Three questions to inform your decarbonisation strategy
At a glance
Investing in decarbonisation strategies is critical to achieving net zero goals. Organisations must find new ways of working and doing business while lowering carbon emissions. Businesses need to produce meaningful decarbonisation plans with solid roadmaps that demonstrate how to decouple growth from emissions, while minimising risk. Here’s where to start.
Climate change is at the core of the world's efforts to decarbonise. Identifying better ways of living, working and doing business through lowering fossil-fuel-producing greenhouse gas (GHG) emissions is a high priority for forward-thinking organisations. Leaders that address decarbonisation beyond just a policy, regulation and compliance are the ones who will adapt and thrive in a net zero world. Effective climate change strategy focuses on assessing your baseline carbon emissions, embedding mitigating programs into your plan and adapting your business model towards a low carbon economy. This article discusses where to begin and offers best practice guides on moving forward.
It's not only regulatory bodies, non-governmental organisations and broader society putting pressure on organisations to decarbonise. Investors are firmly looking to businesses for meaningful decarbonisation strategies, alongside a demonstrable roadmap on how to decouple growth from emissions while minimising risk. Decarbonisation efforts must align with the organisation's purpose, beliefs and values to gain real impact. Achieving this requires transformative thinking and a seismic shift that pulls in the entire business – a whole ecosystem approach. Where to start? Consider the following three questions.
1. Do you understand your emissions profile?
Start by deeply understanding your baseline GHG emissions profile and broader consumption across every possible output. Gather your scope 1, 2 and 3 emissions by identifying carbon sources throughout the organisation. Digital solutions provide an efficient and convenient way to collect accurate emissions assessments. Gaining clear visibility of your baseline emissions maps the effectiveness of future targets and measures the success of your strategy. Embedding the correct reporting and metrics to track current and future status sets a strong measure of progress.
As part of this first question, gathering a systematic inventory of your emissions, energy spending, energy-using assets, utility contracts, and metered systems is critical. Do you know the carbon intensity of your electricity sources and whether the grid currently supplies or is planning to switch to green energy? The approach is more complex for carbon-intensive organisations. Transitioning to greener energy and fuel sources requires more integrated planning and risk analysis. More often, these organisations are implementing sophisticated energy and GHG management technology tools and platforms to gain visibility of emissions monitoring and improve planning.
2. How are you actively trying to decarbonise?
3. Is your business model at risk or stands to benefit from a transition to a low-carbon economy?
GHD Advisory guidance:
- Working through the above three areas within a structured, impactful framework is a strong starting point to inform your sustainability decision-making. Once emission reduction, mitigation and new opportunity pathways are explored and assessed, roadmaps and implementation plans demonstrate response and progress to maximise the commercial value to the organisation.
- Decarbonisation efforts must align with the organisation's sustainability beliefs, values and goals. Stakeholder involvement and engagement in decarbonisation shouldn't be an afterthought. Focusing on what we know now, we understand where clients are on their journey and where to fill in the gaps.
- Showing leadership and ambition means establishing a decarbonisation strategy that thoroughly captures and understands climate change impacts and vulnerabilities across the business. Having data-based tools and methodologies to accurately assess your current state of play to inform thinking and decisions sets the groundwork. Identifying energy conservation programs forms part of the ongoing roadmap.
- Organisations can reduce their carbon footprint while advancing their business strategy and profit margins by exploring new products and services that reduce emissions while enabling growth.
- It's not a case of if but when climate-disclosure regulations will become mandatory. Proactively report and communicate your decarbonisation plans to avoid last-minute scrambling.
Learn more about how GHD Advisory can help you deliver on sustainability goals including program visioning and governance, stakeholder engagement, materiality assessment and ESG programming.