July 1, 2022

Why actually climate neutral?

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VDMA e. V.

Until recently, everyone was talking about the Paris Agreement on climate protection. It aims to limit the average temperature increase to 2 °C, preferably 1.5 °C. Why is there now talk of climate neutrality and what is the connection?

To understand this, you need to know that there is an overall carbon budget that describes the maximum amount of emissions that can be emitted in order to meet the targets of the Paris Climate Agreement. At the same time, this means that the focus is on companies in particular and the question of what quantity of emissions they are responsible for and where the starting points are for reducing or avoiding emissions. It was clear from the beginning: Where materials are consumed, where production takes place, where goods are transported, where business trips are made and services are offered, there can never be no emissions. 

This is where the concept of climate neutrality comes in: it describes a balance between carbon emissions on the one hand and the absorption of carbon from the atmosphere on the other. Only in this way can carbon reduction be achieved. With a view to the goal of net zero emissions, and thus climate neutrality, all global greenhouse gas (GHG) emissions must ultimately be offset by carbon sequestration, for example by reforestation of forests or technical sequestration. 

Corporate processes are therefore considered climate neutral if they have no impact on the natural greenhouse effect and if all business activities along the value chain do not cause any GHG emissions or if emitted emissions are offset. And this is where the aforementioned Paris Agreement comes into play. Thanks to the so-called “Science Based Targets Initiative” (SBTi), it is possible for any company to voluntarily set science-based targets and have them validated and recognized via the SBTi. This enables a common benchmark for companies. More than 700 companies worldwide have already committed to science-based targets.

Importance of climate-neutral production in mechanical engineering

It is becoming more and more deeply rooted in society to limit climate-related changes. Political framework conditions have changed and market and consumer behaviour are also changing. For companies, these effects are first felt through the upstream and downstream value chain.

Various advantages result from the implementation of climate-neutral production: Improved opportunity and risk management, better handling of external requirements or the use of cost reduction potentials, for example, by increasing material efficiency, changing packaging, promoting recycling processes or reducing business travel.

The future-oriented positioning of the company is also an important guiding principle with regard to the transformation towards a low-emission economy. Future profitable business models must be oriented to the value chains and regulations of a low-emission society and serve the corresponding customer needs.

For the mechanical and plant engineering industry, there are thus not only opportunities in the familiar enabler role, but also in the transformation of its own corporate activities towards climate neutrality. After all, if you know your emissions and where they occur in the value chain, you also know where they can be limited

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On the way to climate-neutral production: Implementation in the company

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