Creating the right path for net zero for your business

Circular Economy
Rana Hajirasouli
Founder
October 23, 2022
2 minutes read

Net zero is now a key expectation for businesses of all sizes, with increasing investor scrutiny on sustainability claims. Over 3,000 organizations have joined global initiatives like the Race to Zero, and trillions of investment dollars are shifting toward companies with strong environmental, social, and governance (ESG) commitments. However, not all net zero pledges are created equal, and true impact requires transparency and action—not just bold claims.

The Pitfalls of Carbon Accounting

Some businesses manipulate carbon accounting by excluding key assets, geographic regions, or supply chain components, making their net zero claims misleading. Maintaining a complete greenhouse gas (GHG) inventory aligned with best practices ensures credibility and real impact.

Leveraging the Circular Economy for Real Change

The circular economy (CE) offers businesses—especially SMEs—a practical way to reduce emissions by rethinking how materials are used, reused, and repurposed. Circular strategies help cut costs, drive innovation, and strengthen brand positioning. However, the increasing commercialization of CE means businesses should use science-based lifecycle assessments to ensure they truly minimize environmental impact.

Embracing Clean Tech, Even for Legacy Businesses

While startups drive much of today’s green innovation, traditional businesses still have opportunities to transition by integrating clean technologies, collaborating with industry leaders, and demonstrating long-term resilience. Investors increasingly value adaptability, making it crucial for businesses to embrace continuous evolution.

Looking Beyond Direct Emissions

Most companies focus on reducing Scope 1 (direct emissions) and Scope 2 (indirect emissions from purchased energy), but Scope 3 emissions—those embedded in supply chains—often make up the largest share. Addressing Scope 3 through better supplier engagement and transparent reporting unlocks new efficiencies and market opportunities.

Offsetting vs. Insetting: A Smarter Approach

Carbon offsets allow businesses to neutralize emissions by purchasing credits, but they are often criticized for greenwashing. Insetting—investing in emission reduction within a company’s own supply chain—builds trust, strengthens partnerships, and creates a more sustainable business model. Companies should prioritize high-quality offsets, avoid double-counting, and focus on additionality to ensure real climate benefits.

The Bottom Line

Achieving net zero is about more than making pledges—it’s about integrating sustainability into core business strategies. Transparency, circular economy principles, supply chain innovation, and thoughtful emission reduction efforts will determine which businesses thrive in a net-zero future.

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