Despite net zero pledges covering 93 percent of global GDP, 2024 marked the first year global average temperature exceeded 1.5°C while worldwide fossil fuel emissions increased by 0.8 percent
Against this backdrop of corporate climate commitments falling short, research from Climate Integrity and the Institute for Sustainable Futures at the University of Technology Sydney has identified three companies operating in Australia that are taking a different approach to decarbonisation.
Fortescue, IKEA and Lendlease have moved beyond traditional net zero strategies that rely heavily on carbon offsets and are adopting real zero approaches that focus on reducing absolute emissions through direct fossil fuel phase out. These companies, operating in sectors often seen as difficult to decarbonise such as mining, retail and construction, are showing that emissions reduction is not only possible but already underway at scale.
“The ambition shown by Fortescue, IKEA and Lendlease is reshaping what corporate climate leadership can look like in Australia and globally,” said Claire Snyder, director of Climate Integrity. “Our report shows that companies pursuing real zero are already implementing meaningful emissions reductions, and their approaches are working.”
The mining giant reinventing heavy industry
Fortescue’s decarbonisation program represents one of the most comprehensive efforts in the global resources sector. As one of the world’s largest iron ore producers, the Western Australian company is the only major heavy industry business aiming to phase out fossil fuels entirely without relying on offsets or carbon capture. Fortescue has committed to achieving real zero scope 1 and 2 emissions across its Australian terrestrial operations by 2030, and net zero scope 3 emissions by 2040.
The company has allocated 6.2 billion US dollars to decarbonise its Pilbara operations. This includes a full shift to renewable electricity by 2030. Fortescue is also developing new industrial processes including hydrogen production, ammonia manufacturing, alternative shipping methods and metals processing.
“This recognition reflects the work we are doing to show that heavy industry can shift away from fossil fuels, not in the future but now,” said Dino Otranto, Fortescue’s chief executive officer. “Fortescue, Lendlease and IKEA are demonstrating that business can transition faster than expected using more efficient technologies.”
Fortescue also takes a collaborative approach to knowledge sharing. It has created an open source platform for sharing lessons from its energy transition, offering its technology and expertise to others. This moves decarbonisation from a proprietary effort to a shared opportunity.
Rather than viewing climate targets as a cost, Fortescue sees them as a business priority. By investing in existing technologies, it aims to create economic and environmental value. “We are choosing to lead rather than leave the responsibility to others. The fossil fuel era is ending and Fortescue plans to be part of what replaces it,” Otranto said.
Retail innovation through circular design
IKEA’s experience shows how global retailers can reduce emissions while maintaining commercial performance. The furniture retailer, visited by 899 million people in 2024, has cut its operational climate footprint by 89 percent since financial year 2016 while growing revenue by 68 percent over the same period.
“At IKEA, we have reduced our operational climate footprint by 89 percent since financial year 2016 while growing revenue,” said Lauren Sinfield, public affairs leader at IKEA Australia and New Zealand. “This shows that climate action and commercial results can go together.”
In Australia, IKEA has installed solar panels and battery systems at its Marsden Park distribution centre, which supports the bulk of its operations. The system generates about 70 percent of the site’s power, with storage to maintain round the clock operations. The setup not only cuts emissions, it improves cost predictability and operational reliability.
Beyond energy, IKEA is changing its entire business model. It has committed to becoming circular by offering buy back programs and resale platforms for used items. In financial year 2024 alone, more than one million products were kept out of landfill through these efforts. This approach reduces emissions while opening new revenue opportunities.
The company is also working across its supply chain to eliminate fossil fuels from production, transport and retail. With science based targets to halve emissions by 2030, it aligns long term climate goals with business operations and reports progress transparently.
Construction industry shifts gears
Lendlease is addressing one of the most complex sectors for emissions reduction. The Australian real estate firm, with 9.2 billion Australian dollars in listed revenue in 2024, has set a target of absolute zero carbon by 2040 across scopes 1, 2 and 3. This goal excludes the use of offsets, instead requiring actual emissions cuts across all parts of the business including development, investment and tenant services.
The company’s Mission Zero plan ensures that climate targets are integrated into all business areas. Everyone from senior leadership to on the ground teams shares responsibility for meeting them.
At its Watermans Residences project in Sydney, Lendlease worked with suppliers to source low carbon materials. This included aluminium made using hydropower, which reduced the material’s carbon intensity by 60 percent. That change alone lowered upfront embodied carbon by around 40 percent across the building’s facade.
“One of the most important roles we can play is signalling demand for lower carbon products,” said Cate Harris, group head of sustainability at Lendlease. “We used our broader carbon reduction targets to engage the supply chain and source alternatives.”
The project showed that suppliers are prepared to act when there is clear demand. “Our work suggests that manufacturers are ready, but they need support through stronger demand and clearer goals,” Harris said.
Lendlease also shares its knowledge to support broader industry change. It publishes resources on emissions reduction and works to define scope 3 reporting boundaries to encourage consistency. This collaborative stance reflects its view that decarbonisation is a shared responsibility, not a competitive edge.
Cross sector collaboration
A key theme across the efforts of Fortescue, IKEA and Lendlease is the potential for joint action. These companies are exploring formal partnerships focused on climate advocacy and knowledge exchange. This kind of collaboration, spanning mining, retail and construction, could influence suppliers and support more consistent climate expectations across sectors.
If these businesses combine their purchasing power and align their expectations, they can help drive markets towards lower emissions alternatives.
“Fortescue, IKEA and Lendlease are helping set a new benchmark for real zero,” said Snyder. “Their leadership shows what is possible when companies integrate targets into their business and take responsibility for implementation.”
Together, they have the ability to redirect capital away from emissions intensive activities and into lower carbon solutions. By sharing knowledge and coordinating efforts, they can help reduce transition costs and speed up progress.
Rethinking corporate climate action
The approaches taken by Fortescue, IKEA and Lendlease share features that distinguish them from standard corporate environmental responses. They treat emissions reduction as part of business planning, not an add on, and report outcomes transparently.
They also focus on reducing emissions directly, rather than relying on offsets. This real zero model requires operational changes and new ways of working, rather than adjusting carbon accounting.
Their experience shows that companies in high emitting sectors can achieve significant reductions when they take action across their operations. These approaches offer practical models that others can adapt, and their collaboration shows the value of working across sectors.
As temperatures continue to rise and net zero promises fall short, these companies provide evidence that different choices can lead to measurable outcomes. Their examples suggest that business strategies aligned with climate goals can deliver both environmental and commercial value.
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