Net Zero & Beyond: How Global Small Business Platform Xero Has Its Sight Set On A Sustainable Future

This past year has underlined a multitude of global issues, including those related to diversity and social justice as well as climate change and the environment. And while many brands are working to do their part, ones of a global nature with a larger footprint, workforce and set of resources are primed to take the lead. For global small business platform, Xero, building a fast-growing but sustainable business means consciously managing our environmental impact, helping to build thriving communities, and cultivating an engaged workforce.

Climate change and the environment has been especially front of mind for many of our people and customers around the globe. That’s why Xero introduced our environmental sustainability program called Net Zero @ Xero and since 2019 has been committed to carbon neutrality, offsetting 100% of our global organisation’s scope 1, 2 and 3 greenhouse gas emissions across owned and operated businesses in Australia and internationally, including New Zealand, the United States, Canada, South Africa, the United Kingdom and Asia.

In FY21, Xero was certified carbon neutral by the Australian Government’s Climate Active program, which is one of the world’s most established and respected carbon neutrality programs.

We achieved carbon neutrality by purchasing certified carbon offsets from projects in Indonesia, India and New Zealand. These projects are designed to restore indigenous forests and protect endangered species, soak up carbon dioxide directly from the air and generate clean energy with the aim of reducing future emissions.

Xero also recently expanded our sponsorship of the Fishermans Bay Conservation Project near Akaroa in New Zealand (which is also owned and operated by a Xero small business customer). That means that in addition to the Fishermans Bay project’s carbon benefits, we’re also directly supporting biodiversity-related activities such as yellow-eyed penguin sanctuary habitat management; possum and predator pest control work; noxious weed control work; and provision and maintenance of safe tracks for public and educational groups.

More information about Xero’s FY20 carbon disclosure, emission reduction plans, and the projects we selected to offset our emissions, can be viewed on the Climate Active website.

While Xero sees the offsetting of our emissions as important, we also recognise the importance of actively working to minimise our footprint. An important step Xero intends to take in FY22 is to formalise our emissions reduction plans and set science-based targets. Here are some of the reduction initiatives already underway:

  • Reducing electricity consumption via efficiency measures within Xero offices such as sensor and timer lighting, extensive use of LED lighting in all offices, working with air conditioning engineers and landlords to improve the efficiency of heating and cooling systems
  • Cutting waste production and increasing recycling rates including e-waste collection and compost bins in some offices
  • Making procurement decisions that consider the carbon intensity of our suppliers and our climate impact
  • Evolving our flexible work policy to allow our people to choose how many days a week they work from home and how many in the office, with their manager’s approval. Xero expects this will reduce carbon emissions associated with a reduction in people commuting to work and travelling for work.
  • Encouraging our people to use alternative modes of transport to get to work, such as cycling, by offering ‘end of trip’ facilities including showers, bike cages and lockers
  • Purchasing Forest Stewardship Council-certified paper stock for jobs that require printing
  • Proactively working with Amazon Web Services (AWS), our cloud services provider, to determine how it can operate its infrastructure more efficiently and mitigate future emissions.

We are also taking actions to ensure our financial investments align with our environmental commitments. Last year, we invested NZ$10 million of Xero’s cash holdings into BlackRock’s new Liquid Environmentally Aware Fund. We want to see whether we can meet our business objectives while investing in securities issued or guaranteed by entities with strong environmental impact practices (as verified by third parties and BlackRock’s proprietary environmental, social and governance model). We will monitor the outcome and consider further investment over time.

We are pleased with our environmental progress to date, however we’re not just dedicated to our own sustainability – we’re committed to supporting the companies we support and partner with to be sustainable as well. With small and medium-sized enterprises making up 90% of the world economy, we believe our greatest impact is through enabling our entire value chain to operate sustainably, including our more than 2.7 million subscribers globally. Through pairing free education, technology and referrals to specialists, Xero looks to continue our work around enabling small businesses to create positive social and environmental impact across everything they do.

We already offer public resources including recently running a ‘Xero Hour’ live webinar, where I shared information about how to build a sustainable and ethical business. Other resources include blogs about reducing single-use plastic and creating a sustainably-minded business, a small business guide about how to make small business environmentally sustainable and an episode of Xero Now about building a sustainable business.

Moving forward, Xero is committed to expanding our disclosure around climate-related matters and we are currently developing a roadmap for reporting in line with the Task Force on Climate-related financial Disclosures (TCFD) risk assessment and disclosure framework. We’re also exploring opportunities across the business to further support our customers and partners in the transition to a low carbon economy. All corporations and organisations globally need to be held accountable for supporting and helping the world around us as much as possible, and at Xero we’re looking forward to our program evolving and our positive impact increasing with each year.

For information on Xero’s SEI & D&I initiatives, visit

Anne Ascharsobi is Director of Social and Environmental Impact at Xero.