As the world turned its attention to the 27th United Nations Climate Change Conference (COP27) last month, Xero is focusing on the actions they can take across their business and the communities they serve, to reduce their environmental impact.

The climate crisis is affecting all of us, and every business has a role to play in supporting the transition to a net-zero economy.

Xero takes its responsibilities as a sustainable organization seriously, and is committed to taking meaningful action on climate change.

Building on ‘Net Zero @ Xero’

Xero are proud to be on a carbon reduction journey, called ‘Net Zero @ Xero’. They started the journey by offsetting 100% of their carbon emissions in 2019 and committed to doing so every year. They do this by purchasing carbon credits across certified environmental projects and conservation schemes.

One project that Xero is committed to fully sponsoring until 31 March 2024 is the Fishermans Bay Permanent Forest Sink Initiative (PFSI) on the Banks Peninsula in New Zealand, who are doing incredible conservation work, including protecting the breeding habitat of endangered yellow-eyed penguins.

The next milestone in Xero's journey was to receive carbon neutral certification by the Australian Government’s Climate Active program, and they’re committed to maintaining this.

They’ve now taken the next step towards net-zero emissions by setting emissions reduction targets in line with climate science. Setting these targets provides a clear direction to reduce their greenhouse gas emissions, while building on current initiatives.

Xero's climate targets

Xero has set near term targets to reduce Scope 1, 2 and 3 emissions that align with the recommendations of the Science-Based Targets initiative (SBTi). These targets support the Paris Agreement goal of limiting global warming to well below 2 degrees Celsius above pre-industrial levels.

They’ve set the following targets:

• 42% reduction in Scope 1 and 2 emissions from FY20 by FY30
• 17% reduction in Scope 3 emissions from FY20 by FY30
• Net-zero* emissions no later than FY50

Scope 1 emissions cover direct emissions from a company’s owned or controlled sources. This includes the fuel burned by cars used by some of Xero’s sales teams.

Scope 2 covers indirect emissions from purchased electricity, steam, heating and cooling that they consume. This includes the energy used in the buildings with Xero offices.

Scope 3 includes all other indirect emissions that occur in a company’s value chain. This includes cloud hosting, business travel, our people commuting to work, catering in Xero offices and at Xero events, laptops and IT equipment.

Xero will work towards achieving these targets by focusing on the areas of increased renewable energy uptake, being more strategic about business travel, and switching to more sustainable catering wherever possible.

These targets build on existing initiatives, such as purchasing carbon neutral electricity across a number of our offices; reducing electricity consumption through things like sensor and timer lighting; and providing end-of-trip facilities in many of our offices for alternative modes of transport.

They’re also working with their biggest technology provider, Amazon Web Services (AWS), to understand their environmental impact when building products and services. Xero’s AWS emissions will reduce over time as AWS works towards its goal of 100% renewable energy by 2025.

A team effort

Working towards these targets will require Xero to more carefully consider the environmental impact of many of their actions and decisions.

Like many other businesses, they are on a journey. They hope that by setting these targets and taking action to reduce their emissions, they can contribute to a more sustainable economy and inspire others to do the same.

To find out more about Xero’s approach to sustainability please visit xero.com/sustainability/environment.

Xero is a leading cloud-based accounting and business platform that provides accountants and their business clients with shared access to real-time financial data. Not just for small and medium-sized businesses and accounting practices, Xero also helps large, national, and international accounting firms to grow and thrive as well.

You can access the PrimeGlobal Xero partnership page here.