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Why you should take this step

Welcome to the first step in your journey to becoming a carbon neutral business! Without a doubt, you are among the world’s first-movers to commit to carbon neutrality – perhaps even the first in your industry, country or community! Naturally, you have many questions about how to clearly define your ambition, and you may not know where to look for advice. Don’t worry: we’ve achieved it, and we’re ready to share what we learned along the way!

Questions on your mind

  • What emissions is my company responsible for?
  • How much time will it take to achieve carbon neutrality?
  • Are all approaches to carbon neutrality equally credible?
  • Is carbon neutrality “greenwashing”?
  • How much will this cost my business?


Your carbon neutrality pledge needs a defined emissions boundary or limit, stating which emissions it includes and which it excludes. To be carbon neutral, you will have to reduce or offset all the emissions you include in your pledge. The minimum carbon neutrality claim must address direct emissions (Scope 1) and indirect emissions from purchased electricity (Scope 2).

Which scopes will you include?

Sustainable Product

Carbon neutral product

Includes all direct and indirect emissions in a product’s life cycle (Scope 1, 2, 3 in the Greenhouse Gas Protocol). For a manufacturing business, emission calculation begins at natural resources extraction and ends at the product’s end of life.

Sustainable Business

Carbon neutral business

Includes your link in the supply chain: the CO2 emissions you can influence (Scope 1, 2 and part of Scope 3). For a manufacturing business, emission calculation begins as material leaves your supplier and end as your product passes to a customer.

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Incorporating Scope 3 emissions into your carbon neutrality claim is optional, so decide which to include based on your most significant footprint. For example, if your industry has high transport emissions, you can choose to include these in your boundary and claim ‘carbon neutral transport’.

Set your timeline

You should ideally focus on reducing your emissions internally before you start to offset. In terms of climate impact, reducing your immediate carbon footprint is considered a better option than compensating via offsets. Realizing significant reductions in your footprint, however, can take time and sometimes requires considerable investment, whereas offsetting can be done immediately. You should expect to look at a combination of both reductions and offsetting as part of your strategy, with various emphasis depending on whether you have decided on a shorter or longer timeline.

Timeline options

Sustainable Product

Short term (1-2 years)

Creates a sense of urgency, but you may have to compromise on the extent of your commitment. You may have to purchase more carbon offsets, if you don’t have time to significantly reduce emissions from your business (Step 6).

Sustainable Business

Long term

Allows you to take responsibility for more emission types. You will have more time to collect data, change the way you work and reduce your biggest emission sources, rather than opting for the quicker (and less impactful) offsetting option.

Allocate resources

One thing is sure: you need to allocate resources to your carbon neutrality program. But, you can generate sufficient savings to cover your program costs. These savings will appear as you analyze emission data, revealing opportunities for improved efficiency or more affordable electricity sources within your business.

Assemble your team

Take a good, hard look at your organization. The skills and competences in your team may not match what is required to achieve your pledge and you will most likely need to commission some external help. You need to be realistic and transparent from the outset, as you do not want to be stuck in a situation where you cannot promote your pledge or, worse, cannot fund the measures that will make your company carbon neutral.

Reflection point

Has your company ever published a Sustainability Report?

Does your company have a Sustainability department, with a budget?

Does management understand and support your carbon neutrality pledge?

Does your company have a process for calculating its carbon footprint?

Does your company have emission reduction programs in place?

Things to consider

  • There are multiple ways to reach carbon neutrality – carbon neutral company, carbon neutral product or based on Science Based Targets.
  • A life-cycle approach may contribute to double counting as other companies in your supply chain eliminate/offset the same emissions.
  • Carbon neutral may not be the end goal – you could raise the bar and become carbon positive.
The LM Wind power Way

Our boundary

We decided to go beyond the minimum requirements of carbon neutrality (Scope 1 and Scope 2 emissions) to include the emissions over which we have operational control.
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How we built our business case

Christopher Springham, VP Global Communications & Sustainability, shares how we established our Sustainability function and created the business case for carbon neutrality.

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