Net-Zero Emissions Primer for Professional Services Companies
Net-Zero Challenge
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Section 1 - Primer audience
The objective of this primer is to help companies and organizations in the professional, scientific and technical services subsectors reach net-zero emissions by 2050. It can be used either by companies and organizations who are just starting out on their journey towards net-zero emissions, or those who are further along in the process and are looking for more concrete advice on what steps they can take.
1.1. Overview of the subsector
Companies in the professional services subsector provide expert advice and services to clients. They do not provide physical goods and are typically office-based, although employees may also work from home. The subsector can include:
- accounting firms
- investment advisors
- engineering consultants
- management consultants
- legal advisors
- human resource specialists
- planners
- architects
- advertising companies
- marketing companies
- procurement companies.
The full list of the relevant North American Industry Classification System (NAICS) codes for this subsector are provided in Annex 1.
In Canada, there are more than 500,000 businesses in the professional services subsector, most of which are small or medium-sized enterprises (SMEs) ranging in size from a few to several hundred employees. The sector as a whole employed over 1.2 million people in 2024 and contributed a total of $133 billion to Canada’s gross domestic product (GDP) in 2022 (~ 6% of Canada’s total GDP). Total greenhouse gas (GHG) emissions from this subsector are estimated to be over 11 megatonnes (Mt) of carbon dioxide equivalent (CO2 eq) per year (~1.5% of Canada’s total emissions).
In most cases, professional services firms are not major emitters individually and will not have to make significant changes to their business model as the economy shifts to net-zero emissions. However, the subsector’s total emissions are still significant and must be addressed if Canada is to meet its net-zero target.
Section 2 - The shift to net-zero emissions
The purpose of this section is to provide relevant background and context on the shift to net-zero emissions, to help professional services companies understand their role in the transition and prepare to develop their net-zero strategy and plan.
This section describes why planning for net zero is important, and what the shift to net-zero will look like for companies and organizations in the professional services subsector in Canada. It also gives an introduction on how to measure emissions using internationally recognized GHG emissions accounting practices.
2.1. The importance of planning for net-zero emissions by 2050
For the professional services subsector, reaching net-zero emissions is important since the aggregate emissions from it are significant, even if those from individual firms are usually small. The subsector as a whole has a role to play in the global transition to net-zero.
For individual companies in the professional services subsector, planning for net-zero emissions is important as it allows firms to prepare for the future. Companies can increase their resilience to climate risk, identify business opportunities, secure a competitive advantage in a decarbonizing market, and build their reputation with clients and investors. Net-zero planning is also useful for complying with evolving regulatory standards and participating in voluntary emissions reduction programs (such as the Government of Canada’s Net-Zero Challenge ).
2.2. The shift to net-zero for the professional services subsector in Canada
This section describes what the shift to net-zero could look like for the professional services subsector as a whole in Canada. What this could look like for your company specifically is addressed in Section 3.
2.2.1. Where emissions in the professional services subsector come from
The activities of firms in this subsector are typically office-based. The main emissions associated with these activities typically come from the operation of business premises, travel and the purchase of supplies and services. Details on where these emissions typically come from are listed below:
Category: Business Premises
Description: Space and water heating, air-conditioning, lighting, powering computers and servers.
Explanation: These emissions come from fossil fuels burned on-site for heating, or from the electricity purchased and used on-site. Small amounts of emissions can also come from the refrigerants used in HVAC systems.
Relative magnitude of emissions: Low to high
Degree of company control: Low to high
Category: Travel
Description: Employee travel for business and commuting.
Explanation: These emissions result from gasoline or diesel fuel used for ground transportation (cars, buses, trains, etc.) and aviation fuel for air travel.
Relative magnitude of emissions: Medium to high
Degree of company control: Medium to high
Category: Supplies & Services
Description: Purchased inputs for operations.
Explanation: These emissions result from gasoline or diesel fuel used for ground transportation (cars, buses, trains, etc.) and aviation fuel for air travel.
Relative magnitude of emissions: Low to medium
Degree of company control: Low to medium
2.2.2. How to reduce emissions in the professional services subsector
There are several actions that can be taken to reduce emissions in the professional services subsector. Some actions are under the control of the company, whereas others are actions that need to occur across the broader economy. The main mitigation actions that need to happen in order for the professional services subsector to reach net-zero emissions are listed below:
Category: Business Premises
Actions Companies Could Take:
- Replace fossil fuel space and water heating equipment with low-emission alternatives, such as electric heat pumps
- Reduce building energy demand through energy efficiency measures (e.g. insulation and building controls)
- Replace refrigerants used in building HVAC systems with low-emission alternatives
Actions Across the Broader Economy:
- Decarbonize electricity grids
- Decarbonize building construction (heavy equipment, generators, etc.) and materials (steel, concrete, plastics, etc.) used for new-build offices and the retrofit of existing buildings
Category: Travel
Actions Companies Could Take:
- Switch from internal combustion engines (ICE) to zero emission vehicles (ZEV) for road transport
- Install electric vehicle (EV) chargers on-site
- Adopt active transport (biking, walking, etc.) for commuting
- Choose rail travel instead of air travel for short journeys
- Avoid travel where possible and encourage remote work when possible
Actions Across the Broader Economy:
- Build-out urban mass transit systems and either electrify or shift to low-carbon fuels
- Expand charging infrastructure for electric vehicles and increase availability of ZEVs
- Expand and upgrade passenger rail travel networks, and switch to electric or hydrogen fuel-cell powered locomotives
- Replace jet fuel with sustainable aviation fuel (SAF), hydrogen, synthetic fuels or electric propulsion
Category: Supplies & Services
Actions Companies Could Take:
- Seek out supplies and services from low-carbon providers
- Purchase used goods where possible (used office furniture)
Actions Across the Broader Economy:
- Decarbonize production chains involved in the manufacture and transport of office supplies and equipment, including computers, phones, printers, and scanners
- Decarbonize IT services, including AI services, that involve extensive physical infrastructure and a large and growing energy footprint
The emissions mitigation actions listed above cover emissions sources that can be quantified using internationally recognized accounting practices (see section 2.5 for more information). However, companies in the professional services subsector can also influence emissions in other ways, such as through:
Client Advice – A professional services company may influence emissions indirectly through the content of the advice they provide to clients. This is especially true for companies that design or manage projects related to the construction of buildings, infrastructure and manufacturing facilities, or involve the transport and energy sectors. In some cases, emissions reductions secured through client advice may greatly exceed the potential for direct reductions in the service company’s own operations. By staying abreast of developments in the fields in which they provide services, they may be able to identify solutions that could contribute to decarbonizing a client’s projects.
Professional service companies can also contribute through:
Knowledge Sharing – Ensuring staff receive ongoing training about climate change mitigation in the areas in which they provide advice and services. This allows staff to act as thought leaders, publicly sharing their achievements.
Branding – A company can market themselves as a net-zero leader, highlighting their ability to deliver low-carbon design or service solutions as part of their publicity. This can normalize net-zero planning and inspire others in the sector to take action.
2.3. Measuring GHG emissions
Accurately determining a company or organization’s emissions profile is critical to identifying where to direct mitigation actions. There are several widely accepted international resources that can be used to calculate a company’s GHG emissions. The two most prominent resources are the GHG Protocol, and the ISO 14064 standards.
2.3.1. The GHG Protocol
The GHG Protocol is the most widely used framework for GHG accounting and identifies, explains, and provides options for GHG emissions inventory best practices. It is used widely across many voluntary GHG initiatives, including the Government of Canada’s Net-Zero Challenge and the Science Based Targets initiative (SBTi).
The GHG Protocol adopts standard accounting categories companies can use to effectively communicate their emissions data with stakeholders, investors, and regulatory bodies. The GHG Protocol’s categorization provides a holistic view of a company or organization’s entire value chain This offers deeper insights into emissions sources and potential areas for cost and carbon reductions. These emissions categories will be referred to throughout this primer, and are as follows:
- scope 1 emissions: Direct emissions from owned or controlled sources, such as company-owned facilities and vehicles
- scope 2 emissions: Indirect emissions from purchased electricity, steam, heating, and cooling
- scope 3 emissions: All other indirect emissions that occur throughout the supply chain, from raw material extraction to transportation, product use, distribution and disposal
Scope 3 emissions
In the GHG Protocol there are fifteen categories for Scope 3 emissions:
- category 1: Purchased goods and services
- category 2: Capital goods
- category 3: Fuel- and energy-related activities
- category 4: Upstream transportation and distribution
- category 5: Waste generated in operations
- category 6: Business travel
- category 7: Employee commuting
- category 8: Upstream leased assets
- category 9: Downstream transportation and distribution
- category 10: Processing of sold products
- category 11: Use of sold products
- category 12: End-of-life treatment of sold products
- category 13: Downstream leased assets
- category 14: Franchises
- category 15: Investments
2.3.2. International Organization for Standardization
The ISO 14064 standards can be used to quantify, monitor, report, and verify GHG emissions. Relevant standards include:
- ISO 14064-1 (GHG emissions and removals for organizations – corporate level)
- ISO 14064-3 (validation and verification of GHG statements)
The ISO 14064 series is complementary to the GHG Protocol and companies could benefit from using both sets of guidance. Specifically, if a company wishes to have their GHG emissions inventory verified by an accredited third-party, it is recommended that they use the ISO 14064-1 standard. This ensures that their GHG emissions inventory is developed in a way that can be easily verified and compared to the inventories of other organizations.
Section 3 - Net-zero strategy and planning for professional services companies
The purpose of this section is to help professional services companies make a strategy and a plan to reach net-zero emissions by 2050 or earlier and position their company competitively in a net-zero world. This section is for companies who understand the background and context provided in Section 2 and are ready to take action.
Note that this primer is based on the typical activities of a firm in the professional services subsector. While it provides a guide to simplify the process of net-zero planning, your company or organization must apply it to your own specific circumstances to develop a path forward.
3.1. Corporate strategy in a net-zero world
Before creating a detailed net-zero plan, your company should create a corporate strategy that determines broadly how your company wants to position itself in a net-zero emissions world. Your company should research and evaluate both the external competitive landscape and the company’s internal strengths and weaknesses to determine the best path forward for the company.
Some of the questions you could ask include:
- what could the professional services subsector look like in Canada in 2050
- how well would our company be positioned in a net-zero world
- what aspects of our business may be the most exposed to change and risk and where could we find strategic advantages in the transition to net-zero
- what key risks should we mitigate to ensure our company’s success as we eliminate our emissions over the coming years
- are there any new business opportunities that our company could pursue in the transition to net-zero
- does our company have any weaknesses that expose it to risk due to the effects of climate change and a changing economy
3.1.1. Net-zero business model
Next, you should reflect whether your company should make any changes to its business model.
For many companies in the professional services subsector, reaching net-zero emissions and operating in a net-zero world will not result in a significant change to their business models or everyday work practices. There will be changes in how office spaces are heated and how we move from place to place, but the daily work will not be affected.
For certain companies, there may be a more significant change in their business, especially if their clients are currently in heavy emitting sectors such as construction, transportation or energy. If this is the case for you, your company should research these sectors and understand what the net-zero transition will look like for those sectors.
3.1.2. The competitive advantage of net-zero
Moving to net-zero is not just about managing risk—it also presents real opportunities.
In Canada, several industries are expected to expand and flourish over the coming decades. These include natural resource-based industries such as clean electricity generation, critical minerals mining, and bio-based production from forestry and agriculture. There will be ample opportunities across the professional services subsector to support this growth.
Businesses that take early action can gain a competitive edge, reduce costs, attract talent, and build stronger relationships with clients and investors. In many sectors, being ahead of the curve on climate action is becoming a mark of leadership and credibility.
3.2. Net-zero planning for professional services companies
Once you have an understanding of what the net-zero transition could look like globally and for your sector, and you have considered your company’s strategy in a net-zero world, you are ready to create a net-zero plan that will outline the tangible actions you can take.
This section goes over the steps your company will need to complete to create a credible and achievable net-zero plan, which include:
Step 1 - Create a base year GHG inventory
Step 2 - Identify GHG mitigation actions
Step 3 – Evaluate and prioritize GHG mitigation actions
Step 4 - Establish targets and develop an implementation timeline
Step 5 - Monitor implementation and periodically revise your plan
Details on how to complete each of these steps are given in the sections below.
For some professional services companies, doing a simple net-zero plan in house is possible. However, some companies may have more complex situations or lack the internal resources to create a credible net-zero plan. In these cases, companies may wish to avail themselves of external expertise in clean technology, the energy transition, energy and climate policy, and finance. For larger companies, developing and implementing a robust net-zero plan typically requires engagement from multiple departments. Planning is greatly facilitated by strong commitment and clear tone from senior management to ensure cross-functional collaboration and alignment on sustainability goals.
3.2.1. Step 1 - Create a base year GHG inventory
The first step in creating a net-zero plan is creating an inventory of your GHG emissions for a one-year period, which will be your base year . To create the base year inventory, you will need to set inventory boundaries for your organization, identify your sources of emissions, and quantify your emissions over 12 consecutive months.
Set inventory boundaries for your organization
Setting the inventory boundary allows you to determine what sources of emissions result from your activities and, accordingly, what emissions will need to be addressed in order to reach net-zero emissions.
Generally, inventory boundaries can be set through three criteria: equity share, financial control and operational control. Please refer to the following resources for details on how to set inventory boundaries for your organization:
- Environment and Climate Change Canada’s (ECCC) Net-Zero Challenge Technical Guide 2.0
- GHG Protocol Corporate Standard
Identify sources of emissions
The lists below shows common sources of emissions for professional services companies. Identify which of these sources apply to your organization.
Common sources of emissions for the business premises category:
- space heating (furnaces, boilers, baseboard heating etc.)
- water heating (boilers, tank water heaters, tankless, etc.)
- air conditioning and mechanical ventilation
- other electricity consumption (lighting, computers, servers, etc.)
- chemicals from refrigerants used in air conditioners or heat pumps
Common sources of emissions for the travel category:
- employee commuting
- business travel
Common sources of emissions for the supplies and services category:
- purchased inputs for operations (note that for most companies, purchased supplies and services make a small contribution to ghg emissions)
Once you have identified the sources of emissions, you will need to identify which category each emissions source falls into (i.e. Scope 1, 2 or 3), as described in the GHG Protocol.
While the list above identifies the most common sources of emissions for professional services companies, the full list of scope 3 emissions should be reviewed to determine whether there are any other sources that could be relevant to your business.
Quantify your emissions
Once emissions sources have been identified, you must quantify your emissions. This is done by gathering activity data and emissions factors that quantify the GHG emissions associated with each type of activity.
Activity data are quantitative measures of activities that result in GHG emissions. Examples of activity data could include:
- cubic meters of natural gas used to heat a building
- liters of gasoline used by vehicles
- kilowatt hours of electricity consumed
- kilometers travelled by airplane
- dollar amount of office supplies purchased
Emissions factors are calculated ratios that specify the amount of GHGs that are emitted per unit of activity. Multiplying the activity data by the correct emissions factor will produce an estimate of total emissions associated with this activity.
There are several reputable organizations that provide publicly available emissions factors. ECCC provides the following resources to find emissions factors:
- for electricity: National Inventory Report, Part 3, Annex 13
- for other activities: National Inventory Report, Part 2, Annexes 3 and 6
Other helpful resources to create your GHG inventory include:
- ECCC’s Net-Zero Challenge Technical Guide 2.0
- ECCC’s Net-Zero Challenge Emissions CalculatorFootnote 1
- GHG Protocol Corporate Standard
3.2.2. Step 2 - Identify GHG Mitigation Actions
Once the base year GHG inventory is complete, the second step is to identify possible actions your company could take to mitigate those emissions. Possible mitigation actions for each category of emissions are given in the sections below.
If none of these mitigation actions are feasible for your company, you can consider purchasing carbon offset credits.
Business Premises
The top mitigation actions for GHG emissions from business premises are listed below. These possible mitigation actions are presented roughly in order of what will be the most impactful and practical, to the least.
Possible mitigation actions for space or water heating:
- replace fossil-fuel space and water heating with low-carbon alternatives, such as air or ground source heat pumps or connection to a low carbon district heating system
- reduce demand for space heating by making upgrades to the building (windows, air sealing, improved insulation, smart thermostats, etc.) or reducing the footprint of your office space
- if you do not have operational control over your buildings’ heating system, you can speak with the landlord and determine if they are open to making changes to the building
Possible mitigation actions for air conditioning & other electricity consumption (lighting, computers, servers, etc.):
- if your company is located in a province with a low-carbon electricity grid, these emissions will already be close to net-zero
- if your company is located in a province with a high-carbon grid, you have several options:
- upgrade your AC to a more efficient cooling system, like a heat pump (this should be coordinated with replacement of your space heating)Footnote 2
- upgrade other sources of electricity consumption (lighting, computers, etc.) to a more energy efficient technology
- supply your own renewable electricity, for example through roof-top solar panels
- use Power Purchase Agreements (PPAs)
- use Renewable Energy Certificates (RECs)
- wait until the provincial grid is decarbonizedFootnote 3
Possible mitigation actions for refrigerants used in air conditioners or heat pumps:
- replacement of GHG forming refrigerants with low emission substitutes
Travel
The top mitigation actions for GHG emissions from travel are listed below. These possible mitigation actions are presented roughly in order of what will likely be the most impactful and practical, to the least.
Possible mitigation actions for employee commuting:
- encourage employees to travel by public transport or adopt active modes of transport (biking, walking) when possible
- encourage employees to switch from internal combustion to electric or hybrid personal vehiclesFootnote 4
- avoid commuting and encourage remote work when possible
Possible mitigation actions for business travel:
- avoid business travel where possible through consolidating trips or holding meetings virtually
- if your company owns or holds long term leases on light duty gasoline-powered vehicles, replace them with battery electric or hybrid vehicles
- specify that car rentals should be battery electric or hybrid, unless there is a particular reason that an internal combustion vehicle is necessary (for example travel to a remote community)
- prioritize rail over air travel for short to medium length journeys
Supplies & services
For most professional services companies, purchased supplies make a small absolute contribution to GHG emissions. Approaches to reducing emissions include:
- buying used, recycled or refurbished products (e.g. paper, ink cartridges, furniture, and so on)
- switching from paper-based to digital processes
- procuring products with improved emissions performance.
Assessments of emissions from individual products can be time consuming. Therefore, the most practical approach is to work with major supply companies that offer reduced emissions alternatives.
Other
Companies in the professional services subsector can also influence emissions in other ways that are not directly measured in internationally recognized standards such as the GHG Protocol.
Client Advice – A professional services company may be able to reduce emissions indirectly through the content of the advice they provide to clients. For example, an engineering services company could recommend a decarbonized space and water heating system for a client’s new building. While reducing emissions through client advice may appear less tangible than some of the more direct measures listed above, it is an important means through which professional service companies can contribute to the overall decarbonization of the economy. Ensuring staff receive ongoing training about climate change mitigation in the areas in which they provide advice and services and routinely offering clients low or zero carbon options for realizing their projects are ways to capitalize on these opportunities.
Knowledge Sharing – Companies can act as thought leaders, publicly sharing their knowledge and achievements, learning from other leaders, and encouraging adoption of low carbon approaches.
Branding – A company can market themselves as a net-zero leader, highlighting their ability to deliver low-carbon design or service solutions as part of their publicity. This can normalize net-zero planning and inspire others in the sector to take action.
Carbon offset credits
Purchasing carbon offset credits is a mitigation action that can be taken when no other option is feasible.
Carbon offset credits represent GHG emissions reductions or removals generated from activities that are additional to what would have occurred in the absence of the offset project. These credits are generated from activities that go beyond legal requirements and a business-as-usual standard. Each offset credit generated by an offset project represents one tonne of CO2e reduced or removed from the atmosphere.
Today, most offsets are emissions reductions. But as the economy approaches net-zero, emissions reductions offset opportunities will decline as emissions fall across all sectors of the economy. Companies that do rely on offsets should therefore, over time, increase the proportion of offsets that come from carbon removals.
3.2.3. Step 3 – Evaluate and prioritize GHG mitigation actions
Now that several possible mitigation actions have been identified, companies will need to evaluate and prioritize them. Each company will have a different evaluation framework depending on various factors, including their level of ambition, financial position, resourcing and management support. Companies should also consider supporting Canadian businesses when selecting mitigation strategies.
Common factors that companies should consider when evaluating and prioritizing emissions mitigation actions are listed below:
Emissions impact:
Possible Pro(s):
- The mitigation action will have a significant impact on reducing the firm’s emissions
Possible Con(s):
- The mitigation action will have a small impact on the firm’s emissions
Technology maturity
Possible Pro(s):
- The mitigation action has been successfully used in real life conditions
- The mitigation action is a non-technical solution (e.g. walking to work)
Possible Con(s):
- The mitigation action has not yet been commercially deployed
Capital cost
Possible Pro(s):
- The capital cost is similar to or lower than the high-emitting option
- There are funding, grants or incentives available to help reduce the capital cost
Possible Con(s):
- The capital cost is much higher than the existing option
- There are limited funding options available
Operation and maintenance (O&M) costs
Possible Pro(s):
- The O&M costs are lower than the existing option (e.g. high efficiency equipment will have lower energy costs)
- Government policy can lower the ongoing O&M cost (e.g. a price on carbon can make electrification more cost effective)
Possible Con(s):
- The O&M costs are higher than the existing option (e.g. switching to electricity may be more expensive than natural gas)
Availability
Possible Pro(s):
- The mitigation action is readily available
- Enabling infrastructure is available (e.g. charging stations for EVs)
Possible Con(s):
- There are supply chain constraints, making the solution less readily available
- The enabling infrastructure is not yet in place
Timing
Possible Pro(s):
- The timing of implementing the mitigation action is logical (e.g. equipment is reaching the end of its lifetime and will need to be replaced anyways)
Possible Con(s):
- The timing of implementing the mitigation action is not ideal (e.g. equipment was recently replaced, and it would not make sense to replace it again in the short term)
Lifestyle considerations
Possible Pro(s):
- Mitigation action increases quality of life, is more convenient (e.g. no more pumping gas when you own an EV)
Possible Con(s):
- Mitigation action decreases quality of life, is more inconvenient (e.g. a longer commute)
Completing this analysis of the mitigation actions, along with understanding your company’s available resources and strategic priorities, can help identify the top mitigation actions that your company would like to pursue. You will complete this exercise based on the situation as of today but note that all of these factors are constantly changing. This exercise will need to be repeated regularly as the landscape shifts.
3.2.4. Step 4 - Establish targets and develop an implementation timeline
Now that you have identified your main emissions sources and potential mitigation actions, it is time to assess what is possible within specific timelines, and to set targets.
Task 1: Consider Interim Targets to Reach Net-Zero by 2050
Targets provide crucial grounding for decarbonization efforts. They communicate a company’s ambition, allow the organization to coordinate its response, and provide a benchmark against which progress can be measured. Many voluntary initiatives, including the ECCC’s Net-Zero Challenge, require member companies and organizations to set interim targets as part of a plan to reach net-zero emissions by 2050 or earlier. This aligns with Canada’s legislative commitments to net-zero and the recommendation of the Science Based Targets initiative.
Interim targets are important to focus attention on what can be done in the short-term and to ensure progress. Some companies have adopted shorter term targets based on an aspiration to be a leader in their sector and/or to harmonize with Canada’s national goal of a 40-45% reduction in emissions by 2030. Nevertheless, interim targets are more likely to be achieved when they align with your strategic objectives and are grounded in a solid analysis of the costs, timing, and effectiveness of proposed mitigation measures.
Task 2: Draft an Implementation Timeline
The mitigation actions should be placed on a timeline to establish and/or confirm interim targets and to form the basis for a phased decarbonization plan.
In Step 3 , you evaluated several possible emissions mitigation actions, and this evaluation can help you determine a realistic implementation timeline.
Factors that influence the implementation timeline will include:
- availability of equipment and enabling infrastructure (e.g. low carbon grid, EV charging infrastructure)
- technology life cycle (e.g. end of life of HVAC equipment, average vehicle lifetime).
- upfront cost and financing options
Task 3: Sum your emissions reductions over time
Each of the actions you have decided to take can be included in your plan together with the anticipated reductions over time. Summing up the proposed reductions at key interim dates (e.g. 2030, 2035, etc.) can then allow you to validate (or establish) appropriate interim targets.
It is important to remember that net-zero emissions can only be achieved if other organizations up and down your value chain are also decarbonizing their activities at the same time. Therefore, in consideration of this, the pathway to full decarbonization may be unclear. However, over time, as manufacturing, transport, and energy production are increasingly decarbonized, the carbon intensity of the goods and services needed by your business will in turn decrease and net-zero will become more achievable. Accordingly, fostering collaboration and maintaining open communication with your value chain partners will be essential to accelerating the transition and providing greater clarity around your own net-zero plan.
3.2.5. Step 5 - Monitor implementation and periodically revise your plan
Full decarbonization of the economy will take time. It is hard to anticipate developments five years from now, let alone in 30 years. Net-zero planning will necessarily be an iterative process, with plans adjusted periodically to reflect changing circumstances – including technological, economic, social and geopolitical – and as the whole economy moves towards net-zero emissions.
You should establish a regular process for monitoring the implementation of your plan, such as:
- At least once a year, formally review progress, assessing whether the assumptions on which the plan was based have shifted, whether the proposed actions have been taken, and the extent to which they are attaining the desired objectives
- Every five years, a new plan can be developed that draws on the lessons learned and charts the remainder of the journey towards net-zero
Next Steps
If you are ready to take the next step, learn more about how to join the Government of Canada’s Net-Zero Challenge.
Glossary
- Base Year
- A year in history against which a company’s emissions are tracked over time to compare it with future emissions. It must be a consecutive twelve months, either as a full calendar year or consecutive over two calendar years.
- Carbon dioxide equivalent (CO2 eq)
- A unit of measure for comparison between greenhouse gases (GHGs) that have different global warming potentials (GWPs). This unit of measure allows other GHGs to be expressed in terms of the GWP of one unit of CO2. To express GHG emissions in units of CO2 eq, the quantity of a given GHG is multiplied by its GWP.
- Decarbonization
- The process of reducing carbon dioxide emissions from a product, process, facility, or sector.
- Direct emissions
- Emissions from sources that are owned or controlled by a company or organization (GHG Protocol 2004: 97).
- Downstream emissions
- Emissions from downstream activities associated with the operations of a company. This includes processing of sold products, use of sold products, investments, franchises, downstream transportation and distribution, end-of-life treatment of sold products, and downstream leased assets.
- Emission factor
- A value that quantifies an average amount of emissions associated with an activity. For more details on Canada-specific emission factors, see the latest National Inventory Report for Canada.
- Emissions
- The release of greenhouse gases (or other substances) into the atmosphere.
- Emissions inventory
- A quantified list of emissions and emission sources for a company, organization, municipality, region, province/territory, or country.
- Energy Efficiency
- A measure of how effectively energy is used for a given purpose. It is a ratio or other quantitative relationship between an output of performance, service, goods, commodities, or energy, and an input of energy.
- Global Warming Potential (GWP)
- Allows the comparison of the global warming impacts of different gases or particles (such as black carbon). It is a measure of how much energy the emissions of 1 tonne of a gas or particle will absorb over a given period of time, compared to the emissions of 1 tonne of carbon dioxide. For the purposes of net-zero planning, use of 100-year GWP is recommended.
- Greenhouse gas (GHG)
- A gas that absorbs and re-emits radiation, resulting in the greenhouse effect, which contributes to a warming climate. For the purposes of this guidance and for the Net-Zero Challenge, GHGs include all of those that are subject to reporting for the Greenhouse Gas Reporting Program. This includes carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), sulphur hexafluoride (SF6), 13 different hydrofluorocarbons (HFCs), and 7 different perfluorocarbons (PFCs).
- Indirect emissions
- Emissions that are a consequence of the activities of a company but occur at sources owned or controlled by another company (GHG Protocol 2004: 99).
- Inventory boundary
- Allows a participant to determine what sources of emissions are the result of their activities. The inventory boundary determines what emissions will need to be addressed in order to reach net-zero emissions by 2050. Generally, the inventory boundary includes geographical boundaries and organizational boundaries.
- Mitigation strategy
- A practice, process, or technology that contributes to mitigation, e.g., enhancing energy efficiency and adopting renewable energy sources.
- Net-Zero Challenge
- A voluntary Government of Canada program encouraging businesses to develop and implement credible and effective plans to transition their facilities and operations to net-zero emissions by 2050.
- Net-zero emissions
- Achieving net-zero emissions means that anthropogenic emissions of greenhouse gases into the atmosphere are balanced by anthropogenic removals of greenhouse gases from the atmosphere over a specified period. For organizations, net zero GHG emissions is commonly considered as the condition in which emissions have been reduced such that only residual emissions remain, and offsetting is restricted to removal credits (ISO 14068).
- Net-zero plan
- A net-zero plan includes an emissions inventory and base year, interim targets, descriptions of the considered scenarios, pathways and mitigation strategies. It also includes an outline of how net-zero planning will be incorporated into a company’s governance and disclosures.
- Offset credits
- Represent GHG emissions reductions or removals generated from activities that are additional to what would have occurred in the absence of the offset project. These credits are generated from activities that go beyond legal requirements and a business-as-usual standard). Each offset credit generated by an offset project represents one tonne of carbon dioxide equivalent (CO2 eq) reduced or removed from the atmosphere.
- Organizational boundaries
- The boundaries that determine the operations owned or controlled by a company. These depend on the consolidation approach taken (equity share, operational control, or financial control).
- Scope
- Defines the operational boundaries in relation to direct and indirect emissions (GHG Protocol 2004: 101).
- Scope 1 emissions
- A company’s direct emissions. There are principally from electricity generation, heat, or steam, physical or chemical processing, transportation, and fugitive emissions (GHG Protocol 2004: 101).
- Scope 2 emissions
- A company’s indirect emissions. There are associated with the purchase of electricity, heating/cooling, and steam for own consumption (GHG Protocol 2004: 101).
- Scope 3 emissions
- A company’s indirect emissions excluding those covered in scope 2. Also known as value chain emissions (GHG Protocol 2004: 101).
- Upstream emissions
- Emissions from upstream activities associated with the operations of a company. These include purchased goods and services, capital goods, fuel- and energy-related activities, upstream transportation and distribution, waste generated in operations, business travel, and employee commuting.
- Value chain
- All business processes or activities involved in the production of a good or service for market, from conception to end use and beyond. A simplified value chain would include corporate services (e.g., marketing, logistics), research and development, inputs, assembly, distribution, sales, and after-sales service.
- Value chain emissions
- These are indirect emissions that may exist upstream or downstream of a company’s operations. “Value chain emissions” are also known as scope 3 emissions.
Abbreviations
- AI
- Artificial intelligence
- CH4
- Chemical formula for methane
- CO2
- Chemical formula for carbon dioxide
- CO2 eq
- Carbon dioxide equivalent
- DAC
- Direct air capture
- EV
- Electric vehicle
- GDP
- Gross domestic product
- GHG(s)
- Greenhouse gas(es)
- GWP
- Global Warming Potential
- HVAC
- Heating, ventilation and air conditioning
- ICE
- Internal combustion engine
- HFC
- Shorthand for a group of chemicals called hydrofluorocarbons
- ISO
- International Organization for Standardization
- kt
- Kilotonne(s)
- Mt
- Megatonne(s)
- NAICS
- North American Industry Classification System
- N2O
- Chemical formula for nitrous oxide
- PFC
- Shorthand for a group of chemicals called perfluorocarbons
- PPA
- Power Purchase Agreements
- REC
- Renewable Energy Credit
- SAF
- Sustainable aviation fuel
- SF6
- Chemical formula for sulfur hexafluoride
- ZEV
- Zero emission vehicle
Annex 1 - North American Industry Classification System
Based on the North American Industry Classification System (NAICS), businesses and organizations in the professional, scientific and technical services subsector (NAICS code 541) include the following industry groups and industriesFootnote 5:
5412 - Accounting, tax preparation, bookkeeping and payroll services
- 5413 - Architectural, engineering and related services
- 54131 - Architectural services
- 54132 - Landscape architectural services
- 54133 - Engineering services
- 54134 - Drafting services
- 54135 - Building inspection services
- 54136 - Geophysical surveying and mapping services
- 54137 - Surveying and mapping (except geophysical) services
- 54138 - Testing laboratories
5414 - Specialized design services
- 54141 - Interior design services
- 54142 - Industrial design services
- 54143 - Graphic design services
- 54149 - Other specialized design services
54151 - Computer systems design and related services
54161 - Management consulting services
54162 - Environmental consulting services
54169 - Other scientific and technical consulting services
54171 - Research and development in the physical, engineering and life sciences
54172 - Research and development in the social sciences and humanities
54182 - Public relations services
54186 - Direct mail advertising
54187 - Advertising material distribution services
54189 - Other services related to advertising
54191 - Marketing research and public opinion polling
54193 - Translation and interpretation services
54199 - All other professional, scientific and technical servicesFootnote 6
Annex 2 - Technology descriptions
Technologies described in
Electric heat pump
Description
An electric heat pump is a device that extracts heat from a low temperature place and delivers it to a higher temperature place. The two most common types of heat pumps are:
- air-source heat pumps - the heat source or sink is the outside air
- ground-source heat pumps - the heat source or sink comes from the ground
Applications
Heat pumps can be used for space heating, water heating and space cooling, replacing traditional HVAC technology (i.e. furnaces, boilers, ACs).
Considerations
Heat pumps are very efficient, often over three times more efficient than furnaces or boilers.
Heat pumps have a higher upfront cost than traditional HVAC equipment.
Additional resources
Heating and Cooling with a Heat Pump - Natural Resources Canada
District heating
Description
District heating involves distributing heat generated from a central plant to residences, businesses or industries in a local area. The central heat source can be generated from either from clean energy or fossil fuels.
Application
District heating is used to heat multiple buildings in close proximity.
Common applications include college and university campuses hospitals and densely populated residential or commercial settings.
Considerations
District heating has the potential to be a low-cost and efficient way to implement clean energy.
Requires coordination and a large upfront investment.
Additional resources
Combined Heat and Power Technology Fact Sheet Series: District Energy
District Heating - Energy System - IEA
Building envelope improvements
Description
Upgrading windows and doors to higher efficiency options can reduce heat loss from the building.
Controlling air leakage can greatly reduce heart loss from a building. A systematic identification of air leaks should be followed by sealing leaks through weatherstripping and caulking and by applying gaskets and tapes.
Adding insultation to a building’s walls, roof, attic, basement reduces the amount of energy required for heating and cooling. There are many different types of insulation materials, with different applications, efficiency and costs.
Applications
Residential and commercial buildings.
Considerations
Saves money on heating and cooling bills, while keeping building at a comfortable temperature.
Additional resources
Keeping the heat in - Natural Resources Canada
Smart thermostats
Description
A smart thermostat reduces the amount of energy required to heat or cool a building. It does this by learning the temperatures the occupants prefer and establishing a schedule that automatically adjusts to energy-saving temperatures while occupants are away or sleeping to help reduce energy usage.
Applications
Residential and commercial buildings.
Considerations
Saves money on heating and cooling bills, while keeping building at a comfortable temperature.
Additional resources
Smart Thermostats - Natural Resources Canada
Zero emission vehicles (ZEV)
Description
A ZEV is a vehicle that has the potential to produce no tailpipe emissions. They can have a conventional internal combustion engine (ICE) but must also be able to operate without using it.
There are three types of ZEVs:
- Battery-electric vehicle (BEV) – Run on electric motors, with rechargeable batteries. No tailpipe emissions.
- Plug-in hybrid electric vehicle (PHEV) – Have rechargeable batteries and a gas engine and can run in either mode. No tailpipe emissions when run in electric mode.
- Fuel cell vehicle (FCVs) – Use hydrogen to power an electric motor. No tailpipe emissions.
Applications
ZEVs can be used to replace traditional ICE vehicles.
Considerations
The upfront costs of ZEVs are typically higher than and ICE vehicles, while fuels costs are lower.
When choosing what type of ZEV to select, one should consider available charging infrastructure, and the range of the vehicle required.