GHG emissions and regulations

• Quantify baseline emissions according to the GHG Protocol to set science-based targets.
• Assess regulatory requirements for decarbonisation and climate related disclosures to ensure compliance with Swiss and international climate regulations.

Good to know: Emissions are often calculated using spend-based data, which often lacks granularity. Companies are increasingly shifting to activity- based data, such as the weight of purchased materials, transported weight over distance, and litres of heating oil. The next step involves obtaining comparable product carbon footprint data within a product category.

Physical and transition risks

• Evaluate exposure to climate hazards and transition risks.
• Identify business opportunities related to decarbonisation.
• Conduct physical risk (e.g., flooding, droughts, heatwaves) and transition risk (e.g., climate policies, carbon pricing) assessments to facilitate internal buy-in (see Climate-risk and opportunity assessment)

Good to know: Quantifying net risk can be resource-intensive for companies with numerous sites and suppliers, requiring consistent and comparable disclosures from site managers and suppliers. Consequently, some companies start with a gross risk assessment (e.g., damage caused without considering adaptation or mitigation measures) for all sites and suppliers. The net risk is then calculated (damage after considering mitigation and adaptation) for the most relevant sites and risks in the initial phase. 

Target setting and cost assessment

• Align emission reduction and net zero targets with corporate strategy.
• Identify key abatement levers and assess their reduction potential and financial implications across short, medium, and long-term horizons.
• Develop a cost-batement curve (MACC) to efficiently prioritise interventions (see Marginal abatement cost curve).

Good to know: Climate mitigation measures may involve high upfront costs but lead to long-term savings, such as installing heat pumps to eliminate fossil fuel heating. The impact of these costs depends on the company's cost of capital. Green financing can reduce this cost, making the net present value (NPV) more attractive. Alternatives to reduce capital expenditure (CAPEX) include government subsidies or adopting an "as-a-service" model, like energy contracting. In this model, an energy company installs photovoltaic (PV) panels or heat pumps on your premises and sells the heat over time, keeping CAPEX at zero and often reducing operational expenditure (OPEX).

Roadmap and Enabling Factors

• Plan abatement measures over time to achieve net zero, with a structured plan including key milestones and deliverables.
• Clarify required enabling factors including the target operating model to successfully implement the roadmap.

Good to know: Decarbonisation significantly impacts business processes. Board-level buy-in is crucial to set ambitious targets and enable the transition to net zero. 

Financing

• Implement financing mechanisms, such as internal carbon pricing, to support transition investments.
• Use financing from investors (lower cost of capital), clients (green premium), and grants and incentives.

Good to know: Combine various financing approaches like internal carbon pricing, green bonds, green premiums, and grants and incentives to accelerate the transition to net zero.

Implementation

• Implement measures and accelerators to drive decarbonisation.
• Develop and scale-up net zero innovations.

Good to know: Close collaboration with stakeholders is essential during the implementation of the transition plan to manage uncertainties stemming from emission reduction measures. 

Reporting

• Enhance accuracy and efficiency of data collection and reporting.
• Select appropriate reporting tools.

Good to know: Integrate reporting with the sustainability from the outset. The double materiality helps companies to focus on topics that matter to various business functions, using reporting standards as templates for addressing these topics effectively.  

Monitoring

• Forecast emission reductions to identify early if the transition plan will not meet targets.
• Assess and reinforce enabling factors to close gaps and optimise the transition plan.

Good to know: Continuous re-evaluation cycles are necessary until net zero is achieved, as implementation may not always proceed as planned.