An increasing number of companies are turning to net zero as a way to reduce their environmental impact as concern surrounding global warming and climate change grows around the world. A recent CFO article cited the joint CSB and Rockefeller Asset Management (RAM) research initiative “ESG and Financial Performance,” saying all companies should consider actionable plans to reach net zero in part because of the financial benefits it has shown to provide. 

The article, “Starting on the Path to Net-Zero Emissions,” offers guidance to those interested in creating a net-zero plan. Net zero is a step beyond carbon neutrality, though the terms are often confused. Net zero, as the article points out, occurs when a company becomes carbon-neutral across its entire supply chain, which includes its employees, vendors, and consumers. 
CSB and RAM’s research initiative examines the relationship between ESG and financial performance in over 1,000 research papers written between 2015 and 2020, finding that a strong focus on material ESG issues is positively correlated with improved financial performance. Key takeaways included that sustainability initiatives at corporations appear to drive better financial performance and that studies indicate managing for a low carbon future improves financial performance.

To get started on the path to net zero, companies should identify potential carbon reduction opportunities across their entire supply chain, consider offsets as a method of decarbonization, and participate in environmentally friendly projects.

Excerpt: “Businesses can take concrete steps to demonstrate leadership in climate action and contribute to a low-carbon economy.”