CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Green Initiatives
The board of Himalaya Cements Ltd proposes to announce 'net zero by 2050'. The company plans to meet it mainly by buying cheap carbon credits while its own emissions stay unchanged. Which advice from the Company Secretary best reflects credible net-zero practice?
The Company Secretary should advise deep cuts in the company's own emissions on a science-based pathway, with credits used only to neutralise residual emissions. Net zero relying mainly on offsets while emissions stay unchanged is not credible and invites greenwashing allegations.
- AApprove it, since offsetting all emissions equals net zero under any approach
- BApprove it only if the target is announced without a baseline year
- CAdvise deep cuts in its own emissions with a science-based pathway, using credits only for residual emissionsCorrect
- DAdvise that net zero concerns only Scope 3 and Scope 1 can be ignored
Explanation
Credible net-zero frameworks require steep reductions across the value chain first, with removals or credits neutralising only hard-to-abate residual emissions. Relying on offsets alone risks greenwashing. A baseline and interim targets are needed, so omitting them is wrong.
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