and finance teams act as custodians of an organisation’s value and support the adoption of a sustainable business model that aligns with a net zero commitment.

Transform your decisions

In order to bridge the emissions gap, organisations need to develop a net zero pathway that aligns with the Paris Agreement and integrate net zero targets into strategic planning and budgeting. The guide recommends that finance teams broaden the scope of their traditional reporting remit to integrate other metrics and provide decision-makers with insight on emissions information that comprises a combination of internal and external data sets.

Measure what matters

To accurately assess progress towards net zero emissions, finance teams need to measure and track performance, integrate natural, social and human capital information and report progress against the net zero pathway. By monitoring progress, finance teams can ensure the necessary focus, alignment across all functions, prioritisation of activity and resource allocation.

Access finance

The report highlights that the investment community plays a significant role in the transition to a net zero economy, so organisations should engage investors on net zero, raise and allocate funds to support their plans, and manage external reporting and disclosure, in line with growing demands for financial disclosures on climate risks. The guide recommends that organisations set up an effective climate governance process and establish a reporting process aligned to the TCFD recommendations.

Conclusion

The Net Zero Practical Guide for Finance Teams provides practical advice to CFOs and finance teams seeking to develop effective strategies to transition to net zero emissions. It stresses the importance of collaboration and internal buy-in whilst ensuring that organisations use reliable information to drive positive action towards net zero emissions.