Fortescue, IKEA and Lendlease have been identified as global decarbonisation leaders in a report from research and advocacy organisation Climate Integrity.
The report, Real Zero Leadership: Positive Practice in the Net Zero Pledges of Australian Companies, from Climate Integrity and the Institute for Sustainable Futures at the University of Technology Sydney highlights how the three companies are shifting from ‘net zero’ to ‘real zero’ strategies and “redefining what corporate climate leadership could and should look like both in Australia and around the world”.
While net zero relies on carbon offsets and unproven future technologies, real zero is an approach to decarbonisation that requires clear and transparent timelines for fossil fuel phase out.
Despite operating in sectors labelled harder-to-abate like mining, construction and retail, the companies are taking a vanguard position on emissions reductions, investing in the technology to reach ‘real zero’ and demonstrating a viable and profitable economic pathway to decarbonisation.
The report outlined market-leading practices and approaches to decarbonisation taken by each of the companies and looks at how:
- Fortescue is the only heavy industry company in the world committed to phasing out fossil fuels without reliance on offsets.
- IKEA is committed to becoming a circular business and in Australia, diverted more than one million products from landfill in FY24.
- Lendlease is committed to completely phasing out fossil fuels in construction and reaching absolute zero by 2040.
Fortescue, IKEA and Lendlease are exploring a new cross-sector collaboration on climate advocacy and idea-sharing to solve the most intractable decarbonisation challenges.
“The ambition displayed by Fortescue, IKEA and Lendlease is redefining what corporate climate leadership could and should look like both in Australia and around the world,” Climate Integrity Director Claire Snyder said.
“Our report shows that companies with market-leading decarbonisation strategies have shifted focus from ‘net zero’ to ‘real zero’, and provides three case studies to show that not only is it possible — it is already happening and it’s good for business.”
Heavy industry can cut fossil fuels right now
Fortescue Metals CEO Dino Otranto said: “Heavy industry can cut fossil fuels — not someday, but right now. Fortescue, Lendlease and IKEA are showing that business can turn the tap off on fossil fuels as fast, or even faster, than the science says is necessary.
“There are new and better ways of operating, through lower cost, more efficient technologies. Fortescue is seizing these opportunities rather than foisting the problem on the next generation. The fossil fuel era is winding down and Fortescue intends to be at the forefront of what comes next.
We need more action, now
Lendlease Group Head of Sustainability Cate Harris said: “Radical decarbonisation is required across the built environment sector and target setting has a critical role to play in driving the scale and pace transformation.
“Lendlease’s ambitious Absolute Zero target continues to send a strong market signal to our whole value chain, giving our suppliers the confidence to invest in innovative production technologies, lower carbon products and construction techniques. There is some positive momentum, but we need more action now.
“One of the most powerful roles we can play is to signal demand for lower carbon products. On Watermans Residences at One Sydney Harbour, we used the upfront carbon reduction commitment across the whole Barangaroo South development as a catalyst to actively engage with the supply chain to source a low carbon product for the unique façade.
“We successfully procured aluminium that was manufactured using hydropower, a product that is 60% less carbon intensive. This delivered a ~40% upfront embodied carbon reduction for the total glazing and façade works package. Our success on this project suggests that manufacturers are ‘ready to abate’ but will require a cross-sectoral increase in climate ambition and demand to accelerate decarbonisation at the pace and scale required.”
Investing in rapid decarbonisation initiatives
“At IKEA, we’ve achieved a reduction in our operational climate footprint by 89% since FY16, while growing revenue by 68%,” said IKEA Australia and New Zealand Public Affairs Leader Lauren Sinfield.
“These results show that investing in rapid decarbonisation initiatives and delivering commercial success is absolutely achievable — together. In Australia, we recently completed a large-scale PV solar and battery installation at the Marsden Park Distribution Centre — the beating heart of our fulfillment operations.
“This project takes onsite renewable power generation to around 70% of energy requirements, which is significant, and with battery storage, capable of supporting the 24-hour operations at the site.”
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