Net Zero: what does it mean and how do we get there?

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In 2021, the Intergovernmental Panel on Climate Change (IPCC) released an up-to-date understanding of the physics behind climate change. The report confirmed that climate change is widespread, rapid, and intensifying. Now, in 2022, the IPCC has released a second report describing the impacts of climate change and the need for societies to adapt to it. In his call to action, the UN General Secretary, António Guterres, referred to the report as “an atlas of human suffering”. In particular, the IPCC states that approximately 3.3 to 3.6 billion people live in areas highly vulnerable to climate change.

You might have a range of emotions about climate change – from confusion to hope, desperation or possibly even denial. However, the evidence is clear. Current climate change is human induced, and to limit global warming to 1.5°C above pre-industrial levels, scientists have said that we need to halve global greenhouse gas (GHG) emissions by 2030 (compared to 2020 levels) and then cut them by 50 percent by 2040, reaching Net Zero GHG emissions globally by 2050 at the latest.

Why is this level so important? Because we need to limit the risk of triggering irreversible climatic tipping points within the Earth’s climate system. This latest IPCC report clearly states that we only have a brief and short window of time to secure a livable planet and a sustainable future for all. So, more than ever, global climate action is needed now.

Net Zero – what does it mean?

So what does it mean to reach a Net Zero state? To start simple: at a global scale, the term Net Zero is a simple equation that describes a state where, for all remaining GHG emissions emitted through human activities, the same amount is absorbed from the atmosphere.

A prerequisite for reaching this balance is to reduce current emissions drastically, as we cannot absorb current amounts of global emissions with known technologies. We therefore need to start by reducing emissions across society as much as possible. 

For companies, this means prioritizing the elimination of sources of emissions within their operation and value chain which follows a 1.5°C reduction trajectory.  It’s only when there is no possibility to eliminate more emissions that companies can neutralize their value chain emissions with carbon removal technologies.

Following standards

Today there are several Net Zero definitions that have been established by different organizations. Though all point in the same direction, they differ slightly.

In the long run, we will need alignment between Net Zero initiatives to help companies and investors work towards common targets. At Ericsson, we have contributed to the development of the International Telecommunication Union’s Net Zero standard specifically to help the ICT sector. Among the editors of the ITU standard is our own Ericsson Principal Researcher, Pernilla Bergmark.

I asked her what this standard really is about, and she explained:

"We developed this standard as we felt a need to help the ICT sector to set relevant, science-based and ambitious Net Zero targets and strategies and to navigate among the different international initiatives that provide guidance on Net Zero. These include the Science Based Target Initiative, the United Nations Framework Convention on Climate Change (UNFCCC), Race to Zero and the UNFCCC Climate Neutral Now.

In particular, the ITU standard stresses the importance of value-chain reductions. It defines Net Zero as a future state after all emissions that can be reduced are reduced, with like-for-like or permanent removals applied to balance the remaining emissions. Importantly, it also stresses that any Net Zero timeline should rely on the ability to halve emissions this decade and integrates the ICT sector decarbonization trajectory developed by ITU, the Global System for Mobile Communications Association (GSMA), Global Enabling Sustainability Initiative (GeSI) and the Science-based Targets initative (SBTi) as an intermediate target.”

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What is needed for companies to achieve Net Zero emissions?

According to the ITU Net Zero standard, and the SBTi, if companies want to reach Net Zero emissions, they need to:

• align their intermediate decarbonization efforts with pathways that limit warming to 1.5°C;
• achieve value-chain emission reductions consistent with the depth of abatement required in such pathways and;
• neutralize the impact of any source of residual emissions that remain unfeasible to be eliminated by permanently removing an equivalent amount of atmospheric carbon dioxide.

And what does this mean?

Companies need to start by setting 1.5 degree-aligned targets for the whole value chain, which means setting a baseline and short-term emission reduction targets in line with the 1.5°C ambition. The targets can differ slightly depending on what standard you consider but, in all, an ICT company is on track if they aim to halve their value chain emissions between 2020 and 2030, firstly. The 2030 halving is the first and most important milestone, because if we do not manage this, we will have a limited possibility to limit global warming to 1.5°C.

While companies do need to continuously follow a scientifically aligned 1.5°C reduction trajectory or go even faster, Net Zero is also about how to solve the final part of the puzzle – neutralizing emissions that are technically unfeasible to reduce (typically accepted to be around a maximum of 10 percent of baseline emissions). Solutions for this must be in place by 2050 at the latest, preferably earlier, to balance out residual emissions with equal amounts of carbon uptake or removals. This is sometimes referred to as negative emissions.

To provide negative emissions, the origin of the unabated emissions must be considered, to ensure that removals follow a “like for like” principle as Pernilla mentioned above. This means that there is a difference when removing carbon emissions of fossil origin and those belonging to the shorter carbon cycle associated with, for example, biofuels.

For example, if a company looks at its fossil fuel emissions, the negative emissions must emerge from carbon removal projects that store carbon permanently. In that case, planting trees, which is a good thing to do, is not sufficient as a neutralization strategy for Net Zero as the carbon removal is not permanent.

What will be crucial is that the scientific and standard-setting community agrees on clear guidelines for the amount of negative emissions that are allowed to reach a Net Zero state within the value chain and to ensure the quality and effect of any removals.

Ericsson’s approach and actions

At Ericsson, we welcome stricter requirements and guidelines for how companies in all sectors can reach a Net Zero state and support the necessary societal transition.

As part of our vision to pioneer a sustainable future, we have chosen to aim for Net Zero emissions within our value chain by 2040. Even though this long-term ambition is important for our work, our near-term actions are the most important for us right now. As part of our Net Zero ambition, we have committed to become Net Zero in our own activities already by 2030 as it’s crucial that we show faster action within the areas that we control ourselves as a company. At the same time, by 2030 we have committed to reduce emissions from our portfolio and supply chain by 50 percent.

This means that we will halve our value chain emissions by 2030, which is in line with the scientific pathways and Net Zero standards. Figure 1 shows our potential emission reduction trajectory to reach a Net Zero state, together with the corresponding negative emissions to neutralize any residual emissions within the value chain. In order of impact, the paragraphs below outline each area and describe our specific actions.

Figure 1: Ericsson’s carbon footprint and climate targets. The company’s initial focus is on reducing and avoiding emissions across the value chain as well as on investing in renewable energy. As a last resort, to address any unavoidable emissions, Ericsson will work to remove remaining emissions from the atmosphere through approved carbon removal strategies.

Halving emissions from using our portfolio by 2030

When customers use products and solutions from our portfolio, the emissions from their energy consumption belong to our company carbon footprint. Portfolio use currently represents 93.5 percent of our value chain emissions. To achieve a 50 percent reduction in this area, Ericsson will first and foremost continue to work on improving the energy performance of its products and solutions.

Better energy performance is a key enabler to lower network related carbon footprint and to help lower customers’ total cost of ownership. We’re already seeing today that this is important for our customers in their procurement criteria and Net Zero journeys.  

However, even though we work consistently to reduce our portfolio energy consumption, we also need our customers to switch to renewable energy sources or choose options with less carbon intensity. Both higher energy performance and renewable energy supply in combination are needed to halve these emissions this decade as an intermediate step towards Net Zero.

Figure 2: Ericsson’s carbon footprint. Click to enlarge.

Halving our supply chain emissions by 2030

In 2021, supply chain emissions equated to 7.6 percent of Ericsson’s carbon footprint for the value chain. According to Ericsson’s estimations, recycling of its products at end-of-life contribute to lower supply chain emissions. The reason for this is that emissions from recovered raw materials, such as aluminum, are lower than those from virgin raw material. Thus, product recycling results in a negative share of Ericsson´s emissions as shown in the figure above.

To halve supply chain emissions by 2030, we will work on the following main levers:

1. Improve the form factors of our products – we will continue to innovate to reduce product weight and size.
2. Select materials based on climate performance – a product carbon footprint is evaluated by using LCA (lifecycle assessment methodology). Looking at our base stations, three “carbon hotspots” have been identified as being emission drivers, namely, aluminum, die cast and electronic components such as printed circuit boards and integrated circuits. Our approach to design, sourcing of raw material, material substitution to use more recycled material and the method of die casting, among other factors, all impact the embodied carbon footprint.
3. Reduce emissions from our suppliers – we continue to urge our suppliers to reduce their supply chain emissions. Extra focus is on suppliers of our “carbon hotspots” of aluminum, diecasting and electronic components such as printed circuit boards and integrated circuits.
4. Reduction of transportation emissions (inbound and outbound) – we are committed to accurate and timely planning to meet our time to market and deliveries to customers by avoiding air freight.

Net Zero emissions in our own activities by 2030

Even though own activities only represent 0.4 percent of Ericsson’s total carbon footprint (fleet, facility, business travel and commuting/teleworking), this still represents emissions of our operations in over 180 countries associated with more than 100,000 employees. It´s critical that we keep our own house in order and demonstrate commitment towards our customers and society. We have direct control of these emissions and how they evolve. We have decarbonized immensely in these areas already and will continue to do so as outlined below in our key levers.

To demonstrate action and show that companies can and should move forward, we have chosen to not only to halve emissions in this area but to go fully Net Zero within own activities by 2030. This means that we need to decarbonize our own activities as far as possible, then permanently remove any associated residual emissions by 2030 at the latest. It’s important to understand that we will continue to neutralize remaining emissions in the years to come after 2030 to maintain that Net Zero state.

Our key levers to deliver this include:

1. Reduce energy consumption in facilities.
2. Purchase 100 percent of our energy from renewable sources – we will secure access to renewable energy sources by investing in power purchase agreements, securing green tariffs and buying energy-attributed certificates in regions where PPAs and green tariffs aren’t available. Other energy sources such as stand-by oil, natural gas heaters and so on, will need to be converted to solutions that can utilize renewable energy sources. The end goal is to match 100 percent of Ericsson’s energy consumption with renewable energy sources.
3. Transition the Ericsson operational fleet to non-fossil fuel alternatives – we have developed a trajectory and targets for fleet vehicles where the objective is to transform the fleet to become carbon free by 2030 at the latest. We aim to have it done by 2027.
4. Cap emissions from business travel to 50 percent from 2019 levels – business travel emission targets will be incorporated into the financial planning process and have main unit level targets approved annually.
5. Collect and measure commuting and teleworking emissions and deploy actions with employees to decarbonize these.
6. To enable the reduction of emissions from fleet vehicles, business travel and commuting, we will also continue to improve and develop digital tools that reduce the need for these activities.
7. Invest in permanent carbon removal projects to be able to meet the Net Zero commitment for own activities by 2030 and ultimately the 2040 ambition.

Net Zero in 2040

Even though the ICT sector has a small footprint of approximately 1.4 percent of the total GHG emissions, we need to collectively act now and show the way. If our industry decarbonizes at a fast pace, it can provide more connectivity solutions with even fewer emissions. Some of these solutions, can in turn have the potential to enable a reduction of emissions in other sectors (for example, smart grids, buildings and mobility, to mention a few).

While we at Ericsson have outlined our pathway to halving our emissions, the next decade after 2030 is a time horizon with uncertainties, risks and dependencies. But we have to find a way forward nonetheless. The action needs to start now, and time is running out to halve global greenhouse gas emissions by 2030.

Even though the UN calls it a Race to Zero, this is no ordinary race. It’s a race that everyone needs to participate in, AND we need to cross the finish line together, way before 2050.

[1] The future carbon footprint of the ICT and E&M sectors - Ericsson.

Want to know more?

Read Emelie’s previous blog post, 5 key things to know about COP26 and global climate action.

Read more about the importance of Ericsson´s Climate Action work and a connected, sustainable world.

Learn more about making a positive impact: how tech is helping us restore planet earth.

Here’s how smarter industries can help decarbonize our planet.