The Building

Blocks for Net Zero

Transformation
A practical guide to embedding net zero
aspirations and actions within and across
your business
A contribution to the Transform to Net Zero initiative
September 2020

Presented in association with

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Foreword
Even as COVID-19 takes hold of our attention, the pressing challenge of climate change
remains. With a view out beyond the current crisis, arguably the greatest transformation
challenge humankind has faced is staring right at us: the world has 10 years to halve global
greenhouse gas emissions and avoid global warming of above 1.5°C. Beyond this point of
warming, the more devastating impacts of climate change become irreversible. Put simply,
this gives us just over two business cycles to transform every sector of the global economy.

The good news is that we have recently seen a wave of bold business commitments – just
under 300 global companies have now made net zero before 2050 pledges1. But there is still
so much more to do. Only around 5% of the world’s largest companies represented by the
Global Fortune 500 have pledged to become net zero2. For those that have, there are varying
levels of robustness.

What we do know is that leading net zero commitments have certain attributes. They are
science-based. They take responsibility for tackling value chain emissions including
suppliers, products, services and investments. They also explicitly recognize that net zero
requires a reshaping of corporate strategy and in turn a firm’s operating model. And they
allocate substantial funding for skills, innovation and R&D to reflect the importance of new
capabilities, technologies and business models.

In this PwC and Microsoft report, contributed to the new Transform to Net Zero Initiative, we
have come together to create a ‘blueprint’ to help guide companies as they move from
ambition to action. We have a shared belief that delivering on net zero requires wholesale
business transformation, and that functions across the organization need to play a vital role
- from strategy, product development, sales and marketing, and innovation and R&D, to
corporate finance, risk and compliance, procurement and people. That is why, together, and
with case studies from the initiative’s founding members, we undertook this work to create
a good practice guide on net zero transformation for stakeholders across a business.
Transform to Net Zero is about leading companies stepping up to accelerate the
transformation of businesses and industries to achieve a socially just net zero future.
Companies like ours are well placed, and have a duty, to drive efforts and demonstrate what
Celine Herweijer Lucas Joppa
net zero transformation looks like so that companies of all sizes can do the same. Global Climate Change Leader, Chief Environmental Officer,
Partner, PwC UK Microsoft

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About
About Transform to Net Zero
This report - produced by PwC and commissioned by
Microsoft - is the first of many contributions to the Transform to Net Zero intends to develop and
Transform to Net Zero initiative. It sets the scene for deliver research, guidance and implementable
what is meant by net zero transformation for roadmaps to enable all businesses to achieve
businesses, and provides a consistent narrative and net zero emissions. It will focus on enabling
framing for the work of the Transform to Net Zero the business transformation needed to
initiative. achieve net zero emissions no later than 2050,
in addition to driving broader change, with a
It outlines the key building blocks for business focus on policy, innovation, and finance. The
transformation needed to deliver net zero, providing a initiative intends to complete the outputs of
coherent, holistic, and good practice framework that this work by 2025, and these will be available
businesses can use to inform and guide how to embed to all.
net zero into a company’s strategy and operating model.
The Initiative will be led by founding members
For each building block of the transformation journey, including A.P. Moller – Maersk, Danone,
this report describes a comprehensive checklist of key Mercedes-Benz AG, Microsoft Corp.,
actions businesses need to undertake over time, Natura&Co, NIKE, Inc., Starbucks, Unilever,
explains why they are important and provides practical and Wipro, as well as Environmental Defense
and actionable guidance that companies can follow to Fund (EDF). The Initiative is supported by BSR,
achieve them. Whilst comprehensive, this checklist is which is serving as the Secretariat for the
not exhaustive and different companies may choose to Initiative.
focus on specific actions most relevant to their
operating context. We also expect this checklist to This report, written by PwC, was
evolve with time, as more lessons are learned on commissioned by Microsoft as a first
implementing effective net zero transformation. contribution to the objectives of Transform to
Net Zero. It does not necessarily reflect the
This document is intended to be used by business views of the Transform to Net Zero members.
executives and function heads as a framework, setting
out how to translate a net zero commitment into the
This document seeks to complement the work of other business-focused climate action
business transformation that is required to build a
initiatives, including SBTi, CDP and the GHG Protocol, and WBCSD’s SOS1.5 program, as well as
business fit for the future. It is sector and size agnostic,
sectoral efforts such as the World Economic Forum’s Mission Possible Platform and the Net Zero
and contains case studies from Transform to Net Zero
Asset Owner Alliance. Going forward the Transform to Net Zero initiative will collaborate with,
founding members to bring the building blocks to life.
and leverage the diverse work, good practice and research of these initiatives, and integrate
them with Transform to Net Zero tools and resources. Transform to Net Zero’s aim is to enable
companies of all sizes, everywhere, across industries and value chains to fast follow.

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Contents

Introduction 5

Overview: Building Blocks for Corporate Net Zero Transformation 7

Ambition: Aligned to achieving global net zero by no later than 2050 9

& to limit warming to 1.5oC

Governance: Accountability driven from the top 12

Strategy: Embedded and aligned net zero into company strategy 15

Enterprise transformation: Key operating model changes in support 19

of transformation

Supply Chains: Transformed net zero supply chain 23

Innovation: Developed innovation and technologies to deliver net 28

zero

Finance: Financing the net zero transformation 34

Transparency: Communicating action 37

Engagement and influence: Enhancing the pace and scale of net 40

zero action

Conclusion 43

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Introduction
What does climate science tell us? Why is business action critical?
In November 2018, the Intergovernmental Panel on Climate Change (IPCC) published There is an ever increasing gap between actual emissions reductions commitments
research3 warning of the devastating impacts of global warming of 1.5°C above pre- made by countries (Nationally Determined Contributions - NDCs) and those necessary
industrial levels on natural and human systems. The impacts include the loss of arctic ice to limit warming to 1.5°C. Based on current unconditional NDC pledges, the world is
sheets, sea level rise, warming oceans, biodiversity loss, increasingly severe extreme heading for a 2.8°C temperature rise4. In reality this number may be even higher as NDC
weather events, such as heatwaves, droughts, storms, coastal and inland flooding, leading to implementation is uneven and patchy.
greater food insecurity, destruction of livelihoods and assets, and loss of life.
Whilst countries are expected to significantly raise their climate commitments in
At current emissions rates, human-induced warming is adding around 0.2°C to global 2020, we stand far away from the pace and scale of reductions needed to keep the
average temperatures every decade. If this rate continues unabated, global warming 1.5°C goal within reach. PwC’s Low Carbon Economy Index 20195 shows that global
could reach 1.5°C by as early as 2030. The science makes it clear that to have more than a progress on emissions reduction has worsened in recent years and the gap between the
50% chance of avoiding catastrophic climate breakdown, we must halve global greenhouse actual decarbonization rate (-1.6%) and that needed to keep warming to 1.5°C (-11.3%) is
gas (GHG) emissions by 2030 (from 2010 levels) and reach net zero global emissions around growing.
2050.
Companies have a pivotal role to play in closing this emissions gap. Their actions,
resources, ability to innovate, and wide-reach are critical to rapidly decarbonizing
Figure 1: Low Carbon Economy Index 2019: Transition pathways (Source: PwC)
industries, infrastructure, value chains, and what we produce and consume. Action over
the next decade - which equates to the next two business cycles - will be critical to make it
possible to limit warming to 1.5°C . Companies have a responsibility to drive this
transformation, and to protect their employees, customers, investors, and most critically,
the societies they serve.
What does net zero mean for business?
Net zero is a “state in which the activities within the value chain of a company result
in no net impact on the climate from greenhouse gas emissions”.
A credible net zero strategy means eliminating sources of emissions in the value chain at a
pace and scale consistent with limiting global warming to 1.5°C as far as possible, and after
this point removing any residual emissions that remain unfeasible to eliminate through
permanent carbon dioxide removals. It is recommended that all interventions adhere to
strict social and environmental safeguards, and those with strong social and
environmental co-benefits are prioritized. A foundational guide for the science-based
assessment of corporate net zero targets has been provided by the Science Based Targets
Initiative (SBTi)6.

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Introduction (continued)
The moment in time
Today as the world grapples with COVID-19, we are experiencing a global crisis that The recent surge in corporate net zero commitments is a vital and promising
knows no borders, has impacted billions of lives, and has left no organization or development, but there is still much more to do. Out of the close to 300 companies with
economy untouched. It’s shown how systemic risks can have exponential repercussions — public net zero pledges today, many commitments remain vague in how value chain emissions
on human health and loss of life, business and supply chain performance and survival, will be tackled, and in particular downstream emissions from products, services and
employment, inequality and the global economic outlook. The immense scale and diversity investments. These are the largest sources of emissions for most companies (referred to as
of the challenges sound very familiar to those who have long championed urgent action to Scope 3 emissions) and failure to address these emissions will result in failure to achieve a net
heed the science and avert catastrophic climate change. zero economy. Furthermore, companies are still at the very early stages of embedding net zero
into business and supply chain strategy and transformation efforts. As net zero requires full
The difference with climate change is we know what the costs will be if we don’t act value chain transformation, companies cannot act alone and success will be dependent on a
now. We know the costs are rising, and will continue to rise exponentially with every common and accelerated path forward.
fraction of increased global warming. Current estimates suggest global losses from climate
change could total US$600 trillion7 by the end of the century. Resetting and reconfiguring for the future
The good news is the tide on climate action is beginning to turn. Governments and Critically, the end goal is not just net zero, but a thriving, socially just, net zero future.
jurisdictions are ratcheting policies and regulation to support decarbonization in line with Marginalised groups and low-income communities often bear the greatest impacts of climate
bolder climate targets. Investors increasingly recognize the implications on investment change and there will be transitional implications for workers, sectors, communities and
performance and value creation and destruction: over US$45 trillion assets under regions that will need to be managed.
management (AUM)8 - close to half of total AUM9 - is held by investors that have pledged to
Companies must help enable the conditions needed to achieve effective, just and sustainable
drive climate action. And close to 300 global companies have now made so-called “net-zero
climate solutions for people of all gender, race and skills. Examples include proactively driving
before 2050” pledges since 2019, spurred by pressure from investors, customers, consumers
inclusivity and social impact of new net zero products and solutions, upskilling and reskilling to
and employees alike. There is an increasing recognition that many levers to cut operational
enable an inclusive workforce transition, upskilling and broader support for SME partners and
emissions present a good return, and that industries will together need to solve some of the
suppliers, integration of social metrics into reporting and disclosure around net zero, and
technological innovation challenges for harder to abate emissions.
incorporating inclusion and a “just transition” into policy advocacy efforts.

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Building Blocks for Corporate Net Zero Transformation

To deliver on their net zero commitments, companies will need to undertake end-to-end
business transformation. This includes understanding the implications of net zero for a
company’s growth strategy and operating model, and embedding net zero across all
business functions from governance, to supply chains, to finance and innovation.

To support companies on their net zero journeys, PwC has defined nine key building blocks for corporate net zero
transformation. This ‘blueprint’ seeks to help companies move from ambition to implementation. For each building
block, this report:
● Defines the checklist of critical actions companies need to undertake to transform to net zero;
● Explains why these actions are important; and
● Provides practical and actionable guidance for companies to follow.
The report also includes case studies from ‘Transform to Net Zero’ founding members, which are intended to help bring
the guidance to life and share successes, lessons learnt and future plans and roadmaps.
The building blocks, and checklists, include actions and suggestions that even today’s most leading companies on
climate action may only just be embedding, or even considering. It is intended as a forward-looking framework to guide
the net zero transformation journey rather than steps that are expected to be in place from Day 1.

Figure 2: Building Blocks for Corporate Net Zero Transformation (Source: PwC)
Align organization around net zero Enable business transformation Bring others along

1| 2| 3| 4| 5| 6| 7| 8| 9|
Ambition Governance Strategy Enterprise Supply Chains Innovation Finance Transparency Engagement

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Checklist of key actions

Ambition: Aligned to achieving global net zero Governance: Accountability driven from the top Strategy: Embedded and aligned net zero into
1 by no later than 2050 & to limit warming to 1.5oC 2 3 company strategy
Alignment of company Checklist of key actions: Oversight and Checklist of key actions: Net zero is embedded Checklist of key actions:
ambition to achieving ✓ Set a net zero vision that follows a accountability for net zero ✓ Those at highest level of organization into company strategy, ✓ Understand how net zero is changing
global net zero by no later science-based approach driven through the entire assume responsibility for delivering net including growth market dynamics and value
than 2050, underpinned by ✓ Understand total emissions impact organization, including at zero transformation strategy and functional ✓ Assess capabilities required to succeed
science-based targets across value chain the highest levels of the ✓ Establish net zero and climate change as strategies to maximize under net zero future
approach to limit warming ✓ Prioritize actions to deliver your net zero company and Enterprise standing agenda items at executive level value and build ✓ Identify options to deliver net zero strategy
to 1.5oC of warming. Define commitment Risk Management. ✓ Assign management oversight of net resilience in a changing ✓ Develop business case to deliver net zero
what good practice on ✓ Develop a credible carbon offset zero transformation climate strategy
ambition looks like. approach (including measures to avoid, ✓ Evaluate net zero incentives structure ✓ Align operating model blueprint to deliver
reduce and remove emissions) net zero strategy

Enterprise transformation: Key operating Supply chains: Transformed net zero supply Innovation: Developed innovation and
4 model changes in support of transformation 5 chain 6 technologies to deliver net zero
Company is structured to Checklist of key actions: Net zero integrated across Checklist of key actions: Company invests in R&D Checklist of key actions:
achieve net zero with the ✓ Establish clear structure of the whole supply chain to ✓ Leverage existing supply chain and builds innovation into ✓ Ensure net zero is embedded in
operating model designed responsibilities and accountabilities to build a well connected, transformation efforts to deliver ways of working to corporate R&D and innovation
to deliver net zero targets. deliver net zero smart, efficient and low emissions reductions harness emerging ✓ Provide finance to develop innovative
A holistic change ✓ Harness culture and people carbon supply chain ✓ Assess emissions and climate impacts technologies and develop net zero solutions
management program is ✓ Establish policies, processes and a ecosystem. Includes across whole supply chain new solutions to deliver ✓ Innovate to develop products and
designed and executed measurement framework to deliver net adapting supply chain ✓ Incentivize suppliers to reduce net zero at pace. Net zero services that deliver net zero
where required. zero transformation strategy, aligning with emissions is embedded in to ✓ Leverage Corporate Innovation to
✓ Engage customers existing transformation ✓ Build supplier capacity to deliver net innovation/R&D strategy, unlock internal barriers to net zero
✓ Leverage technology and digitisation efforts, and supporting the zero in to product and service transformation
program supply chain to ✓ Build a connected and smart supply development, and ✓ Build innovation ecosystem through
decarbonize chain ecosystem amongst suppliers corporate ventures. partnerships

Finance: Financing the net zero transformation Transparency: Communicating action Engagement and influence: Enhancing the
7 8 9 pace and scale of net zero action
Substantial commitment Checklist of key actions: Provides transparent and Checklist of key actions: Engages and influences Checklist of key actions:
and willingness to finance ✓ Develop investment strategy balanced information on ✓ Communicate your net zero strategy stakeholders across ✓ Develop engagement strategy
net zero transformation ✓ Embed into corporate finance decision- progress against net zero ✓ Disclose progress against your net zero ecosystems to enable ✓ Inspire and lead by example
through existing and new making ambition, including strategy change at pace and scale. ✓ Influence value chain
finance functions and ✓ Identify and prioritize sources of business transformation. ✓ Disclose with clarity and transparency ✓ Promote policies and behaviors that
modalities. financing enable and accelerate progress
✓ Deliver investment

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Building Block: Ambition

A credible and leading net zero ambition should align to the achievement of global net
zero emissions by no later than 2050, consider the whole value chain, and be supported by
a science-based targets approach.

This section is Checklist of key actions:

important for:
Heads of Set a net zero vision for company that follows a science-based approach to
Sustainability, ensure warming is limited to 1.5oC and covers the full value chain by: developing
Corporate Social a net zero commitment that is inclusive of operations and value chain, and is
Responsibility (CSR) underpinned by a science based approach aligned with limiting warming to 1.5oC.
Team, Business Unit
Heads, Supply Chain Understand total emissions impact across the value chain and identify the
Lead, CEO & Senior largest emissions sources by: conducting a value chain GHG baseline assessment;
leaders. supplementing company data with environmental modelling techniques; repeat
footprinting annually.

Prioritize actions to deliver your net zero commitment by: gathering information
to identify GHG emission reduction levers across the value chain; assessing the GHG
reductions impact, costs and return on investment, feasibility, risks and
opportunities to prioritize GHG reduction levers.

Develop a credible carbon offset approach (including measures to avoid, reduce

and remove emissions) to reach net zero before 2050 by: developing a robust
carbon offset strategy including an emissions mitigation hierarchy; analyzing the
market for offsets; developing a management/ assessment/ certification process.

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Ambition: Aligned to 1.5 degree warming

✔Set a net zero vision for company that follows a ✔Prioritize actions to deliver your net zero commitment. Practical advice for:
science-based approach to ensure warming is Companies will need to understand the nature and cost of their critical GHG reduction
limited to 1.5oC and covers the full value chain levers in the short, medium and long term. This should inform the net zero aligned Companies just starting their net
There is currently no consistent definition of “net zero”. Without a
corporate strategy and business transformation. zero journey:
robust definition grounded in a 1.5°C aligned science-based target, Companies should gather information across their operations and value chain, to Start by clearly defining net zero and what
companies face reputation risk and reduced investor confidence. identify GHG emission reduction levers. This should involve engagement with it means for your business. It may be
business and functional heads across the organization to identify efforts underway and helpful to conduct an executive briefing, to
Sustainability and CSR leads should work closely with the highest
build consensus on key new levers to pursue. ensure leadership are aligned around a
levels of leadership in the organization to approve a net zero
commitment. This should be underpinned by a science based target Assessment and prioritization of key operational and value chain GHG reduction levers common view of what net zero is, why it is
aligned with limiting warming to 1.5oC. A robust target should meet would include GHG reduction quantifications, costs and return on investment, feasibility important to follow a good practice
Science Based Targets Initiative (SBTi) approval, include interim and risks, and wider business contingencies and impacts (e.g. people - upskilling, re- approach, key business drivers, and the
targets, and evolve with any emerging SBTi Net Zero skilling, technology). In addition wider social and environmental impacts should be implications (including challenges and
standard/framework, including Foundations for Science-based Net- identified (e.g. biodiversity, water use, waste, human rights, social inclusion). opportunities) involved.
zero Target Setting in the Corporate Sector7. The net zero vision Once formulated, a company’s net zero implementation plan should be embedded
should set out timeframes and accountability, how the company within its broader corporate strategy and operating model. This should be an
Mature companies seeking to be
intends to decarbonize emissions from its operations and value inclusive exercise bringing in leads from all business functions, and leverage the net zero leaders:
chain, its approach to hard to eliminate residual emissions through expertise of the organization's Sustainability and CSR leads. It is the robustness, breadth and pace of
offsetting, and an enabling investment strategy.
change of a net zero ambition, and explicit
✔Develop a credible carbon offset approach to reach net zero before integration into corporate strategy, that
✔Understand total emissions impact across the 2050, including measures to avoid, reduce and remove emissions will set leaders apart. Leading net zero
value chain and identify the largest emissions commitments:
Companies are offsetting emissions through actions that help society avoid or reduce
sources emissions outside of their value chains (compensation measures) and actions that remove ● Set a 1.5°C aligned science-based
A value chain-wide greenhouse gas footprint is essential to baseline carbon from the atmosphere within or beyond their value chains including natural climate ambition for the business
impact and translate the net zero implications into business specific solutions (neutralisation measures). Both measures can play a critical role in society ● Take responsibility for the greatest
parameters. reaching net-zero, but should not be used as a substitute for reducing value chain sources of emissions, including supply
Companies should conduct a value chain GHG baseline and emissions in line with 1.5°C. chain, products and service use, and
footprint assessment to understand total GHG emissions impact Companies should develop a strategy that follows the mitigation hierarchy of first investments
and identify the largest emissions sources across the business, reducing actual emissions as far as possible, then offsetting those that remain to bring ● Outline how net zero translates into
business units, geographies, product lines, supply chain and tiers, the balance of emissions to net zero at the target date. Nature-based and engineered corporate strategy and business
downstream in logistics, product use and end of life. The assessment solutions offer ways to remove carbon from the atmosphere and can be used to offset a transformation
should have an executive sponsor and audience, but can be driven by company's residual emissions. For all carbon removal options, in addition to verification, ● Dedicate innovation/R&D funding to
the Sustainability function who are familiar with these assessments. the permanence of removal and broader social and environmental impacts should be net zero technologies and products
Data gaps, particularly in scope 3 for supply chain and product use, assessed. ● Align corporate advocacy with net zero
can be filled using environmental modelling techniques e.g. Input- ● Apply robust carbon offsets to bring
Companies should analyze the market for offsets - considering how price of carbon
Output models and/or life cycle assessments. GHG footprinting forward net zero target date
offsets might change and assessing the landscape of offsetting schemes and ‘in house’
assessments should be conducted annually or at least every two ● Actively manage wider social and
options. The strategy should also include a management/ assessment/ certification
years, and changes monitored regularly. environmental impacts
process to ensure offsets are credible, and robust social and environmental safeguards.

Who is responsible for delivering Net Zero Ambition:

Heads of Sustainability, Corporate Social Responsibility (CSR) Team, Business Unit Heads, Supply Chain Lead, CEO & Microsoft | PwC 10
Senior leaders.
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Ambition case studies

A.P. Møller - Maersk Danone

Maersk has set a target to have net-zero CO2 emissions from its own operations by 2050, which Danone has set an ambition for zero net carbon emissions across its full value chain by 2050,
includes having commercially viable, net-zero vessels on the water by 2030. In addition to this, the including an absolute reduction of Scope 1 and 2 emissions by 30%, and a 50% reduction in emission
company aims to deliver a 60% relative reduction in CO2 emissions by 2030 compared to 2008 levels intensity full scope by 2030 (compared to 2015). The company’s 2030 reduction targets where
and has committed to setting a formal science-based target (SBT). approved by the Sciences-Based Targets initiative in line with 2C warming. Danone is currently
working on new reduction targets in-line with 1.5°C.

Wipro Mercedes-Benz AG
Wipro has set and registered a science-based target for its own With Ambition 2039, Mercedes-Benz plans to bring its new car
operations that is consistent with reductions required to keep fleet to net zero CO2 within less than 20 years, going beyond
warming to well-below 2C. The target includes absolute operations and along the entire value chain. In 2019, the
reductions in Scope 1 and 2 GHG emissions of 48% by 2030 and Sciences-Based Targets initiative approved the company’s
in Scope 3 GHG emissions (business travel, employee targets. Starting in 2022, passenger cars and vans will be
commuting, upstream fuel and energy-related emissions) of
30% by 2030.
Ambition produced CO2-neutrally in the more than 30 plants of Mercedes-
Benz AG worldwide.

Unilever Microsoft
Unilever has attained the most advanced status within the SBTi, Microsoft plans to be carbon negative by 2030 and to remove its
having set and registered a 1.5 degree-aligned science-based historic scope 1 and 2 carbon emissions by 2050. It will achieve
target of net zero emissions across all products by 2039, from the latter part of this target through a strategy that goes beyond
sourcing to point of sale. Unilever annually calculates its value achieving carbon neutrality through avoided emissions, to focus
chain-wide GHG footprint for 14 key countries across 12 product on carbon removals.
categories.

Starbucks Nike Natura & Co

Starbucks has committed to set a science-based GHG reduction Through its Move to Zero journey towards zero carbon and zero Natura & Co has set an ambition to achieve net zero carbon
target and is also a signatory of the UN Global Compact’s waste, Nike has made a pledge to be net zero by 2050. Nike has emissions by 2030, across both operations and value chain, for its
Business Ambition for 1.5°C commitment. Starbucks tracks and attained the most advanced status within the science-based four brands - Avon, Natura, The Body Shop and Aesop. Its net
quantifies the company’s GHG emissions across Scopes 1, 2 and targets initiative, having set and registered a 1.5°C aligned zero commitment covers scope 1 : own emissions, scope 2 :
3 and has set a public aspiration to be “resource positive”, science-based target. The company has also committed to the purchased energy, scope 3: upstream (all company activities and
including through GHG emissions reductions. United Nations’ Fashion Industry Charter for Climate Action. suppliers) and downstream (consumers, waste disposal, etc.).
Natura & Co is a founding member of the UN Global Compact
"Business Ambition for 1.5°C: Our Only Future.

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Building Block: Governance

Strong governance is critical to ensure accountability for net zero is driven throughout the
organization, starting from the top. Frameworks should be in place to enable decision-
making on the basis of meeting long-term net zero ambition.

This section is Checklist of key actions:

important for:
Senior Management. Those at the highest levels of the company assume responsibility for delivering
net zero transformation by: incorporating net zero into understanding of directors’
duties, and appointing oversight of net zero transformation at the highest levels of
the company

Establish net zero and climate change as standing agenda items at the executive
level by: structuring senior committees to ensure holistic oversight of net zero;
assessing senior leaders’ command of climate change and net zero in relation to the
company’s strategy and operating model.

Assign Senior Management responsibility for, and oversight of the delivery of

net zero strategy and transformation by: putting policies and reporting structures
in place throughout the organization to deliver relevant Management Information.

Evaluate net zero incentives structure, including at the highest levels of the
company by: re-evaluating any existing incentives that may hinder progress on net
zero transformation, and considering creating incentives to support management to
deliver on net zero milestones and targets.

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Governance: Accountability driven from the top

✔Those at the highest levels of the company assume ✔Assign Senior Management responsibility for, Practical advice for:
responsibility for delivering net zero transformation and oversight of the delivery of net zero
Companies just starting their net zero journey:
Climate change, and the net zero transition, is a foreseeable financial strategy and transformation
risk and opportunity within mainstream investment and planning Companies can begin by consulting publicly available sources
Management oversight and incentivization will drive successful of information for effective climate governance. The FSB Task
horizons. Those at the highest level of a company, should therefore be delivery of the net zero strategy and transformation across the
accountable for the net zero transition in the same way they are for other Force on Climate Related Financial Disclosures10 (TCFD), and
organization by setting the tone at the top. WEF Climate Governance Principles and Guiding Questions11
company decisions about long-term strategy. This will help ensure the
long-term resilience, viability and success of the business. provide detailed guidance, and may help those starting their
Companies should assign oversight and delivery of the net net zero journeys to build an understanding of the key issues.
Net zero should be incorporated into the understanding of directors’ zero transition and climate-related issues to accountable
member(s) of management. An executive ‘net zero’ working session can be an effective first
duties by ensuring that net zero considerations systemically inform step. Working sessions should be interactive, and challenge
near-term and long-term strategic planning and decision-making executives to consider the business implications of climate
processes, and are embedded into the management of risks and Structures and processes should be established (through new
or existing channels) to compile timely, relevant and high change and how net zero fits into the broader company
opportunities across the company. There should be oversight of net strategy. A helpful output of a ‘net zero’ working session is a
zero transformation at the highest levels of a company. quality management Information, which management can
use to regularly report net zero progress at the highest levels of roadmap of actions (e.g. addition of net zero to relevant
the organization. This will empower management to committee agendas, further training, assignment of delivery
✔Establish net zero and climate change as standing oversight to Management, investor engagement), that can be
effectively deliver the net zero strategy and take intervening or
agenda items at the executive level mitigating actions if required. taken to the highest level of the organization for approval.
To enable the net zero transformation to take place in a joined-up way, it The Sustainability function will likely have the technical
should be a standing agenda item at Executive Committee level. ✔Evaluate net zero incentives structure, knowledge required to shape and facilitate these sessions.

Senior committees should be structured in a way that enables holistic

including at the highest levels of the company Mature companies seeking to be net zero leaders:
oversight of, and engagement with, net zero. This is facilitated when That which gets incentivized gets done. Yet, corporate For companies to be leaders, it is essential that the highest
assessment of plans and progress related to net zero feature on the management is typically incentivized on a vast number of levels of leadership are fully engaged with the net zero business
agendas of one or more relevant senior committees, including those topics, many of which are short-term in nature. At times, these transformation. Both groups need a clear understanding of the
that cover strategy, planning, risk management, metrics and short-term incentives can conflict with the longer term goals relationship between the company’s action on net zero and
performance. These committees should also share regular progress associated with the net zero transition, hindering effective broader company strategy and operating model. Senior
updates with each other. delivery of net zero strategy. leadership should also champion net zero publicly.
It is essential that those at the highest levels of the organization bring a Furthermore, oversight of the net zero transformation should
In light of the above, as a company matures in its net zero be clearly embedded in senior committee structures and
mix of informed perspectives that enable effective long-term decision
journey senior leaders should re-evaluate any existing regularly featured on relevant committees. This includes in the
making. This can be achieved by tasking a director, committee or
incentives that may hinder progress on net zero remuneration committee, which should consider good
external advisor with assessing senior leader’s understanding of
transformation and consider creating incentives to support practices as they evolve, including trends on compensation
climate change and net zero to ensure that, at the highest level, the
management to deliver on net zero milestones and targets. and KPIs.
company is sufficiently diverse in knowledge, skills, experience and
background to effectively debate, and take decisions to support, the
net zero transition.

Who is responsible for delivering Net Zero Governance:

Microsoft | PwC 13
Senior Management.
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Governance case study: examples from Danone, Unilever & Wipro

Danone Unilever Wipro

At Danone, accountability for the company’s action on climate At Unilever, it is the responsibility of the Board and CEO to review, At Wipro, oversight for climate sits with the Chairman of the Board
change has been clearly assigned at the Board and Senior monitor and guide the company’s climate strategy. The Board’s and the CEO. Within the Board, strategic oversight and quarterly
Management levels. Danone’s CEO is responsible for the company’s Corporate Responsibility Committee tracks progress and monitors review of Wipro’s sustainability program (which includes climate
vision and climate strategy. Furthermore, because the global risks linked with the Unilever Sustainable Living Plan which related programs) is the responsibility of the Governance,
Cycles and Procurement team has been tasked with driving climate includes sixteen climate-related targets. The Corporate Nomination and Compensation Committee, which is chaired by an
action, Board-level responsibility for climate change sits with a Responsibility Committee provides regular updates on progress independent director. Within Senior Management, the Chief
Board Director who is also Executive Vice President and Chief and risks to the Board. Unilever’s CEO also publicly leads by Sustainability Officer (CSO), holds responsibility for climate change
Financial Officer of Cycles and Procurement. example. In 2018, he served as Chairman of the International and reports directly to the Founder-Chairman of the Board. A
Chamber of Commerce, Chair of the B Team, and Vice-Chair of the portion of the CEO’s variable compensation is based on the
Danone also implements monetary rewards for Senior UN Global Compact, where he has championed the role of business performance of business units that carry oversight and
Management in order to incentivize delivery of climate-related in addressing the Sustainable Development Goals, including responsibility for delivery of climate solutions for customers,
objectives. A portion of long-term incentive compensation is based climate action (SDG13). including those related to energy management and smart grids.
on the company’s climate performance score in its annual CDP
The CSO’s annual salary increment is dependent on the
disclosure. These measures have helped to clarify accountability One element of Unilever’s remuneration policy is a share matching
achievement of Wipro's sustainability goals for the year, which
for climate within the company, raise the profile of climate change scheme based on company performance called the Management
include targets for GHG emissions reductions.
on the Board’s agenda, and drive action on emissions reductions. Co-Investment Plan (MCIP). Twenty-five percent of the total MCIP
award is assessed on sustainability considerations through
Unilever’s Sustainability Progress Index, a joint assessment made
by the Corporate Responsibility & Compensation Committees.
These two committees determine a rating each year, which takes
into account Unilever’s wider progress on sustainability together
with the company’s publicly reported targets (including Unilever’s
commitment to reduce the GHG impact of products across the
lifecycle). From 2018, Executive Directors (CEO & CFO) have been
required to invest at least 33% of their annual bonus in MCIP.

Microsoft | PwC 14
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Building Block: Strategy

Net zero is a strategic issue that is critical to companies determining how to grow
profitably and maximize value and resilience. It requires an understanding of the
associated transition risks and opportunities in the next 1-2 business cycles and beyond,
how to minimize value destruction and unlock value creation, what this means for the size
and shape of the business portfolio and organic versus inorganic growth, and how to
translate this into strategic business planning.

This section is Checklist of key actions:

important for:
Understand how net zero is changing market dynamics and impact on value
CEO, Corporate Strategy
creation by: assessing market disruption under net zero, analyzing changes in
/ Chief Strategy Officer, customer preferences, quantifying risks and opportunities, and assessing the
Senior leaders, Head of competitive landscape.
Sustainability.
Assess and develop capabilities required for the company to succeed under a net
zero future by: conducting a net zero capabilities assessment and gap analysis, inform
capability-based strategy, inform People strategy and M&A strategy.

Identify options to deliver capabilities driven net zero corporate strategy by:
assessing changes to portfolio, customer offering, growth levers and pricing and asset
valuation.

Assess options and develop a business case for net zero corporate strategy by:
quantifying key drivers for action, cost and benefit assessment including value
creation, return on investment and holistic criteria including wider business,
environmental and social impact.

Reshape and/or align operating model blueprint to deliver net zero strategy and
capabilities by: blueprinting operating model and developing an implementation
roadmap.

Microsoft | PwC 15
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Strategy: Embedded and aligned net zero into company strategy

✔Understand how net zero is changing market ✔Assess and develop capabilities required for the ✔Identify options to deliver capabilities-driven net
dynamics and impact on value creation company to succeed under a net zero future zero corporate strategy
The transition to net zero is complex. It is important to assess There is a huge opportunity for businesses that have differentiated Companies need to turn net zero ambition and strategy into
market dynamics to ensure both upside opportunities and downside capabilities and a coherent portfolio of products and services tangible actions and initiatives to ensure transition at pace and
risks are captured to understand net zero implications on business geared to a net zero future to gain competitive advantage. scale.
growth and where re-shaping or re-invention is needed.
Corporate strategy, supported by Sustainability/ Climate experts There will be multiple options for achieving the strategy, so
To achieve this, companies should conduct scenario analysis to can develop a shortlist of key capabilities - including systems breaking down into tangible actions allows each to be assessed
evaluate how changes related to the net zero transition (including and tools, people and skills, and knowledge and behaviors - and to define a clear path forward. Corporate Strategy should lead
policies and regulation, technology, customer preferences, required to succeed in a net zero future. These could include, for an exercise to identify delivery options, and coordinate input from
investor demands and talent) could impact business performance. example; engineering and technical excellence to develop, test executive team, Market and Functional Heads and Sustainability.
The FSB Task Force on Climate-Related Financial Disclosures and scale business-critical low carbon solutions, or sustainable
Options include:
provides a framework that can be harnessed. supply chain expertise.
● Portfolio management: when and how do products and
Strategic insight from scenarios should be used to identify the Companies can then assess how well positioned they are for
services need to change, which areas will benefit from
value creation and destruction drivers across business in the success vs critical gaps, by comparing current distinctive
investment, and which require accelerating, reshaping or
short, medium and long term, including estimates of financial capabilities against those required for net zero. It is important
divesting?
materiality. to highlight strengths and areas of alignment as well as potential
areas of improvement. These should consider where are gaps ● Customer offering: how will net zero impact channels and
When determining a winning strategy, a comprehensive market
including workforce upskilling , reskilling and recruitment and how routes to market? How will expectations of customers change?
assessment is critical, including customers and competitors. The
best to embed diversity, inclusion, and belonging considerations. How can net zero impact customer perception of brands and
assessment should consider how the market (and market
value pricing? Do any brands need re-defining?
adjacencies) may fundamentally shift, including disruptive new As business strategy is reshaped to align with a net zero future, the
technologies and business models, and emerging customer needs executive team should pursue a corporate growth strategy that ● Growth: consider organic and inorganic growth levers
and preferences. leverages existing and targeted differentiated capabilities critical including when and how mergers, acquisitions and disposals
to competitive advantage and growth. These winning capabilities can be leveraged, and alliances to deliver differentiated net
Findings should be shared with the CEO and Senior Management
around net zero need to be coherently integrated into zero solutions. Think about the expansion opportunities net
team to inform future strategy development and implications for
functional strategies, and the corporate innovation strategy and zero capabilities can present in adjacent businesses - and
the operating model.
M&A strategy. when and how to react.
● Pricing, profitability and asset valuation: when and how can
pricing and revenue models change?

Who is responsible for delivering Net Zero Strategy:

CEO, Corporate Strategy / Chief Strategy Officer, Senior leaders, Head of Sustainability Microsoft | PwC 16
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Strategy: Embedded and aligned net zero into company strategy

✔Assess options and develop a business case for ✔Reshape / align operating model blueprint to Practical advice for:
net zero corporate strategy deliver net zero strategy and capabilities
Companies just starting their net zero journey:
It is important that the actions and transformation undertaken to Companies must put net zero capabilities at the core of the
achieve net zero deliver maximum benefit to the business, and operating model to ensure the day-to-day actions of individual A comprehensive understanding of what net zero is and how it
society at large. A clear and compelling business case for net zero employees, and of business units and functions, work towards the will create and destroy value is a critical first step to reshaping
transformation will help to bring along leadership, management delivery of net zero ambition and company strategy. corporate strategy to align with a net zero future. Companies
and people, and amplify investor engagement. new to net zero can begin by quantifying the financial
Companies should develop an operating model blueprint that materiality of ‘transition’ risks and opportunities and to inform
Companies should develop a business case that includes key puts differentiating capabilities to deliver net zero at its heart. An a business case for transformation. The recommendations of
business drivers for a net zero transformation, and where possible operating model determines behavior, workflow and process the FSB TCFD provide a framework for assessing climate-
a financial materiality assessment of a “do nothing versus business design, technology decisions, and investment decisions. related risks and opportunities that companies may find
as usual” approach, and a quantification of the costs and benefits Companies should consider what their differentiating capabilities helpful to follow.
of action. This can include quantifying value creation opportunities mean for: people and organization, processes and controls, tools,
(including customer growth, pricing, cost efficiencies), return on data and technology, culture, measures and motivators. Companies could also set up a collaborative steering group
investment, and assessment of wider social and environmental including functional heads from across the organization, with
Companies should develop a business transformation roadmap, Sustainability leading the technical analysis, and presentation
impacts, including impact on employees and communities. This
including corporate, business unit and geographical/market to the CFO and wider senior leadership.
will ensure conflicts of interest are identified early, and that the net
actions and milestones for delivery of net zero aligned strategy and
zero transformation delivers maximum benefit to the business, to
society and to the environment.
operating model transformation. They should ensure critical Mature companies seeking to be net zero leaders:
changes are made first, quick wins are actioned, and key
The business case narrative should be created early, and used in dependencies are identified and embedded. Leaders will have net zero fully embedded into corporate
stakeholder engagement. strategy and will have followed the detailed steps outlined in
this section. At a minimum, companies looking to lead on net
zero should have:
● Developed and engaged around a business case for net
zero transformation across corporate leadership
● Identified differentiating capabilities to deliver net zero
● Reshaped the company growth strategy to align with a net
zero future, and these differentiated capabilities
● Identified adjustments to operating model required to
deliver net zero aligned growth strategy

Who is responsible for delivering Net Zero Strategy:

CEO, Corporate Strategy / Chief Strategy Officer, Senior leaders, Head of Sustainability Microsoft | PwC 17
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Strategy case study: Wipro

How Climate Risks will inform our enterprise risk With regard to health impacts, the study focused on India. In 4 of
assessment and corporate strategy 12 cities, we project a likely increase in cases of fatigue and
headaches due to more hot days and heatwaves. In two cities,
Wipro partnered with KPMG and IIT-Delhi, a leading academic increased cases of upper respiratory disorders are projected.
institute with expertise in climate modeling, to commission a Across locations, increased cases of seasonal flu and allergies are
Climate Change Risk Assessment Report. This was an 18- month projected.
study completed in July 2020.
With regard to business impacts to Wipro, we anticipate significant
The goal of the study was to analyze climate change risks to financial impacts to our business, especially related to customers
Wipro's operations, specifically infrastructure, employee health in specific relevant business units, including energy, utilities,
and wellbeing, and the business portfolio. manufacturing and health. In addition, there are new
Projections of climate risks were completed through to the year opportunities that can emerge from these climate change
2100, applying two climate scenarios: Optimistic (aka scenarios.
Representative Concentration Pathway (RCP) 4.5) and Business- We are in the process of formally included this as part of our
As-Usual (aka RCP 8.5). enterprise risk management and operational decision making
Here is a summary of findings related to likely risks to our framework.
operations, employee health, and business:
The physical risks assessment covered 12 cities in India and 6
countries outside of India in terms of extreme hot days,
heatwaves, Urban Heat Island (UHI) effect, air quality, warm
nights, extreme rainfall days, urban flooding, water stress, and risk
coverage.
In the RCP 4.5 scenario, the report suggests that water stress in
India will be aggravated in 8 out of the 12 cities studied while heat
waves are expected to worsen in 6 out of the 12 cities.
In terms of countries outside of India:
● Germany and United Kingdom are phasing out dependence on
coal and nuclear-powered plans, which could lead to increased
electricity prices and impact operations.
● In Romania, increased flood levels are expected
● In the Philippines, we are likely to see more serious floods and
cyclones.
● In the United States, the present government is moving away
from clean power plan, considered a regressive step, leading to
uncertainty in terms of climate policy.

Microsoft | PwC 18
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Building Block: Enterprise transformation

A transformation program is needed to execute the strategy and embed net zero into
corporate structure, business functions, and business capabilities. This change effort will
include realizing quick wins and, in parallel, work on longer-term operating model changes
to deliver on the strategy.

This section is Checklist of key actions:

important for:
Establish a clear structure of responsibilities and accountabilities to deliver net
Head of zero aligned corporate strategy by: assessing organizational and corporate
Transformation/ structures; establishing responsibility and accountability across organization, including
Transformation impact on decision making, roles and responsibilities, information flow, spans of
control, communication channels and relationship management.
Director, Operations
and Functional Leads, Harness culture and people to deliver net zero transformation by: conducting a
CEO sponsorship. culture assessment; assessing and redefining core competencies; developing a
workforce plan including upskilling and reskilling, and building net zero into rewards
and recognition.

Establish policies, processes and a measurement and reporting framework to

deliver on net zero transformation by: reviewing and updating policies, processes
and decision making principles, developing new processes, defining internal net zero
KPIs, and establishing a net zero measurement and reporting framework.

Engage customers and harness customer channels to accelerate net zero value
creation by: executing on sales strategies and goals for net zero-relevant products and
service lines; integrating net zero into marketing campaigns; building net zero
considerations into regular customer engagement and support.

Leverage Technology and Digitization programs to deliver broader value creation

including decarbonization by: digitally enabling processes; embedding net zero-
related benefits into digital transformation efforts and into technology and
architecture; and entering flexible partnerships with IT providers.

Microsoft | PwC 19
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Enterprise: Key operating model changes in support of transformation

✔Establish a clear structure of responsibilities and ✔Harness culture and people to deliver net zero ✔Establish policies, processes and a measurement
accountabilities to deliver net zero aligned transformation and reporting framework to deliver on net zero
corporate strategy Creating coherence across an organization's culture, strategy and transformation
The right organizational structure will ensure functional leads and operating model and updating its talent strategy will drive Policies, processes and KPIs are important as they create the
employees are aligned around a common understanding of their behaviors required to deliver the net zero transformation, and can mechanisms to deliver net zero transformation, provide users with
role in the delivery of the net zero corporate transformation and that make companies more attractive to its current employees, potential information they need (at the right granularity) to embed net zero
there is sufficient management attention and accountability to keep employees and customers. into decision making, and articulate expectations of employees.
the company on track. Companies should consider how their culture and employees’ Companies should review and update (where necessary) policies
Companies should assess their current organizational and values link to their net zero strategy. Companies should assess to ensure net zero is embedded e.g. prioritizing GHG savings and
corporate structures and identify what needs to change and how, their culture to identify existing limiting values within the renewable energy use.
in order to deliver net zero transformation efforts. For example, organization which make it difficult to achieve net zero
transformation, such as frequent business travel; as well as Process owners should work with sustainability / climate /
what functions, divisions, geographies will be critical for
specific strengths of the culture that will help to accelerate the operational specialists to conduct a review of existing processes
transformation efforts and are there key gaps in delivery.
transition, such as collaborative and innovative thinking. - including activities and tasks - to identify net zero improvements
Companies should ensure they have a clear structure of such as low carbon substitutions, alternative delivery models and
responsibilities and accountabilities for net zero throughout the An actionable roadmap and engagement plan should then be emissions reductions; and develop new and integrated
organization. This should extend beyond Sustainability teams and built and delivered to address these limiting values and capitalize processes for net zero services and products, where required, with
across functions and business units including, e.g. Operations, on these strengths. This should include identification of leaders a focus on keeping processes lean. They should develop internal
Customer Services, Investor Relations. Companies should clearly and influencers across the organization to support culture change net zero KPIs and specific and ‘SMART’ targets for each core
articulate what needs to change and the impact on decision and net zero alignment. business process; developing data requirements; and establishing
making, roles and responsibilities, information flow, spans of It is also critical that an organization’s people have the required a KPI tree to show where existing process level KPIs indicate
control, communication channels and relationship management. skills and competencies to deliver the net zero aligned corporate positive or negative performance towards net zero.
Companies should then step a level deeper into assessing their strategy. Companies should first assess and (if necessary) Process KPIs should feed into a net zero measurement
operating models against net zero, covering all aspects of the redefine their core people skills and competencies. They should framework that considers all levels of the organization and is
organization such as people, culture, processes, incentives, analyze gaps with existing competencies and develop a optimized for accuracy, relevance, timeliness and flexibility. There
information, tools and technology. workforce plan including talent attraction, retention, and should be a single point of ownership for net zero reporting,
development to meet net zero core competencies, focusing on an responsible for establishing, communicating and integrating the
The rest of this section deep dives in the key operating model inclusive transition for workers and communities through framework across the organization, and ensuring data analytics is
changes likely required to deliver net zero. upskilling and reskilling and embedding diversity, inclusion, and effectively leveraged. The framework should build on an
belonging considerations. established measurement standard such as the GHG protocol,
Companies should also motivate and challenge employees to and define how companies measure and monitor operational and
embed net zero considerations into their day to day and ensure value chain emissions. It should provide information for decision
the net zero transformation is a part of employees core priorities. making at the Strategic (i.e. Executive), Tactical (i.e. Programme/
Companies could consider building net zero incentives into Project) and Operational (i.e. Process) level. Companies should
rewards and recognition at all levels of organization. also enable and develop long term sustained value creation,
and the reporting needed to facilitate this, so that net zero aligned
activities are sufficiently considered and prioritized alongside
short term objectives.

Who is responsible for delivering Enterprise for Net Zero: Head of Transformation/
Transformation Director, Operations and Functional Leads - CEO sponsorship Microsoft | PwC 20
 Introduction Overview Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Conclusion
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Enterprise: Key operating model changes in support of transformation

✔Engage customers and harness customer ✔Leverage Technology and Digitization programs, Practical advice for:
channels to accelerate net zero value creation to deliver broader value creation including
decarbonization Companies just starting their net zero journey:
The front office is the direct customer interface and delivers the
types of products and services that are sold, so it is critical that Many companies are undergoing a technological and digital Think of your current and upcoming large scale transformation
incentives and structures are aligned to accelerate net zero-related transformation, with automation, advanced analytics, connected programs, consider how you can incorporate net zero and
value creation. Net zero should become a part of regular and solutions, and new technologies more broadly creating new decarbonization benefits into them e.g. does your technology
everyday customer connection, go-to-market, and marketing and opportunities to cut GHG emissions whilst creating commercial upgrade have capability to optimize GHG emissions and
communications. value. Embedding net zero considerations into technological improve data? Can you include net zero performance as a key
transformation efforts can therefore create a win-win. design principle in your org redesign, alongside resilience and
The Sales function has a vital role to play in creating demand cost savings?
for emerging sustainable and net-zero aligned products and New technologies can be a critical enabler of net zero
services. Upskilling will be key, in addition to creative sales transformation efforts across business operations through system Your business transformation roadmap should identify quick
strategies, including promotions and pricing strategies, new efficiency gains linked to automation and smart insight wins versus longer term changes. Tackle the low hanging fruit
pathways to purchase, and client experience in order to promote generation, but also through enabling new industrial systems (e.g. early, to make an immediate impact and to build leadership,
sales growth. Sales goals for net zero within the incentive structure decentralized energy grids, smart homes, mobility on demand). employee and external stakeholder confidence in your net zero
for the sales function can help to accelerate growth and The technology and data architecture itself can also have a transformation.
productivity. significant contribution to the operational GHG footprint. It is Mature companies seeking to be net zero leaders:
Companies should consider integrating net zero considerations therefore important to embed net zero as a key consideration of
into existing and new marketing campaigns to, for example, technology and digital transformation efforts. Leaders should be embedding net zero transformation at the
promote low carbon products and services, encourage sustainable core of all current and future transformation programs. Expect
Examples include planning for a digital workforce (e.g. virtual
buying practices, and promote net zero brand values. Includes an operating model blueprint explicitly developed/redesigned
working technology, mobile applications and digitally empowered
focused outreach to amplify key net zero value messages, around net zero transformation and a series of large scale
staff), mapping and actively monitoring energy use of systems and
connecting with customers and influencers, and maximizing programs to deliver the change - prioritized for actions that
infrastructure (including data centers), developing a technology
engagement and demand. would have biggest decarbonization impact and return on
GHG reduction plan, and establishing new technology capabilities
investment.
Build net zero into the customer experience and journey, to support delivery of net zero ambition.
where applicable, to meet emerging customer demands and Companies should consider net zero action during technology
expectations. Leverage insights from customer engagement procurement processes. IT providers are key parts of the
channels to inform product development functions around new company value chain, and impact can be maximized through
net zero aligned products and services that meet customer wants partnerships with companies that have a shared ambition to find
and needs. Also use engagement channels to help customers and realize emissions reductions.
understand the value of products and services that are net zero
aligned (see Engagement building block).

Who is responsible for delivering Enterprise for Net Zero: Head of Transformation/
Transformation Director, Operations and Functional Leads - CEO sponsorship Microsoft | PwC 21
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Enterprise Case study: Mercedes-Benz AG

Ambition 2039: Our path to CO2-neutrality CO2-neutral production as of 2022

“
An emission-free fleet of vehicles: With this vision, we are committed to climate As early as 2022, our own Mercedes-Benz car and van plants worldwide will
protection and air pollution control. That is a core element of our sustainable be producing CO2-neutral vehicles. This applies to more than 30 car and van
At Mercedes-Benz, individual business strategy. Our ambition is to make our fleet of new cars CO2-neutral plants. An important element is battery production, which will also be CO2-
by 2039 and to have no relevant impact on inner-city air quality. We take a neutral worldwide as of 2022. The second battery plant in Kamenz, which
mobility is the purpose of our holistic approach to climate protection: Our goals cover all stages of the was opened in 2018 and is the center of competence of the Mercedes-Benz
work and the legacy of our automotive value chain – from technical development to the extraction of raw global battery production network, was designed from the outset to be a
founding fathers. Our mission materials, to production, service life and recycling. CO2-neutral plant and already meets this requirement today. The Kamenz
site is responsible for the production of battery systems for Mercedes-Benz
for the future is to preserve this In the coming two decades, we at Mercedes-Benz Cars & Vans will Cars hybrid, plug-in-hybrid and battery-electric vehicles.
asset – and we will change in fundamentally change our product portfolio. Our path toward zero
emissions includes electric vehicles, further efficiency improvements At the Mercedes-Benz plant in Sindelfingen, we have put into operation one
order to achieve this. A lane through hybridization, and the further development of our vehicles with of the most modern automobile production facilities in the world: Factory56.
change is necessary. We know state-of-the-art internal combustion engines. It has been supplied with CO2-neutral energy since it went into operation.
that and we are working on it The photovoltaic system on the roof supplies the building with green
Mercedes-Benz Cars is planning electrification in all segments, from the electricity.
with all our efforts. This lane smart to our SUVs. To this end, we are investing about ten billion euros in the
expansion of our electric fleet, more than one billion euros in the Our suppliers are also part of our holistic approach to climate protection. We
change is mainly connected want to implement effective climate protection measures together with our
development of battery production, and we are systematically driving
with two issues: forward the transformation to the electric future of our company by partners in the supply chain. The starting point is the creation of
decarbonization and purchasing battery cells for more than 20 billion euros. transparency. To this end, we are working with organizations such as CDP in
the car sector to assess the environmental impact of our supply chain. We
digitization. Success with In the car segment, we will focus in the coming years especially on plug-in- are in close contact with our most CO2-intensive suppliers to identify
digitization will determine the hybrid technology and purely battery-powered models. Five all-electric effective measures for reductions. We will make CO2 targets a key criterion
models and more than 20 model variants of plug-in hybrids will already be
future of many companies; firmly established in our car product range by the end of this year. Purely
for decisions on suppliers. The first models of the next EQ generation,
starting with the EQS, will already be equipped with CO2-neutral battery
success with decarbonization electric variants in the compact segment and the all-electric EQS for cells.
will determine the future of our sustainable luxury in the premium segment are already in the starting
blocks. ● Farasis: In September 2019, we entered into a sustainability partnership
planet. with battery-cell supplier Farasis Energy (Ganzhou) Co., Ltd. – a Chinese
Our milestones until 2039: developer and supplier of lithium-ion battery technologies. In addition to
the observance of human rights in the supply chain and the issue of
Ola Källenius ● 2022: Several electrified variants in all segments of Mercedes-Benz Cars. recycling, the partnership also covers battery-cell procurement from
● 2025: Up to 25 percent of unit sales to be accounted for by all-electric CO2-neutral production.
Chairman of the Board of
vehicles (depending on the framework conditions).
Management of Daimler AG and ● 2030: Achieving more than 50 percent of car unit sales with plug-in ● CATL: Within the framework of the strategic partnership, CATL is also
Mercedes-Benz AG hybrids or all-electric vehicles. fully committed to the sustainability goals of Mercedes-Benz AG. This
● 2039: A CO2-neutral fleet of new cars. includes the sustainable production of battery products with renewable
energies, minimizing the CO2 footprint in terms of logistics within the
entire supply chain, and consideration of all aspects of social
responsibility.

Microsoft | PwC 22
 Introduction Overview Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Conclusion
Building Blocks Ambition Governance Strategy Enterprise Supply Chains Innovation Finance Transparency Engagement

Building Block: Supply chains

Supply chain emissions are often a major, if not the major, source of a company’s GHG
emissions. Enabling and supporting emissions reductions at all levels of supply chain is
critical to achieving net zero transformation. Existing supply chain transformation efforts,
including digital transformation and programs driven by resilience or efficiency, can
deliver dual benefits of optimizing for decarbonization. A critical element will be the
evolution of traditional supply chains toward a connected, smart, and highly efficient
supply chain ecosystem.
This section is Checklist of key actions:
important for:
Leverage existing supply chain transformation efforts to deliver emissions
Head of Supply Chain, reductions: reviewing supply chain strategy and design, embedding net zero into
Head of procurement, existing and future digitization, and developing and delivering a strategic roadmap.
Sourcing Managers &
Directors, Procurement Assess emissions and climate impacts across whole supply chain by: conducting a
function, Sustainability value chain GHG footprint assessment, supplementing company data with
function. environmental modelling techniques, and repeating foot printing annually.

Incentivize suppliers to reduce emissions by: embedding into procurement cycle

and contracting principles, providing funding and financial incentives, as well as
adopting innovative collaboration models.

Build supplier capabilities to deliver net zero by: engaging in partnerships, training
and programs. Collaborate with peers who share supplier base to scale impact.

Build a connected and smart supply chain ecosystem amongst suppliers by:
mapping key suppliers against net zero commitments, adopting collaborative
practices, applying agile methodologies to test and scale supplier solutions and
conducting scenario analysis on supply chain.

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 Introduction Overview Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Conclusion
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Supply chains: Transformed net zero supply chain

✔Leverage supply chain programs to deliver ✔Assess emissions and climate impact across full ✔Incentivize suppliers to reduce emissions
broader value creation including decarbonization supply chain Companies need to create the business case for suppliers to
Putting net zero at the heart of supply chain strategy, program and Most companies have limited data or visibility of the supply chain decarbonize their own operations and supply, and support the net
any digitization and transformation efforts will ensure net zero is beyond tier 1 or 2. This is a key barrier to net zero action that must zero transformation. Contractual terms, procurement requirements
not sidelined and is considered alongside other critical metrics such be solved. and financial incentives are key levers to hold suppliers accountable
as cost and customer service. for net zero action.
Companies should assess GHG emissions across the supply
Leveraging information from the value chain GHG baseline and chain beyond tier 1 and 2 to identify where the biggest emissions The procurement team should embed net zero consideration
footprint assessment, companies should review their supply are and to assess data availability, data quality, data gaps and key into all applicable supplier policies, with regular reviews to
chain strategy and design against the supply chain framework issues and existing supplier commitments around update with new guidance and/or regulation as required, including
(e.g. Plan, Source, Make, Deliver, Return) to assess the priority of decarbonization. supplier onboarding, code of conduct and contracting principles.
net zero and GHG reductions at each stage of the chain against Net zero activities and emissions reduction performance should be
The procurement team should work with sustainability and embedded into every stage of the procurement cycle including
other metrics including cost and customer service. Net zero
sourcing experts to define net zero KPIs and targets to assess in requirement definition, tender, evaluation criteria and
considerations should be embedded into procurement and
performance across supply chain (e.g. by function, commodity, assessment scorecards and contract requirements. Net zero and
sourcing approaches for products, services, materials and
raw material, geography and supplier). This may require new tools GHG reductions performance should be included in scoring criteria
infrastructure. They should also consider alternative supply chain
for engagement and the sharing of best practice. Base KPIs in of RFP responses.
models (e.g. shorter supply chains, localized supply, resilient and
supply chain should also be redefined to incorporate impact of
flexible supply chains) to identify dual benefits of decarbonization. Companies should consider providing funding and financial
new net zero targets (e.g. customer service, productivity, budgets).
As digital transformation provides a unique opportunity to also incentives to drive suppliers to prioritize net zero programs in the
Companies should establish a reporting framework to manage organization, including KPIs that are financially linked to emissions
deliver carbon reduction solutions or help solve challenges in
supply chain emissions, embedding this into existing processes performance; co-investing in net zero solutions and entering
reducing supply chain emissions, companies should also embed
where possible. They should develop and deliver a plan to improve gainsharing arrangements. This will require companies to create
net zero into existing and future digitization efforts.
depth of visibility across the supply chain, improve data quality sources of finance by building net zero targets into the budgets
Companies should be developing and delivering a strategic and address key data issues and regularly survey and monitor by function, supplier, and manage costs to targets. Companies can
roadmap across the supply chain - including a technology suppliers to understand challenges and requests for support. also explore and engage in supply chain finance programs and new
roadmap - to decarbonize at pace and scale. funding mechanisms.
It may be helpful to segment suppliers and tailor incentives to
maximize impact, considering your influence, spend and scale of
supplier emissions. For example, which suppliers should you
partner with to innovate and co-create? Which suppliers need
education and support? Which suppliers or supplier groups are
most at risk or well-placed to deliver opportunities presented by
the transition?

Who is responsible for delivering Net Zero Supply Chains:

Head of Supply Chain, Head of Procurement, Sourcing Managers & Directors, Procurement function, Microsoft | PwC 24
Sustainability function
 Introduction Overview Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Conclusion
Building Blocks Ambition Governance Strategy Enterprise Supply Chains Innovation Finance Transparency Engagement

Supply chains: Transformed net zero supply chain

✔Build supplier capabilities to deliver net zero ✔Build a connected and smart supply chain
ecosystem amongst suppliers Practical advice for:
The net zero transformation may lead to fundamental changes
to business strategies and models, requiring radically different Supply chains in a net zero world will need to be holistically Companies just starting their net zero journey:
capabilities and competencies from suppliers. This risks leaving efficient, minimizing not just cost and time-to-market, but also
many disadvantaged. Training, capacity building and Start with a top down review of your supply chain bringing
GHG emissions and climate risk. A critical element will be the
engagement across all tiers of supply, will be critical to ensure together Procurement and Sustainability - what do you know
evolution of traditional supply chains toward a connected,
suppliers are able to deliver the transformation and reduce their about GHG emissions hot spots? Where are your challenge
smart, and highly efficient supply chain ecosystem.
own operational emissions, as well as ensuring the transition areas or knowledge gaps?
benefits all and has a positive social impact. Companies should adopt collaborative practices and
If you don’t understand where the biggest GHG impact is
innovative models amongst suppliers. For example,
Companies should look to expand relationships and deliver across your supply chain or what drives that - you should start
establishing regular supplier forums to share learning on net
capacity building programs across the supply chain, beyond there. Also identify if there are key tier 1 suppliers that you can
zero, or digital collaboration platforms to enable suppliers to
tier 1 and focused on those areas with the greatest emissions. engage with immediately to make some significant changes.
develop solutions to net zero challenges or provide net zero
These could take the form of semi-regular working sessions. aligned products and raw materials e.g. zero carbon steel and Then think about how you can adopt new strategic
Partnerships should cover all operational activities, including building materials. engagement approaches including collaboration with industry
strategic change programs as well as trainings and capacity peers who share your supplier base to enable scale. Evaluate
building programs. Companies should also adopt agile methods to rapidly
where new supply chain models can deliver dual benefits of
prototype, test and scale supplier solutions. These should
It is important to ensure a just net zero transformation. decarbonization and performance. E.g. what is the right
be designed to allow effective engagement with the start-up
Therefore the focus of actions and interventions should be to decision over packaging materials? Where can you adopt
ecosystem, who will be a key supplier of net zero solutions to
create the enabling conditions (retraining, reskilling, circular models? How can new technologies optimize
corporates.
redeploying, creation of new decent jobs) for workers and traceability of emissions or incentivize payment for
communities across the supply chain to contribute to the It is important to also conduct scenario analysis on supply performance models?
transition. chains, to understand the physical and transition risks posed
to companies. This can inform decisions on smarter sourcing - Mature companies seeking to be net zero leaders:
for example, where best to work with multiple suppliers to Net zero transformation, as well as incentivizing and
minimize the threat of disruption from net zero policy shifts or supporting suppliers to decarbonize, should be a top strategic
extreme weather events. priority for the procurement and supply chain function.
Leaders will be expected to quickly demonstrate tangible and
innovative changes to supply chain models and procedures to
deliver net zero. For example; sustainable procurement policy
aligned to net zero, fully circular products, emissions
traceability and life cycle assessments embedded as due
process, fully EV target for third party logistics fleets.

Who is responsible for delivering Net Zero Supply Chains:

Head of Supply Chain, Head of Procurement, Sourcing Managers & Directors, Procurement function, Microsoft | PwC 25
Sustainability function
Introduction Overview Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Conclusion
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Supply Chain Case study: Danone

Establishing our goals While farming systems are dynamic and can offer various

“
opportunities to reduce emissions, soil health is a cornerstone of
As a multi-local food and beverage company, agriculture is at the the regenerative agriculture and our climate strategy. Key farming
heart of Danone’s business. 57% of Danone’s carbon emissions are practices such as cover crops, reduced tillage, crop rotations and
This Innovating with farming partners linked to agriculture, making it a key lever of reduction. With reducing energy intensive inputs such as herbicides, pesticides
58,000 farmers worldwide, our supply chain is a key component of and synthetic fertilizers not only build carbon stocks via soil
across our supply chain is critical to our strategy to find solutions to mitigate climate change. sequestration, but also can reduce other GHG emissions such as
Danone’s strategy to achieve net Danone conducted a full scope analysis from our direct business NO2 and methane emissions related to the overall management
operations all the way to our supply chains. This process allowed changes implemented by farms. By reducing the dependence of
zero emissions and build more synthetic inputs, we believe that farms can also increase their
us to establish a Science-Based Target with an intermediate goal
resilient regenerative agriculture of 50% reduction in emission intensity for full scope & 30% resilience and financial autonomy. Overall, regenerative farming
absolute reduction in scope 1 and 2 by 2030. We aim to be net zero systems can, over time, contribute significantly not only to a net
systems. Together, we look forward carbon by 2050. In 2019, we signed the “Business Ambition for zero GHG strategy but to the economic well-being of farms.
to scaling-up our progress through 1.5°C” commitment. Danone is experimenting with distinct farming networks across
creative solutions such as Our supply chain—most significantly farming partners—will be the world. In France, for example, Danone is using innovative
crucial to achieving these goals with over half of our overall GHG financing tools funded annually from one day of sales—
digitalization of complex farming footprint coming from agricultural systems. approximately € 5 million—to help farms overcome initial costs
associated with new management practices. Meanwhile, Danone
systems and new models of finance, Taking action in our supply chain invested $6 million to create a soil health platform in the U.S.
both efforts which we intend to By creating new ways of doing business, Danone has built direct
which benchmarks farms with a data-centric process and creates
continuous improvement plans to support farms in their journey
enhance with our participation in relationships and partnerships with farms in key supply chains to identify opportunities both within cropland and dairy systems.
such as dairy, often using long-term contracts to reduce risk and
Transform to Net Zero. market volatility for both the farms and the company. These long-
Danone is also implementing a variety of financial incentives and
blended financing approaches for farms; including direct
term relationships create a different business culture and assist contractual incentives, leveraging government programs, and
with investments in regenerative farming practices. creating access to low interest loans.
Danone defines regenerative agriculture across three pillars—soil Danone intends to continue to build quantitative proof points with
health, animal welfare and developing the next generation of farming partners of all sizes and types, to measure not just positive
farmers—as it invests in its agricultural supply chains. climate impact, but also assist farms who want to create a new
Regenerative farming, for example, looks beyond just minimizing economic models of food systems. Through these new
Eric Soubeiran harm by way of actual restoration of the soil. We also believe a foundations, we can fully transition our supply chains to
CEO of the Danone Ecosystem Fund, Vice President high level of animal welfare is key to the regeneration of farms and regenerative farming.
results in improved economic sustainability, performance and
for Nature and Water Cycle, Danone competitiveness. Finally, because farmers understand their
operations best, our goal as a partner is to help them succeed so
that they can pass their business on to the next generation.

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Supply Chain Case study: Starbucks

Reducing Carbon in Coffee Supply Chains Evidence shows that farmers participating in C.A.F.E. Practices

“
have higher productivity than the country averages. Suppliers are
Starbucks mission to inspire and nurture the human spirit extends also incentivized financially as they are paid premiums for high-
well beyond its customers, partners and cafes. The company takes quality coffee that is verified as ethically sourced by C.A.F.E.
pride in conducting business responsibly and supporting Practice standards. Through the program Starbucks also provides
At Starbucks, we are deeply rooted in our
communities where they do business, from bean to cup. As a financial incentives to reward those supply chains that show
mission to inspire and nurture the human company that buys approximately four percent of the world’s continuous improvement across C.A.F.E. Practices.
spirit. At the core of this is coffee. We are coffee, sourced from more than 400,000 farmers in 30 countries,
we understand the importance of ensuring a sustainable future of Not only has C.A.F.E. Practices helped us create a long-term supply
committed to sourcing coffee responsibly, coffee for all. of high-quality coffee while positively impacting the lives and
livelihoods of coffee farmers and their communities, but it has also
for the betterment of people and planet, Since 2015, Starbucks coffee has been verified as 99 percent delivered measurable results in reducing the companies’ carbon
while we also work to empower farmers, ethically sourced. The cornerstone of our ethical sourcing footprint. According to Starbucks 2018 Environmental Footprint
approach to buying coffee is Coffee and Farmer Equity (C.A.F.E.) Report developed in partnership with Quantis and World Wildlife
improve their livelihoods and positively Practices, which was one of the coffee industry’s first set of ethical Fund, C.A.F.E. Practices increases in yield per hectare on coffee
impact their communities, thus ensuring a sourcing standards when it launched in 2004. Developed in farms and its zero-deforestation policy reduces Starbucks carbon
collaboration with Conservation International, C.A.F.E. Practices is footprint for coffee by 50%, resulting in a 10% reduction in
sustainable future of coffee for all. Our a third-party verification program that assesses farmer adoption Starbucks overall carbon footprint. By implementing these
ethical sourcing standards, called C.A.F.E. of economic, social and environmental criteria, that if followed, standards, the company has halved what our coffee’s carbon
help sustain and strengthen communities that grow coffee while footprint would have been otherwise.
Practices, has provided a strong foundation maintaining Starbucks high-quality standards, now and into the
toward our company-wide aspiration to be future. C.A.F.E. Practices has built a solid foundation for Starbucks long
term aspiration to be resource positive. Future work is focused on
resource positive. We look forward to The open-sourced program consists of a scorecard with more than going further to reduce our carbon footprint in coffee by
sharing our learnings and working with 200 indicators which are used to evaluate a coffee supply chain’s developing on-farm solutions that equip farmers to succeed
performance. In the area of environmental leadership, it includes during challenges like climate change and helping to spark
others as part of Transform to Net Zero to indicators addressing energy conservation, climate change, solutions for the industry at large.
further our mutual goals of a more conservation area management, water protection, surface erosion
and soil management, amongst many others. In addition, there is
sustainable future. zero tolerance for conversion of natural forest to agricultural
production since 2004.

Michelle Burns
SVP Global Coffee, Tea and Cocoa, Starbucks
Coffee Company

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Building Blocks Ambition Governance Strategy Enterprise Supply Chains Innovation Finance Transparency Engagement

Building Block: Innovation

Achieving net zero will require the deployment of existing low-carbon technologies at
scale, and developing and adopting innovative new solutions and processes, many of
which are at R&D or other early stages of demonstration and commercialization.
Companies need to invest heavily and build innovation into their ways of working to
harness emerging solutions, including new technologies, at pace.

This section is Checklist of key actions:

important for:
Heads of Innovation, Ensure net zero implications are embedded in corporate R&D and innovation
Innovation Managers, function: including net zero as a core objective of corporate R&D/ innovation
strategy; Setting net zero objectives within corporate innovation channels.
Product Developers,
Product Owners.
Provide finance for innovative solutions to net zero by: ringfencing funding
through a dedicated fund or explicitly as a percentage of corporate R&D or innovation
budget and M&A or CVC funds.

Innovate to develop products and services that deliver your business objectives
for net zero by: incentivizing net zero across the product development lifecycle.

Leverage Corporate Innovation to unlock internal barriers to net zero

transformation by: identifying key internal barriers to net zero transformation and
leveraging corporate innovation programs and incubators to find solutions internally
and externally. Rapidly prototype, pilot and roll out solutions.

Build an innovation ecosystem for net zero through partnerships by: actively
monitoring and engaging in partnerships with relevant start-ups and research, and
driving industry and cross industry corporate partnerships.

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Innovation: Developed innovation and technologies to deliver net zero

✔Ensure Corporate Innovation function delivers ✔Provide finance for innovative solutions to net ✔Innovate to develop products and services that
net zero ambition zero deliver your business objectives for net zero
Delivering net zero in ‘hard to abate’ parts of the value chain will Finance is a prerequisite for action, and investment must be made Net zero products and services provide an opportunity for
require deployment of solutions that today are at R&D or early stage at a level commensurate with the challenge in order to rapidly companies to reduce their value chain footprint and also meet
of demonstration. Investment in innovation will be critical to decarbonize over the next decade. growing demand from customers looking to deliver their own net
commercializing these key technologies in the coming one to two zero ambitions. Achieving net zero will require full alignment across
Companies should ring fence funds and invest in innovative
decades. the portfolio, so any new products or services also need to be
solutions to net zero at an amount consistent with other strategic
assessed against this ambition.
To achieve this, companies must put net zero transformation as corporate priorities.
a core objective of its R&D and innovation strategy. This Net zero should be embedded into product development
This investment can be internally-focused at first i.e. providing
includes both a roadmap to tackling the key technological strategy across relevant business functions. Net zero products
grants for innovation and innovation partnerships, and then can
challenges critical to achieving net zero for the organization and and services are a major business opportunity. A robust innovation
evolve to be more externally-focused to create a bigger societal
sector, and identification of wider net zero business model and product development strategy for net zero will curtail the risk
impact and / or to address gaps the organization needs to meet to
“disruptors” including in the start-up ecosystem. In practice this of efforts being haphazard, delayed and costing far more than
fulfil its goals.
will mean embedding net zero considerations into corporate expected.
innovation channels including corporate research, corporate This can be achieved through a dedicated Climate Innovation
Companies can incorporate net zero objectives across the
venture capital, accelerator and/or incubator, and M&A. Fund or explicitly as a percentage of the innovation budget. Some
product development cycle and consider incentives to do so.
of this funding may come from ESG-focused investors, for example
Equally, setting innovation KPIs allows the company to measure Innovation and product development teams should factor in the
through the green bond market.
and monitor the decarbonization impact from innovation. These growing importance of net zero when thinking about future
should focus on a mixture of scaling up approaches and solutions Companies should also develop a framework business case for markets, customer wants and needs, and evolve products and
that are delivering significant, and measurable, emissions net zero investments, and put in place appropriate tools and services to meet net zero requirements.
reductions; alongside a portfolio of higher-potential, but perhaps methodologies to support their product developers effectively,
Unintended social and environmental consequences from new
individually less certain, early stage approaches and solutions. For and consistently articulate the value of net zero projects.
products and services also need to be managed. GHG emissions
example, these could include emissions reduction achievable in a
Lessons learned from net zero investments should be shared savings should be introduced as a key metric for new product
five-year period, or total lifetime emissions reduction potential.
transparently, to bridge the existing knowledge gap on net zero, and service development. Solutions that deliver dual benefit of
This approach balances the desire to achieve quick and important
and enhance the development of future business cases. value creation and decarbonization should be prioritized.
wins, with the need to also explore more innovative approaches to
transformation.

Who is responsible for delivering Innovation for Net Zero: Heads of Innovation, Innovation
Managers, Product Developers and Product Owners. Microsoft | PwC 29
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Innovation: Developed innovation and technologies to deliver net zero

✔Leverage Corporate Innovation to unlock internal ✔Build an innovation ecosystem for net zero Practical advice for:
barriers to net zero transformation System-wide changes require collaboration and coordination
across actors, industries and value chains. Academics are driving
Companies just starting their net zero journey:
To meet the challenges posed by a net zero transformation, whole
new approaches and ways of thinking will be required. Innovation leading thinking and developing technologies at the frontier of Develop a roadmap for change that will embed net zero across
teams are a critical tool which companies have at their disposal to climate technology, and a rapidly growing number of startups in the the innovation function, which needs to include a critical early-
unblock internal challenges with new approaches and solutions. climate tech space present the opportunity for companies to milestone, and quick-win, to secure dedicated funding.
leverage new and disruptive solutions, to diversify into new areas,
Iteration is important, so solutions should be rapidly as well as portfolio digitization. Begin with a high-level review of your innovation function
prototyped, piloted and rolled out at scale by innovation teams, against net zero objectives and milestones. Does your current
to maximize emissions reductions in the short term. Sustainability Companies should build an innovation ecosystem by actively innovation strategy and approach deliver substantive
grants can help support this key aspect of the innovation process. monitoring, then engaging, start-ups and academia which are decarbonization benefits? In what areas can innovation really
relevant for industry, and identifying priority actors for shift the dial on your value chain GHG impact i.e. what are the
Companies should also identify key internal barriers to net zero partnerships, corporate venturing or M&A. key challenges and products / services that present the biggest
transformation that would benefit from a technological, innovative risks and opportunities?
or disruptive approach (e.g. a lack of data or information, or In support of this, companies should refresh their partnership
limited ability to interact with suppliers or customers). strategies, and their build-incubate-invest-buy-partner Mature companies seeking to be net zero leaders:
framework, to align with their updated net zero strategy.
These problems should feed into corporate innovation Leaders will be publicly committing large-scale budgets for net
programs and pipelines to ensure all functions within businesses It is also important to actively seek and drive industry and cross- zero innovation, that are meaningful amounts with an
are aligned and optimized to deliver emissions reductions. industry corporate partnerships to accelerate innovation around associated time-bound impact target (the range of $500m to
‘harder to abate’ or more technologically challenging solutions $1 billion USD is increasingly becoming a market benchmark).
(e.g. sustainable aviation fuels, clean steel, or hydrogen fuel cells). Companies should be scaling innovative solutions over the
It is critical that companies focus on engaging in partnerships to next 1 - 5 years, sharing learnings and best practice with the
take solutions beyond pilot stage rapidly in order to reach the market as they go. Innovative, net zero aligned products,
scale required to realize significant emissions reductions. services and business models should be fundamentally
changing the business to take emissions out of the innovation
journey, with net zero being the design-phase benchmark for
all new innovations. Companies should be actively engaged
with the innovation ecosystem, with defined avenues for
partnerships aligned with strategy.

Who is responsible for delivering Innovation for Net Zero: Heads of Innovation, Innovation
Managers, Product Developers and Product Owners. Microsoft | PwC 30
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Innovation case study: Unilever

Sustainable innovation for a net zero world reduction of up to 20% of the product formulations’ GHG

“
emissions from this alone.
Innovation is essential to enable the transition to a low-carbon
economy – and opening up the business opportunities this will Carbon Rainbow powered innovations
The transformation to Net Zero bring.
Central to this commitment is our ‘Carbon Rainbow’, an approach
requires innovation at every point We’re drawing on our expertise in innovation and R&D to bring to diversify the carbon used in our cleaning and laundry product
people everyday products that have lower climate impacts – when formulations. Non-renewable fossil sources of carbon (identified in
Unilever’s value chain – from the way they’re made and when they’re used. the Carbon Rainbow as black carbon) will be replaced using
captured CO2 (purple carbon), plants and biological sources (green
we source materials and operate Sustainable innovation and design are also vital to the growth of
carbon), marine sources such as algae (blue carbon), and carbon
our business. The latest “Who Cares, Who Does” report by
factories, to the way design products Kantar/GFK indicates that 67% of consumers surveyed across the
recovered from waste materials (grey carbon). This transformation
through the Carbon rainbow will take time but we have already
and deliver them to the consumer, world are actively trying to buy products produced in an
put it in action through some innovations:
environmentally friendly way.
and even the way they are used in Purple carbon: New technologies, like carbon capture, offer huge
the home. Our responsibility as Eliminating fossil fuels from cleaning products potential as a source of renewable or recycled carbon for
We apply a lifecycle approach to our products to identify where the ingredient production. Soda ash is a key ingredient in laundry
business leaders is to drive that biggest impacts lie and help us understand how we can reduce detergents due to its ability to help cut through grease and soften
innovation and radical thinking in a them. The lifecycle analysis shows the need to have different water. We are partnering with Tuticorin Alkali Chemicals (TAC) in
approach to reducing carbon across the various divisions of southern India and Carbon Clean Solutions (CCSL). They have
way that can open up new Unilever. developed technologies to capture the CO2 from their use of
opportunities for zero-carbon growth energy in their production processes and turn it into soda ash.
In our Home Care business, the chemicals used in our cleaning
with products and services that meet and laundry products make up the greatest proportion of their Green Carbon: When it comes to surfactants – the compounds
carbon footprint (46%) across their lifecycle. Most cleaning and that create foam and allow cleaning products to work by breaking
the needs of today’s and future laundry products available today contain chemicals made from down oil, grease and soil – there are few sustainable alternatives
out there. But we’ve made a breakthrough with one of the world’s
generations. fossil fuel feedstocks, a non-renewable source of carbon.
leading biotechnology companies – Evonik Industries. They’re
On September 2nd 2020, Unilever announced that it will eliminate producing Rhamnolipids – a biosurfactant made from naturally
100% of the carbon derived from fossil fuels in its cleaning and occurring fermentation and which is 100% biodegradable and
laundry product formulations and replace it with renewable or renewable. It gives superior cleaning performance and mildness
recycled carbon by 2030. This move to renewable or recycled on skin. We are working towards building large-scale production of
sources of carbon for these chemicals is a deliberate shift away this ingredient, and it’s already in some of our dishwashing
Marc Engel from the fossil fuel economy. It is an important step towards the products in Chile and Vietnam.
Chief Supply Chain Officer, Unilever company’s pledge of net zero emissions from its products by 2039.
Indeed, by using renewable and recycled carbon in our cleaning
and laundry product formulations, we are reducing the extraction
of fossil fuels that would otherwise add to the atmospheric carbon
burden through ingredient biodegradation. We are expecting a

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Innovation case study: A.P. Møller - Maersk

Responding to the call for innovation Our R&D milestones

“
The shipping industry contributes 2–3% of the world’s greenhouse In addition to biofuel, Maersk is also looking into other possible
gas emissions. Maersk has had a strong focus on climate change lower emission sources such as alcohol. Because of the long asset
and energy efficiency for many years, achieving close to 42% lifecycle of container vessels, to reach the 2050 ambition there
We have begun a journey towards reductions in relative emissions in 2019 compared to a 2008 must be a commercially viable net-zero vessel at sea already by
having net-zero CO2 emissions from baseline. But improving efficiency is not enough. 2030. Our R&D strategy includes the following milestones:
our own operations by 2050. This is In 2018, we committed to achieve net zero emissions from our own 2020-23: Explore and invest in the most likely future fuels
operations by 2050. The roadmap to deliver on this ambition
an important ambition and one we covers three broad workstreams, technology development,
2023-27: Vessel design, supply chain pilots
can only deliver on in collaboration market acceleration, and policy engagement, to develop the 2027-30: First vessels in production
carbon-neutral fuels for container shipping that do not exist today,
with many other stakeholders. and at the same time to support market demand and the 2030: First carbon-neutral vessel in business viable operation
regulatory framework to incentivize the use of carbon neutral 2030-50: Change fleet to carbon-neutral vessels
fuels.
The main challenge is not at sea but on land. The technological
changes inside the vessels are minor compared to the massive
innovative solutions and fuel transformation that must take place
in the fuel supply chains to produce and distribute entirely new
energy sources. To make this happen, we are working in coalitions
across sectors and partners including customers, technology
developers, researchers, investors, and industry peers, for
example the Getting to Zero Coalition and the Mærsk Mc-Kinney
Møller Center for Zero Carbon Shipping.
We are seeing growing customer interest in low- or zero-carbon
container transportation, and at least 60 of our 100 most
important customers have set ambitious carbon emission
reduction targets for the next decades. Some of Maersk’s largest
customers are taking part in the innovation projects and pilots to
test the future fuels. In spring 2019, a pilot with second-generation
biofuel was successfully completed. Following that, we launched
Søren Skou the first carbon-neutral ocean shipping product, Maersk ECO
Delivery, to our customers.
CEO, A.P. Møller - Mærsk A/S

Microsoft | PwC 32
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Innovation case study: NIKE, Inc.

At Nike, Inc., we believe we must all come together to have a more

“
positive impact on our planet. As creators it’s our obligation to
consider how we source, make, use, return and then reimagine the
products we design.
When it comes to protecting the Our sustainable design ethos is to design products with better
playing field we share—our planet— materials, made with fewer resources and assembled with the end
in mind. We believe sustainable technologies can help unlock new,
there isn’t a moment to lose. That’s fresh perspectives and create products that have a lighter
why we’re coming together as global environmental impact.

leaders to create climate action In 2020, Nike introduced a footwear collection made from our
“space junk,”- scrap material from factory floors - and transformed
solutions. If we act now, and work it into a radical design, with circularity as the core inspiration.
Every detail of the Nike Space Hippie footwear capsule collection,
together, we can drive meaningful from material choices to methods of make to packaging, was
progress toward a more sustainable chosen with consideration for its environmental impact, adding up
to the lowest carbon footprint score for Nike footwear.
future. We’ll be relentless in our
The concept began in 2017 when new research allowed Nike to
pursuit to help ensure a healthy pinpoint CO2e emissions of individual materials and
planet for generations of athletes to manufacturing processes in putting together a shoe.

come. Space Hippie Flyknit yarns include at least 85% rPoly – made from
recycled plastic water bottles, t-shirt and yarn scraps – creating
engineered knit uppers with an expressive sustainable aesthetic.
Each of Space Hippie’s four silhouettes provide a unique fit option
— traditional laces, lace-less and Flyease — for the lifestyle of
people on-the-go. Crater Foam tooling uses 15% Nike Grind rubber
and is combined with 100% recycled ZoomX foam scraps for a
more sustainable, lightweight and responsive feel during city
exploration.

Andy Campion
Chief Operating Officer, NIKE, Inc.

Microsoft | PwC 33
 Introduction Overview Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Conclusion
Building Blocks Ambition Governance Strategy Enterprise Supply Chains Innovation Finance Transparency Engagement

Building Block: Finance

Business transformation for net zero requires investment across several building blocks
and on a scale commensurate with investment in other strategic corporate priorities. It
also requires embedding net zero value creation and erosion considerations across all
corporate finance functions including operations, financial planning, business strategy &
development, facilities, corporate venture investing, and treasury. The net zero corporate
investment strategy should ensure alignment and complementarity across priorities
required to deliver business transformation.

This section is Checklist of key actions:

important for:
Develop a net zero corporate investment strategy by: assessing assets under
CFO, CIO, Head of ownership/control; analyzing value chain opportunities/ risks; developing a net zero
Corporate Finance, investment portfolio and working closely with business strategy & development and
Head of Venture Capital, sales teams to understand how the portfolio can be realized and its potential impact.
Finance Managers,
Business Strategy & Embed net zero considerations across Corporate Finance function by:
establishing net zero criteria for economic assessments and integrating net zero
Development, Facilities Finance Transformation efforts, including into Treasury, Risk, Audit, M&A and
and Operations. strategic and financial planning.

Identify and prioritize financing mechanisms and sources by: evaluating internal
revenue raising and external financial options for financing net zero related
transformation efforts.

Embed net zero into corporate venture capital and corporate accelerators/
incubators by: setting net zero as a strategic investment area for corporate venture
and start-up investment.

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Building Blocks Ambition Governance Strategy Enterprise Supply Chains Innovation Finance Transparency Engagement

Finance: Financing the net zero transformation

✔Develop a net zero corporate investment strategy ✔Embed net zero considerations across Corporate Finance Practical advice for:
The net zero transition will require companies to proactively function
minimize value erosion and maximize value creation impacts.
Companies just starting their net
Achieving net zero will require it to sit at the heart of the business and for all decisions to
Business transformation means a new way of doing things, which in be looked at through a net zero lens.
zero journey:
turn will require investment, and a re-engineering of the investment Begin by undertaking an assessment of your
appraisal and decision making process to factor in transition The Finance function, led by the CFO, will need to holistically incorporate net zero
financial exposure to climate risk to enable
impacts. impacts on value creation and destruction, and risk management more broadly.
the CFO and Finance leads to understand the
Finance transformation efforts, therefore, should look to embed net zero as a key
Companies should develop a net zero aligned corporate value drivers of net zero and the company’s
business and value driver.
investment strategy; considering five key elements: current status, and improve investment
This will include embedding net zero impacts into business processes with respect to decision-making.
● Operational assets: quantify investment needs and return on tax, operational risk management, strategic planning, financial planning, transactions,
investment for GHG reduction levers, estimate asset value Undertake a high level assessment of your net
reporting and compliance, internal audit, investment and appraisal processes,
creation/destruction on assets (infrastructure, fleets, products, zero investment needs, and identify key
analysis of product lines and pricing, and business partnering.
technology). Finance function processes that need to
● Value chain opportunities: assess investment needs Treasury, Risk, Audit, Tax, Operations, and M&A functions will need to expand their incorporate net zero implications. Engage
including funding for supplier engagement and support new mandates and work closely with Sustainability and wider technical support. with the CFO and senior Corporate Finance
technologies. stakeholders, and incorporate into strategic
● Identify actions that require dedicated (new or re-
✔Identify and prioritize financing mechanisms and sources planning and financial planning.
allocated) funds i.e. finance for R&D and innovation (see Internal revenue raising and external financing options will provide finance options to
Innovation building block); finance to support a just transition
Mature companies seeking to be net
deliver the investment strategy.
for employees through investment in up/re-skilling; new zero leaders:
product/service development costs; finance to acquire new Internal options include an internal carbon price with fees pooled and linked to a
central fund for net zero investment. External options include: PPPs for capital Leading companies will have holistically
critical capabilities/talent; investment in offsets or insets for integrated net zero implications into Finance
carbon removals. projects (Concessional Green Loans; Special Purpose Vehicles for specific net zero
investments; and government subsidies, incentives and/or rebates to implement Function transformation efforts.
● Investment portfolio: assess financial materiality of net zero
transition risk across investments, identify green investment net zero aligned activities. Leaders will be unlocking finance in the
opportunities (including nature-based solutions) and required billions to enable enterprise and supply chain
✔Embed net zero into corporate venture capital and corporate transformation, raised through internal and
divestments.
● Companies may wish to consider and evaluate the accelerators and/or incubators external (public and private) mechanisms.
potential of company acquisitions to support business The entrepreneurial ecosystem will generate many of the disruptive innovations critical Good practice internal efforts include
rationalization and inorganic growth to deliver net zero for realizing net zero within specific sectors. integration of a robust carbon price into
transformation. operations and strategic decisions including
Corporate Venture Capital should evaluate potential net zero investment new investments and risk management, in
Development and implementation of the net zero corporate opportunities, and consider embedding net zero as a strategic investment area for addition to a pooled levy to fund innovation.
investment strategy should be driven by an inclusive and early stage investment where there is scope for value creation and emissions
structured process that includes the identification and setting of reduction. This will enable companies to identify, support and scale key
objectives; monitoring, evaluation and learning; and regular transformative technologies and businesses strategically aligned to their organization.
milestones for progress assessment and review. Many of the disruptive solutions for net zero are emerging from the entrepreneurial
ecosystem.

Who is responsible for delivering Finance for Net Zero: CFO,COO, CIO, Head of Corporate Finance, Head of Venture
Capital, Finance Managers Microsoft | PwC 35
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Finance Case study: Microsoft

intention of creating a virtuous cycle of carbon reduction. The fee We will primarily invest in climate solutions that have been

“
has funded the development and deployment of new innovations developed and need capital to scale in the market. We aim to
in energy efficiency technologies and strategies, the purchase of make investments that will accelerate existing climate solutions
renewable energy and carbon removal credits, and programs such and create new technologies. We’ll invest directly in companies as
We’re making investments in climate as AI for Earth. well as investment funds, to scale new innovative solutions in the
technologies because the best available market, to demonstrate the viability of new technologies, and to
Currently this fee is $15/metric ton and covers all scope 1, 2 and 3
science says that we must, but also because of partner with other investors to meet the world’s climate
emissions. We charge a lower price per ton for scope 3 and we will
objectives. An investment will be prioritized if it ensures
incredible customer demand for these digital phase in increases over time until all our scope 1, 2, and 3
developing economies and underserved communities will benefit
solutions. Through our targeted investments in emissions are charged the same rate. This will both increase
from the climate solution.
incentives across the company to reduce all scope 3 emissions and
innovation via our Climate Innovation Fund, we
fund the added work to reduce our own scope 3 emissions and Microsoft has already begun making investments to advance our
aim to ensure that the capital that we put out is invest in carbon removal activities. sustainability objectives. In July, we announced a $50 million
as additional as possible, drives climate equity investment in Energy Impact Partners’ (EIP) global platform for
Solving our planet’s carbon issues will require companies and
and puts us closer to a net zero future. innovation of new technologies to transform the world’s energy
governments not only to reduce their own operational footprints,
and transportation systems, the two sectors that account for the
but to invest in innovation in the broader market to deliver the
Dr. Lucas Joppa majority of greenhouse gas emissions. We followed that with a $30
necessary carbon reduction and removal solutions. That’s why a
million investment in Closed Loop Partners’ funds, announced in
Chief Environmental Officer, Microsoft significant part of our endeavor involves putting Microsoft’s
August, to help accelerate the infrastructure, innovation and
balance sheet to work to stimulate and accelerate the
business models for supply chain digitization, e-waste collection,
development of sustainability technologies such as carbon
food waste reduction, and recycling industry products to build a
removal. Our Climate Innovation Fund will invest $1 billion over
more circular economy at scale . In September, we announced a
While the world will need to reach net zero carbon, those who can the next four years into new technologies and innovative market
$10 million investment in Emerald Technology Ventures’ Global
afford to move faster and go further should do so. That is why solutions. We understand that this is just a fraction of the
Water Impact Fund, a collaborative venture capital initiative to
earlier this year, Microsoft announced its intent to become carbon investment needed, but our hope is that it spurs more
support sustainable innovation in the water sector. Taken
negative by 2030. In addition, Microsoft committed that by 2050, it governments and companies to invest in new ways as well.
together, these early partnerships signal our commitment to three
will remove from the environment all the carbon the company has key pillars of Microsoft’s sustainability strategy – carbon, waste,
We will primarily deploy this capital in two areas: (1) to accelerate
emitted either directly or by electrical consumption since it was and water.
ongoing technology development by investing in project and debt
founded in 1975.
finance; and (2) to invest in new innovations through equity and
It’s clear that progress and innovation across all of these pillars will
This kind of transformation requires not only bold goals and debt capital.
be needed to mitigate the climate challenge at Microsoft and
organizational commitment, it will require new financing models around the world. In particular, through intensive and directed
We’ll focus our funding on investments primarily based on four
inside the company to accelerate progress as well as the investment, we believe the price of carbon reduction and removal
criteria: (1) strategies that have the prospect of driving meaningful
deployment of capital to accelerate innovation outside our four technologies can be reduced while maturing the market. We’re
decarbonization, climate resilience, or other sustainability impact;
walls as well. making a bet on certain technologies that don’t exist at the scale
(2) additional market impact in accelerating current and potential
Microsoft has utilized an internal carbon fee since 2012. Unlike solutions; (3) relevance to Microsoft and our customers in or price point we need them. If we want to get them, we need to
some other companies, our internal carbon fee isn’t a “shadow delivering technologies we can use to address our current and start investing. This is how innovative financing can help deliver
fee” that is calculated but not charged. Our fee is charged to each future emissions; and (4) consideration of climate equity, including both nature-based and engineered solutions at a price point and
division in our business based on its carbon emissions, and the for developing economies. scale we need.
funds are used to pay for sustainability improvements, with the

Microsoft | PwC 36
 Introduction Overview Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Conclusion
Building Blocks Ambition Governance Strategy Enterprise Supply Chains Innovation Finance Transparency Engagement

Building Block: Transparency

Companies will need to provide transparent and balanced reporting on progress against
net zero ambition, including pace of business transformation, implementation of strategy,
and progress against KPIs including actual emissions reductions achieved. This promotes
accountability for transformation, drives progress and informs relevant stakeholders,
including investors, enabling them to accurately price risk.
This section is Checklist of key actions:
important for:
Heads of Communicate your net zero strategy and what it means for the future of the
business by: disclosing how net zero is embedded into business strategy and
Communication, Public transformation in, for example, annual financial reports / 10-K filings, considering the
Affairs & Corporate recommendations of the FSB TCFD.
reporting, Sustainability
& CSR managers.
Disclose progress against net zero strategy by: defining and reporting on net zero
KPIs, calculating and disclosing societal and environmental impacts, reporting on net
zero incentives.

Disclose with clarity and transparency by: reporting publicly and

comprehensively, highlighting areas for improvement, articulating barriers to
progress, highlighting innovation and actions to enable conditions needed to achieve
effective, just, and sustainable climate solutions, considering external, independent
review of net zero KPIs and results.

Microsoft | PwC 37
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Transparency: Communicating action

✔Communicate your net zero strategy and what it local communities and diversity and inclusion). These disclosures
Practical advice for:
means for the future of the business should also be quantified in monetary terms where possible.
Companies should report on how staff at both senior and junior Companies just starting their net zero journey:
Stakeholders, including investors, want to see evidence of the real
levels are engaged and incentivized to deliver on the net zero It is critical for companies to set out their ambition and the
action that has been taken by the business to embed net zero into its
strategy throughout the company. This may include financial and rationale for the chosen level of ambition in the context of the
business model, operations and decision making. Transparency and
non-financial incentives (e.g. remuneration, employee awards, business. Companies will not be expected to have fully
better access to data will also enhance how climate-related and/or
performance grades). developed their plans nor have all aspects of a net zero strategy
net zero risks are assessed, priced and managed, allowing
companies to more effectively measure and evaluate their own ✔Disclose with clarity and transparency embedded across the entire organization. However, the
risks, those of their supplies, and of their competitors. progress made, as well as realistic expectations for the short
Clear and transparent disclosures are critical for business and medium term, should be articulated.
Companies should be disclosing how net zero is embedded into credibility. For net zero it is especially important as companies need
business strategy and transformation in their annual financial It may be helpful to complete a rapid gap analysis assessment
to be aware of avoiding ‘greenwash’. against the TCFD recommendations and develop a plan of what
reports / 10-K filings. Practically, this translates to the disclosure of
activities and outputs from buildings blocks on Ambition, Strategy, Disclosures should: to disclose, when and through which communication channels.
Enterprise Transformation and Supply Chains. An important step within the above will be to ensure that
● Provide clear and consistent messages and data points existing external disclosures of governance arrangements
The recommendations of the FSB TCFD provide good practice (along with basis of reporting), enabling those outside the incorporate considerations of net zero. It may also be helpful to
guidance in disclosures to stakeholders on the financially material organization to form a view and compare across organizations. have workshops or learning sessions on net zero with those
impacts (including risks and opportunities) of climate change to responsible for all forms of external communication.
● Highlight progress being made and - critically - areas for
the business.
improvement to ensure disclosures are balanced and to give Mature companies seeking to be net zero leaders:
✔Disclose progress against net zero strategy confidence that the organization is fully aware of its impacts
and is honest and transparent about progress towards net For mature companies it is expected that many net zero
Setting targets with milestones over time demonstrates an zero. activities and initiatives will be taking place therefore
organization's accountability and commitment to its net zero disclosures should focus upon what is ‘material’ to the
transformation. Clear presentation of progress towards targets is ● Articulate barriers to progress across the company, value
company as well as other stakeholders. Companies should look
evidence that transformation efforts are taking place at the pace chain and ecosystem, and structural changes required to
at the inventory of all primary external disclosures, including
and scale required to deliver the ambition. enable net zero transition.
investor presentations and roadshows as well as regulatory
Companies should therefore define and report external net zero ● Include focus on innovations as well as actions to help disclosures, and to consider the need to include or exclude
enable the conditions needed to achieve effective, just, and relevant aspects of net zero implementation and outcomes
KPIs (at minimum scope 1,2 and 3 GHG emissions, both absolute
sustainable climate solutions for people of all gender, race, achieved to date.
and intensity) and consider further KPIs beyond GHG impact. The
KPIs should have specific, quantifiable and science-based short, or skills. Companies should have clearly defined rationale and objectives
medium and long term targets set against them and the financial External, independent review is also advised as it enhances for utilizing external assurance. This will help ensure that the
implication behind each KPI should be defined. credibility of disclosures. It provides additional confidence to right level of assurance using the right assurance provider is
management/ senior leaders on the organization’s performance selected.
It is also important to calculate and disclose the societal and
environmental impacts of net zero transformation, going beyond over time and to external stakeholders on the company’s progress
climate impact and considering impacts on other material and plans.
sustainability issues (e.g. water, biodiversity, plastics, human
rights,

Who is responsible for delivering Net Zero Transparency and Accountability: Heads of
Communication, Public Affairs & Corporate Reporting; Sustainability / CSR managers. Microsoft | PwC 38
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Transparency case study: Mercedes-Benz AG and Microsoft

Mercedes-Benz AG Microsoft
In our sustainable business strategy, we have set ourselves the overall goal of making the IReal progress requires real transparency. Microsoft has long been committed to transparency on
mobility of the future carbon-neutral. To measure our effectiveness we’ve established a climate and carbon performance, reporting on climate performance to CDP and on our CSR reports for
sustainability KPI system. nearly a decade.

Within the context of our “Ambition 2039” and our strong commitment to the Paris Agreement Microsoft embraces transparency on its performance. Reporting on progress – as well as challenges – is
on climate protection, we combine both internal and external performance reviews in our a responsibility Microsoft has to its shareholders and employees, and is also an opportunity to make it
management approach. In line with this approach, we derive measures for ensuring that we easier for others to find their way from ambition to action more easily and efficiently. Given its more
reach our goals and assess our implementation of these measures. Each unit conducts internal ambitious carbon goals announced this year, to become carbon negative, this reporting is even more
reviews in its area of responsibility at short intervals throughout the year. The external review important. As such, Microsoft will now deliver a Sustainability Report annually.
consists of an annual audit of a selection of our corporate goals and our attainment of them
that is conducted by an auditing company. In addition, the Science Based Targets Initiative In addition, Microsoft is practicing transparency in disclosing its roadmap, and incremental steps along
(SBTI) monitors and confirms the conformity of our path toward goal attainment with the Paris the way. A key example is the issuance of a new request for proposal to source carbon removal
Agreement on climate protection. solutions that are net negative and verified to a high degree of scientific integrity. To ensure that our
funding will maximize carbon being taken out of the atmosphere, we are doubling down on scientific
Not only does our annual Sustainability Report outline our strategic goals and measures, it also verification of each project, and using this RFP to harvest and share best available science and market
documents current actuals. Starting with the report 2019 we are including a reference table for intelligence on carbon removal. Microsoft has committed to publicly sharing the learnings from this
the TCFD disclosure. For climate-related activities and the related performances, we also process to accelerate carbon removal efforts of others.
disclose via CDP Climate Change questionnaire.
This transparency carries through to products. Microsoft introduced a new feature, the Microsoft
As far as individual vehicles are concerned, we publish a “360° Environmental Check” in which Sustainability Calculator. It provides Azure cloud customers transparency into their total carbon
we summarize the results of the life cycle assessment in material resources, energy emissions – Scopes 1, 2 and 3 – resulting from their cloud usage.
consumption and CO2 emission.
In addition, Microsoft committed to playing a role in accelerating greater transparency beyond its four
In the environmental workshop at our annual Daimler Sustainability Dialogue, we conduct in- walls. It stated it will support strong industry-wide standards for transparency and reporting on carbon
depth discussions with environmental institutes and NGOs. Throughout the year, there are emissions and removal and apply these to itself. To that end, Microsoft has a certified Science Based
numerous discussions and direct exchanges with our Board of Management on the subject of Target and is also a signatory to the United Nations’ 1.5-degree Business Ambition Pledge.
climate protection. In addition, the feedback we continually receive from government and the
public lets us know how the sustainability goals we have set for ourselves are being perceived
and evaluated.

The attainment of our fleet’s CO2 emission targets in EU has already been a component of the
remuneration of our Board of Management for years now. In 2020 we will further differentiate
this system and expand it to involve the entire senior management structure, from the
department heads on up. We expect this process to motivate everyone involved even more
strongly to reach the sustainability goals we have set for ourselves.

Microsoft | PwC 39
 Introduction Overview Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Conclusion
Building Blocks Ambition Governance Strategy Enterprise Supply Chains Innovation Finance Transparency Engagement

Building Block: Engagement

Companies will need to engage and influence stakeholders across a variety of ecosystems
to deliver emissions reductions at pace and scale, and create the enabling conditions for
an accelerated transition. Leading companies also have an important role to play in
inspiring and spurring greater action through demonstration, cooperation, collaboration
and sharing of information with key stakeholders.

This section is Checklist of key actions:

important for:
Head of Partnership &
Develop a net zero-aligned stakeholder engagement strategy by: identifying
Engagement, Corporate critical stakeholders to engage on the net zero transformation journey; developing
Affairs, Corporate Social tailored content and using innovative approaches to engage stakeholders.
Responsibility,
Communications,
Marketing, Brand Inspire others and lead by example by: mobilizing and convening stakeholders to
owners, Climate & share experiences; engaging with climate and net zero initiatives and platforms;
demonstrating progress through consistent absolute reductions and consideration of
Sustainability experts. social alongside environmental impact.

Influence value chain partners and customers by: listening to customer and
partner experiences; educating customers about their impact; collaborating with
upstream and downstream partners to deliver systems change.

Use influence to promote policies that enable and accelerate progress by:
advocating for net-zero aligned policies including a focus on actions that help enable
the conditions needed to achieve effective, just, and sustainable climate solutions for
people of all gender, race, or skills; engaging with civil society and NGOs; using brand
communications and marketing campaigns to encourage customers and consumers
to reduce emissions.

Microsoft | PwC 40
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Building Blocks Ambition Governance Strategy Enterprise Supply Chains Innovation Finance Transparency Engagement

Engagement and influence: Enhancing the pace and scale of net zero action
✔Develop a net zero-aligned stakeholder engagement To lead by example, it is critical for companies to demonstrate progress
Practical advice for:
strategy through consistent and absolute reductions beyond scope 1 and 2
emissions, company wide and by geography, business unit, and product Companies just starting their net zero
Net zero requires collaboration across all stakeholder ecosystems. It is and services.
important that shareholders and investors are ‘bought in’ to support
journey:
transformation efforts; and that customers, NGOs and civil society trust ✔Influence value chain partners and customers Start by defining your ecosystem. Who are
companies’ commitments to transformation else run the risk of reputational In many sectors, the most material emissions are in product use and end of your key stakeholders? What does net zero
damage and greenwash. product life. Engaging, educating and supporting customers to change mean to, and imply for, each stakeholder
Companies should assess the landscape to identify critical stakeholders behaviors; and working extensively across value chain partnerships is crucial constituency? What are your stakeholders’
to engage on the net zero transformation journey, including investors, to achieve net zero. expectations, needs, and incentives? Where do
employees, customers, governments, NGOs and civil society. Companies you operate and how might that alter your
Product owners, environmental specialists, communications, marketing engagement approach? What material will you
need to develop tailored and proactive engagement strategies based on and brand managers should work together to educate customers about
stakeholder requirements and expectations. Shareholders and investors develop and share to influence your
their impact when using products or services. They can do this by stakeholders and attain buy-in? Which climate
will be interested in your transformation strategy, approach and metrics identifying ways to reduce impact and leveraging brand and marketing
(economic, environmental and social). While employees, customers, NGOs initiatives are most relevant to you? What
channels to encourage behavior changes. levers are available to you to engage value
and civil society will be interested to understand if you are delivering a
socially-just transition, robust results, and whether you are on track to Companies should collaborate extensively with upstream and downstream chain partners, customers, governments,
meet your commitments. partners to enable transformation across the whole value chain including a. NGOs and civil society? Use this exercise to
focus on circular models of consumption. Support should be provided to inform your engagement strategy, and identify
Companies should adopt innovative approaches to engage stakeholders SMEs to enable inclusion. initiatives you would consider joining as a first
on net zero and to showcase results. For example, through targeted action.
outreach such as events showcasing results, creation or use of virtual ✔Use influence to promote policies that enable and
platforms for information exchange, or newsletters to share knowledge. accelerate progress Mature companies seeking to be net
zero leaders:
✔Inspire others and lead by example Governments, NGOs and civil society are all important in creating the drivers
and enabling conditions for companies to transform to net zero: Leaders need to be driving initiatives, inspiring
The pace and scale of the challenge requires a focus on action and tangible others to take action, and openly sharing their
Governments want to understand what the business community needs to
emissions reductions. Cooperation and sharing learnings and best practices experiences and lessons learned. Crucially
unlock emission reductions at pace and scale; and NGOs and civil society are
enables quicker identification and scaling of solutions, and greater overall leading companies need to ‘walk the talk’ by
pushing for greater ambition and green policies in the midst of turbulent
mitigation of emissions. demonstrating absolute GHG reductions
global events and politics.
Companies should use their size and influence to mobilize and convene across their value chains and engaging a
stakeholders across ecosystems, including peers, to share best practice, Companies should advocate for policies that create the market conditions diverse range of stakeholders to identify ways
learn, address common barriers and structural challenges. They should to accelerate emissions reductions and create wider social impact, and to deliver a just transition and to create the
jointly invest in these opportunities and develop publicly available provide the evidence to support these policies. Companies should engage conditions for further and faster emissions
research, roadmaps, data, tools and low carbon solutions. with civil society and NGOs to leverage their influence to create political reductions.
momentum for policy change. Companies should leverage their brand
While commitment initiatives are important, companies should also communications channels and marketing campaigns to encourage
engage in initiatives and platforms that focus on action such as REBA, broader civil society to adopt more sustainable behaviors.
RE-Source, REscale, 100s, etc.

Who is responsible for delivering Engagement for Net Zero: Head of Partnership & Engagement, Corporate Affairs,
Corporate Social Responsibility, Communications; Marketing, Brand owners; Climate & Sustainability experts Microsoft | PwC 41
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Engagement Case study: Natura &Co

Our commitment Engaging local communities

“
Natura &Co is a global, purpose-driven, multi-channel and multi- With this, we are seeking to broaden relations with the
brand cosmetics group which includes Avon, Natura, The Body communities supplying biodiverse ingredients in the region,
Shop, and Aesop. Each of the four companies that form the group underscoring the fact that it is economically feasible to reconcile
At Natura &Co, we believe we can’t is committed to generating positive economic, social, and production and keeping the forest standing. The lower the
run a business on a dead planet. We environmental impact. deforestation in the area, the higher the financial return from
environmental services for the agricultural producers.
will address the climate crisis by In June 2020, we published our Commitment To Life for 2030, a
comprehensive sustainability plan to address some of the world’s The RECA cooperative, which has supplied ingredients for Natura’s
working on science-based solutions most pressing issues. Ekos product line since 2001, is located in one of the regions in
to become a carbon neutral business Creating circular carbon
Brazil under the greatest pressure from deforestation, both by
livestock breeding and by the exploitation of timber. For this
by 2030. In order to achieve this, we reason, in 2013 the area was chosen for the pilot project,
To combat deforestation in the Amazon and to encourage family
will engage with a broad range of agricultural producers to conserve local vegetation, we developed developed in partnership with the sustainable development body
a first project that pays for carbon offsetting in our production Idesam (Instituto de Conservação e Desenvolvimento Sustentável
stakeholders and together, we will chain, known as Circular Carbon (or carbon insetting). The project da Amazônia).
find solutions that create a wider pays the families of smallholders not only for the purchase of raw The land and farms involved in the RECA cooperative project have
materials and benefit sharing, but also for environmental significantly helped conserve the forests. The work has helped
positive impact. Businesses, conservation services. strengthen the local economy and protect the native forest areas.
governments, civil society, and the The project was undertaken initially in partnership with The program creates a virtuous circle because it gives the
ingredients suppliers additional income and increases the
scientific community must act reforestation cooperative Cooperativa de Reflorestamento
resilience of the chain.
Econômico Consorciado e Adensado or RECA, consisting of
together, but we must be even more agricultural producers in Porto Velho (Rondônia) and surrounding Between 2013 and 2016, the deforestation rate in the surrounding
ambitious and act with urgency regions in the states of Acre and Amazonas. Through the payment area averaged 1.9% per year, while the 126 properties
for environmental services, a practice known as carbon insetting, participating in the project had a rate of 0.93% - less than half the
before it’s too late. This is an Natura is seeking to work with communities on three integrated deforestation rate of its surroundings. An area equivalent to
important part of our Commitment to fronts: approximately 190 football fields pitches was conserved during the
● Ingredients purchases period, avoiding 104,000 tons of carbon gas emissions in the
Life vision for 2030. atmosphere.
● Benefit sharing for access to traditional knowledge/genetic
heritage The payment for this environmental service from 2013 to 2016 was
● Forest conservation equivalent to the amount Natura &Co paid RECA for the
Roberto Marques
ingredients it supplied during the period (around US$500,000).
Executive Chairman of the Board and Group CEO,
Natura & Co The goal is to improve the resilience of the chain and reduce
RECA’s deforestation rate to zero, as well as to replicate this model
in other communities in the Amazon region.

Microsoft | PwC 42
Introduction Overview Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Conclusion
Building Blocks Ambition Governance Strategy Enterprise Supply Chains Innovation Finance Transparency Engagement

Conclusion

This document provides a ‘blueprint’ for a company starting out on, or on their net zero journey. The
framework outlines the key building blocks for business transformation needed to deliver net zero. It is
intentionally holistic, wide ranging and sector neutral, such that it can be engaged with by any company.
The next step is for companies to apply the framework in a way that works for their business. Here are some
ways companies can use this framework:
● Deploy the building blocks checklists as a diagnostic tool to help identify current strengths and
improvement areas, and where to direct effort and resource.
● For companies just starting their net zero transformation journey:
Establish a cross functional working group to follow our practical advice for each building block; which
would include
– An articulation of ‘net zero’ and what it means in your business context
– A high level market assessment to highlight strategic risks and opportunities
– Briefings to share results and establish a roadmap of key actions that should cover:
– Oversight and management of net zero from the highest levels of the organization
– Review of Corporate Strategy, Innovation Strategy, Operating Model, Supply Chain Strategy and
Investment Strategy to determine quick wins for embedding net zero and key next steps and
business owners
– Review of existing and priority enterprise and supply chain transformation programs to ensure net
zero is embedded in programs underway
● For mature companies:
Deep dive into key building block areas you know you need to focus on. Read the framework and ensure
there is a program of work, with designated resource to deliver against each of the action points.

There is an immediate need for companies to move from ambition to action and take a
pragmatic approach to transformation to deliver on next zero in the next 1-2 business cycles

Microsoft | PwC 43
 Introduction Overview Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Conclusion
Building Blocks Ambition Governance Strategy Enterprise Supply Chains Innovation Finance Transparency Engagement

Acknowledgements
PwC and Microsoft would like to acknowledge the valuable contributions of the
following people in the development of this document:

Lead authors
Dr Celine Herweijer (PwC UK), Abigail Paris (PwC UK), Madeleine Karn (PwC UK)

PwC project team

Benjamin Combes (PwC UK), Kiran Sura (PwC UK), Marisa Donnelly (PwC UK),
Helen Edwards (PwC UK), Frankie Howland (PwC UK), Steve Jennings (PwC UK),
Alyssa Martin (PwC US), Arthur Mitchell (PwC UK), Tarik Moussa (PwC UK), Robert
Moline (PwC US), John Ni (PwC UK), Tazik Rashid (PwC UK), Katherine Risk (PwC
UK), Ella Sexton (PwC UK), James Wark (PwC UK), Monica Zolczer (PwC UK), Sara
Ahlberg (PwC UK), Mary Davies (PwC UK).

Microsoft project team

Lucas Joppa, Michelle Lancaster, Elizabeth Willmott, Brandon Middaugh and Joel
Combs

Case study contributors

A.P. Moller – Maersk, Danone, Mercedes-Benz AG, Microsoft Corp., Natura &Co,
NIKE, Inc., Starbucks, Unilever, and Wipro

Microsoft | PwC 44
Introduction Overview Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Conclusion
Building Blocks Ambition Governance Strategy Enterprise Supply Chains Innovation Finance Transparency Engagement

Abbreviations and terminology

Assets under management (AUM): The total market value of the investments that a person or entity manages on behalf of clients
Net Zero
Dual benefits: When an activity results in a reduction in GHG emissions as well as/ alongside its primary business objective
Net zero is a “state in which the activities
within the value chain of a company result Decarbonisation: Refers to reduction and/or elimination of GHG emissions
in no net impact on the climate from
Financial Stability Board Task Force on Climate-related Financial Disclosures (FSB TCFD): The TCFD develops recommendations for voluntary
greenhouse gas emissions.”
climate-related financial disclosures that are consistent, comparable, reliable, clear, and efficient, and provide decision-useful information to lenders,
insurers, and investors. On June 29, 2017 the Task Force released its recommendations report, that provides context, background, and the general
A credible net zero strategy means
framework for climate-related financial disclosures along with more detailed and technical guidance for companies to explain how to implement the
eliminating sources of emissions in the value
recommendations. As of February 2020, 1,027 organizations, representing a market capitalization of over $12 trillion support the TCFD.
chain at a pace and scale consistent with
limiting global warming to 1.5°C as far as
Greenhouse gas (GHG): The atmospheric gases responsible for causing global warming and climate change: Carbon dioxide (CO2), methane (CH4),
possible, and after this point removing any
nitrous oxide (N20), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SF6).
residual emissions that remain unfeasible to
eliminate through permanent carbon dioxide
The Intergovernmental Panel on Climate Change (IPCC): The United Nations body for assessing the science related to climate change. The IPCC
removals.
provides regular assessments of the scientific basis of climate change, its impacts and future risks, and options for adaptation and mitigation.
Companies can avoid or reduce emissions
outside of their value chains (compensation
Paris Agreement: At the Paris climate conference (COP21) in December 2015, 190 nations adopted The Paris Agreement. Its central aim is to
measures) or remove carbon from the
strengthen the global response to the threat of climate change by keeping a global temperature rise this century well below 2 degrees Celsius above
atmosphere within or beyond their value
pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5°C.
chains (neutralisation measures). Both
measures are being used by companies to Nationally Determined Contributions (NDCs): The Paris Agreement requests each country to outline and communicate their post-2020 climate
offset emissions, and include natural climate actions, known as their NDCs. Each climate plan reflects the country’s ambition for reducing emissions, taking into account its domestic
solutions such as tree planting and circumstances and capabilities.
ecosystem restoration.
Representative Concentration Pathway (RCP): To model and predict future climate it is necessary to make assumptions about the economic, social
Reducing emissions in line with 1.5°C means and physical changes to our environment that will influence climate change. Representative Concentration Pathways (RCPs) are a method for
aligning to, where possible, the de facto capturing those assumptions within a set of scenarios. The conditions of each scenario are used in the process of modelling possible future climate
standard set by the Science-Based Targets evolution.12
Initiative, which also provides external
validation of companies’ public targets Science-Based Targets (SBT): Science-based targets provide companies with a clearly defined pathway to future-proof growth by specifying how
against that standard. much and how quickly they need to reduce their greenhouse gas emissions. Targets adopted by companies to reduce greenhouse gas (GHG) emissions
are considered “science-based” if they are in line with what the latest climate science says is necessary to meet the goals of the Paris Agreement – to
Emissions are categorised into three scopes: limit global warming to well-below 2°C above pre-industrial levels and pursue efforts to limit warming to 1.5°C.
operational emissions consist of Scope 1 and
2 emissions and value chain emissions Science-Based Targets initiative (SBTi): The Science Based Targets initiative champions science-based target setting as a powerful way of boosting
consist of Scope 3 emissions. companies’ competitive advantage in the transition to the low-carbon economy. The initiative showcases companies that set science-based targets,
defines and promotes good practice and offers resources and independently assesses and approves companies’ targets.

Microsoft | PwC 45
 Introduction Overview Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Building Block: Conclusion
Building Blocks Ambition Governance Strategy Enterprise Supply Chains Innovation Finance Transparency Engagement

Endnotes
1 UN Global Compact (2020) Business Leaders Taking Action: https://www.unglobalcompact.org/take-
action/events/climate-action-summit-2019/business-ambition/business-leaders-taking-action (Accessed:
21st September 2020).

2 Fortune (2020) Global 500: https://fortune.com/global500/ (Accessed: 21st September 2020).

3 IPCC (2018) Special Report: Global Warming of 1.5 ºC: https://www.ipcc.ch/sr15/ (Accessed: 21st
September 2020).

4 Climate Action Tracker (2019) Temperatures: https://climateactiontracker.org/global/temperatures/

(Accessed: 21st September 2020).

5 PwC (2019) The Low Carbon Economy Index 2019: https://www.pwc.co.uk/services/sustainability-

climate-change/insights/low-carbon-economy-index.html (Accessed: 21st September 2020).

6 Science Based Targets and CDP (2020) Foundations for Science-based Net-Zero Target Setting in the
Corporate Sector: https://sciencebasedtargets.org/wp-content/uploads/2020/09/foundations-for-net-zero-
full-paper.pdf (Accessed: 21st September 2020).

7 Wei, Y., Han, R., Wang, C. et al. (2020) Self-preservation strategy for approaching global warming targets in
the post-Paris Agreement era: https://doi.org/10.1038/s41467-020-15453-z (Accessed: 21st September
2020).

8 Climate Action 100+ (2020) Investors: https://climateaction100.wordpress.com/investors/ (Accessed: 21st

September 2020).

9 PwC (2020) Asset & Wealth Management Revolution: https://www.pwc.com/gx/en/industries/financial-

services/asset-management/publications/asset-wealth-management-revolution.html (Accessed: 21st
September 2020).

10 Task Force on Climate-related Financial Disclosures (2020) Task Force on Climate-related Financial
Disclosures: https://www.fsb-tcfd.org/ (Accessed: 21st September 2020).

11 World Economic Forum and PwC (2019) How to Set Up Effective Climate Governance on Corporate
Boards: Guiding principles and questions: https://www.weforum.org/whitepapers/how-to-set-up-effective-
climate-governance-on-corporate-boards-guiding-principles-and-questions (Accessed: 21st September
2020).

12 Met Office (2018) UKCP18 Guidance: Representative Concentration Pathways:

https://www.metoffice.gov.uk/binaries/content/assets/metofficegovuk/pdf/research/ukcp/ukcp18-
guidance---representative-concentration-pathways.pdf (Accessed: 21st September 2020).

Microsoft | PwC 46
 We hope this document - produced by
PwC and commissioned by Microsoft -
proves a useful contribution to
Transform to Net Zero and helps
accelerate the transformation journey
for companies of all sizes and
geographies.

This report has been prepared for Microsoft Corporation (“Microsoft”) by PricewaterhouseCoopers LLP (“PwC”), and solely for the purpos e and on the terms agreed between Micros oft and PwC. Micros oft and PwC
accept no duty of care to any person for the preparation of the report. Accordingly, regardles s of the form of action, whether in contract, tort or otherwise, and to the extent permitted by applicable law, Micros oft and PwC
accept no liability of any kind and dis claim all responsibility for the consequences of any person acting or refraining to act in reliance on the report or for any decisions made or not made which are bas ed upon such
report. This report is not intended to form the bas is of any investment decisions .

In this document, “PwC”refers to the UKmember firm,and may ometimes refer to the PwC network. Each member firm is a separate legal entity.
Pleas e s ee www.pwc.com/s tructure for further details .
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