It’s clear that companies can no longer deprioritise environmental, social and governance responsibilities over profits. But with terms like “net zero” and “carbon neutral” being used interchangeably in the media and largely misunderstood by the public, it can be difficult for governments, companies, and organisations to build trust with communities in the face of greenwashing. Companies need to work even harder to show they have a plan to reduce their environmental impact and can substantiate progress along the way.

In this blog, we break down the difference between carbon neutral and net zero, decode Scope 1, 2 and 3 emissions, look at how the ASX Top 200 are tracking with these targets, and shed light on how diverting electronics from landfill is an important step in getting it right.

Clearing The Air – Carbon Neutral Versus Net Zero

While the general principles of sustainability have been around for decades, terms like “carbon neutral” and “net zero” are fairly new. There’s growing expectation that companies need to do their part for the planet, but less than half of the ASX200 having announced net zero commitments (PwC, 2022). Understanding the meaning behind the buzz words and ways your company can reduce emissions are critical, so let’s clear the air.

Being carbon neutral means reducing how much carbon you put into the atmosphere to equal the same amount of carbon you’re producing. Essentially the idea is to break even. So, companies that are carbon neutral have reduced their CO2 emissions and then offset the remainder by investing in projects that remove or reduce an equivalent amount of CO2 from the atmosphere. The goal is to have no net increase in CO2 levels.

The idea of net zero goes a step further. It's not just about balancing carbon dioxide emissions but also includes other greenhouse gases like methane and nitrous oxide.

Decoding Scope 1, 2 & 3 Emissions

Companies that fail to track and report on the emissions they’re producing run the risk of greenwashing their way to faux sustainability status. Scope 1, Scope 2, and Scope 3 are best-practice reporting metrics that describe emissions based on how they’re created and consumed. These can be used to describe CO2 or all greenhouse gas emissions. Let’s look at this from the perspective of companies reporting on their GHG emissions.

Scope 1 Emissions - Production: Scope 1 emissions are those generated from sources owned or controlled by a company. These emissions occur via the company’s operational activities or processes. For example, some traditional e-waste recyclers use smelter techniques to separate the e-waste using heat, so the emissions of this process would come under Scope 1. At Sircel, we’ve designed our process to be lower emissions by using an automated mechanical system to break down the e-waste. At your company, developing more efficient production methods will help reduce your Scope 1 emissions.

Scope 2 Emissions - Consumption: Scope 2 emissions are indirect, created by a company’s consumption of purchased electricity, heat, or steam. These emissions are produced off-site but fuel the company’s activities. For example, Scope 2 emissions could come from the electricity a company purchases from the grid to power its lights, computers, and other equipment. The emissions are often generated at power plants outside the company’s control but are part of the company’s energy consumption. One way to reduce Scope 2 emissions is to invest in renewable energy sources such as solar power. Sircel does this by installing solar panels on our facilities to reduce our reliance on the grid.

Scope 3 Emissions - Association: Scope 3 emissions are those that occur because of the existence of a company’s product, service or activities but are not directly owned or controlled by the company. These emissions are often linked to suppliers and customers. For example, an electronics retail company’s Scope 3 emissions could include the manufacturing and transportation of the products they sell, emissions from the customer using the product, and emissions from end-of-life treatment resulting in the product going to landfill.

With Great Power Comes Great Responsibility

With real fear of the climate crisis reaching breaking point, all eyes are on the world’s largest companies to demonstrate how they are making a difference. There’s an expectation that they achieve positive environmental outcomes proportionate to the emissions they create, and then some. ESG strategies and reporting capabilities are more critical than ever to show that, as a global community, we are moving towards these climate goals.

A recent report by Climateworks analysed 187 companies listed on the ASX200, which have operations in Australia, and assessed their climate commitments towards net zero. Overall, the analysis found that, based on current targets and commitments, the ASX200 is on track to overspend its carbon budget by 36%.

• 84 of the 187 companies assessed (45%) have a Scope 1 and 2 net zero target

• 16 of the 177 companies (9%) where Scope 3 emissions are deemed applicable have set a net zero target for Scope 3 emissions in line with a 1.5°C pathway

• 31% of the 177 companies fully disclose their Scope 3 emissions and 21% report on some, but not all

• 10 of the 187 companies assessed (5%) have set an interim emissions reduction target covering all applicable scopes

It’s clear that this low level of commitment is not going to abate the fear or help us avoid the climate cliff.

The Role of E-waste in Getting it Right

It’s clear that Scope 3 emissions are the most challenging for companies to address. It’s generally the largest emissions category and being outside the company’s direct control makes it difficult to minimise. Here are some ways your company can reduce their Scope 3 emissions:

1. Supply Chain Management: Choose suppliers that use the most sustainable practices, such as energy-efficient manufacturing processes, transportation, and packaging. Supply chain management can be difficult to track and manage if there are multiple downstream vendors involved, so finding a “one stop shop” solution can help streamline the process. This is one of the reasons we developed our end-to-end process at Sircel so we can provide our clients with full visibility and reporting of our operations.

2. Product Design and Lifecycle: Design products with a focus on recycled / recyclable materials and extending the product's lifespan to reduce emissions. Sircel works with manufacturers and product design teams to identify which materials are most easily recovered to reduce emissions and to swap difficult or impossible to recycle materials for those that can stay in circulation and avoid landfill.

3. Waste Management: Implement waste reduction and recycling programs to minimise emissions from waste sent to landfills. We can work with you to develop a bespoke resource regeneration plan for your company’s e-waste. This can include educational materials for your team to raise awareness of the global e-waste challenge and the importance of reducing your company’s environmental footprint.

4. Offsetting Emissions: For unavoidable Scope 3 emissions, consider investing in high-quality carbon offset projects that remove or reduce an equivalent amount of greenhouse gases from the atmosphere. Sircel’s carbon credit program is currently in development and, once approved, will make us the first e-waste company in Australia to have this accreditation. This will allow us to further support our clients by closing the loop on the challenging Scope 3 emissions.

E-waste is the world’s fastest growing waste stream and the use of electronics in our daily lives are directly linked to growing emissions, so having an end-of-life strategy for your company’s e-waste is an important step towards net zero. Partnering with a modern e-waste recycler that uses low emissions technology is an effective way to lower your company’s Scope 3 emissions. We’ve spent years developing our world-leading solution and now we are ready to support your company in achieving ambitious ESG goals.

Together, let’s ensure the future of e-waste means no waste at all. To find out more about partnering with us, click below to read more.