Beyond Net-Zero - The emergence of Net-Positive enterprise

Fujitsu / July 22, 2024

AI Computing Digital Transformation Global Responsible Business

In recent years, increasing levels of environmental awareness has led both governments and organizations to commit to enhancing their sustainability. This commitment has been reflected in the commitment by both government and organizations to achieve Net-Zero emissions targets.

As you may know Net-Zero refers to a state of balance between the amount of greenhouse gas emissions produced and the amount removed from the atmosphere, often through carbon offsetting measures. Net-Zero is seen as a significant step towards increasing sustainability.

However, now we are also starting to see organizations with even more ambitious sustainability goals of not just becoming Net-Zero, but Net-Positive organizations.

The Net-Positive Organization
Driving Innovation and Efficiency
Creating Shared Value
The Role of Collaboration
Stakeholders & Leadership
Sustainability Regulation
Lack of Expertise
The Future of Net-Positive
Conclusion
Key recommendations

The Net-Positive Organization

Net-Positive organizations' goal is to have a positive, not negative, impact on the world by improving the environment and society. This means not just reducing carbon emissions, waste, and water usage, but actively enhancing biodiversity, improving social conditions, and contributing to the circular economy.

This often involves various strategies such as reducing greenhouse gas emissions, improving energy efficiency, investing in renewable energy, promoting fair trade, or implementing sustainable supply chain practices.

For instance, Kingfisher, the UK home improvement company, has committed to creating more forests than it uses by 2050. Interface, a global commercial flooring company, has pledged to become carbon negative by 2040, meaning it will remove more carbon from the atmosphere than it emits.

Driving Innovation and Efficiency

Transition into a Net-Positive organization requires a radical rethink of business practices, processes, and a strong commitment to sustainability and to transforming business priorities and engaging with stakeholders in new ways.

Technology and data driven innovation is often key to delivering the sustainability transformation needed to create the more sustainable products, services, and operational practices needed to become Net-Positive. AI and Generative AI are playing an increasingly significant role in enabling these transformations. Emerging technology such as quantum simulation is also enabling the discovery of new more efficient and sustainable materials and new treatments to extend and enhance the quality of life of individuals.

For example, Unilever, under its 'Sustainable Living Plan,' has committed to improving health and well-being, reducing environmental impact, and enhancing livelihoods. This has led to the development of new products, such as concentrated laundry liquids that reduce water and plastic use, and innovative business models, such as water purifiers for low-income markets in developing countries.

Creating Shared Value

Net-Positive is about creating shared value, generating economic value in a way that also produces value for society. This involves addressing social and environmental challenges not as philanthropy or CSR, but as integral to business strategy.

For instance, Safaricom, the Kenyan telecommunications company, has created shared value through its mobile banking service, M-Pesa. By providing access to financial services for people without a bank account, M-Pesa has not only driven Safaricom's growth but also contributed to economic development in Kenya.

Loading component...

The Role of Collaboration

Becoming a Net-Positive organization is not something that can be achieved in isolation. It requires collaboration with a wide range of stakeholders, including suppliers, customers, communities, NGOs, and governments.

Fujitsu's research found that 57% of organizations who actively collaborated with other organizations on sustainability achieved their targeted sustainability outcomes and objectives. In contrast only 23% of companies with lower levels of sustainability collaboration managed to achieve their targeted sustainability outcomes.

For example, IKEA has collaborated with the World Wildlife Fund (WWF) and others to tackle deforestation and promote sustainable forestry. Similarly, Coca Cola has partnered with the WWF to conserve freshwater resources.

Loading component...

Stakeholders & Leadership

Fujitsu's recent survey also revealed that 51% of executives identified poor cooperation among stakeholders as a key barrier to delivering sustainability objectives.

It is critical that stakeholder targets, objectives and incentives are aligned to sustainability initiatives to avoid potential conflicts and ensure stakeholder prioritize commitments to sustainability initiatives.

Similarly, the survey revealed that 54% of respondents identified a lack of leadership as the primary obstacle hindering progress on sustainability initiatives. This finding underscores the crucial role of strong leadership in driving successful sustainability efforts.

Loading component...

Sustainability Regulation

The escalating sustainability regulations are compelling more organizations to enhance their sustainability efforts. However, without universal sustainability regulations, increased regulation can also have an unintended negative effect on sustainability.

In European steel plants have been forced to close to help achieve Net-Zero with a local negative social impact on jobs and communities. The steel production has been transferred from the gas-powered European steel plants to coal or brown coal powered overseas producers who are not subject to the same Environmental regulations. This has increased the pollution from steel production and the associated environmental transport costs of moving the steel to European markets.

Loading component...

Lack of Expertise

Organizations frequently lack the necessary internal expertise to select appropriate sustainability projects and guarantee their successful implementation. This underscores the value of partnering with a knowledgeable and experienced partner in sustainability projects.

The Future of Net-Positive

The transition to Net-Positive is not without challenges. It requires a long-term perspective, a willingness to challenge the status quo, and the courage to set ambitious goals. However, the potential rewards in terms of enhanced reputation, increased customer loyalty, improved risk management, and access to new opportunities are significant.

Moreover, as societal expectations evolve and environmental regulations tighten, the move towards Net-Positive is likely to become not just a competitive advantage but a business imperative. Organizations that fail to adapt risk being left behind.

Loading component...

Conclusion

Today, we are starting to see the emergence of Net-Positive organizations at the forefront of sustainability transformation. They still face the commercial challenge of remaining competitive whilst still finding a way to balance both sustainability and profitability.

However, with rising sustainability awareness, increasing sustainability regulation and mounting market and societal pressure for organizations to become more sustainable, we should expect to see an increasing number Net-Positive organizations emerging.

Loading component...

Key recommendations

• Sustainability expectations are constantly evolving so to ensure your organization meets sustainability expectations best practice keep reviewing your sustainability initiatives against the market leaders.

• Ensure stakeholder targets, objectives and incentives are well aligned to sustainability initiatives to ensure operational alignment on organizational sustainability goals.

• Keep reviewing when or if becoming a Net-Positive organization is right for your organization.

Why not talk to Fujitsu and see how we can help make you organization more sustainable and put you on track to becoming a Net-Positive organization?

Loading component...

Nick Cowell

Principal Consultant & Fujitsu Distinguished Engineer / Technology Strategy Unit/ Fujitsu

Nick is a technologist and futurist with extensive experience in hardware, software, and service development, having previously worked for leading technology providers across the USA, Europe, and Oceania.