Net Zero Business Models

7PATHWAY TWO, OPTION ONE: INCREMENTAL TRANSFORMATION OF THE BUSINESS MODEL—ZERO‐CARBON PRODUCTS AND SERVICES

“The technological innovations our people are pioneering will shape our planet's destiny.”¹

—Warren East, CEO Rolls‐Royce

Companies that choose Pathway Two have committed to achieve net zero emission targets. They have concluded that an eco‐efficiency, risk mitigation, and compliance‐oriented approach to emissions reduction will not be enough to meet their net zero targets. They have embraced the notion that they must transform their business models to thrive in the emerging net zero emissions economy. Pathway Two is transformational.

According to the World Economic Forum, only 9% of the world's publicly listed companies had achieved an actual emissions reduction of more than 4% in 2019, the minimum annual reduction necessary to limit global warming to 1.5°C.² Many of these companies are Pathway Two companies.

As part of their plans, companies in Pathway Two deploy eco‐efficiency processes and systems, comply with changing climate regulations, and employ effective carbon‐risk management practices. They also may use carbon credits and offsets, and carbon capture and storage within a broader plan to achieve a net zero business model outcome. Pathway Two companies not only employ all the eco‐efficiency processes of Pathway One companies but, unlike Pathway One companies that remain committed to maintaining their existing business models, they also change their fundamental ...