Chapter 3: Building a Decarbonisation Strategy
Published July 23, 2020
Download these additional guides for reference to support your understanding and net-zero emissions strategy development:
Net Zero Carbon has introduced the topics of climate change, decarbonisation, and the role businesses can play in decarbonisation. This section will present a high-level overview of the steps a business should take a to develop a plan to reduce its GHG emissions.
GHG footprinting
GHG footprinting must become embedded in business practice. A business’s direct operations and indirect impacts should be quantified on an ongoing basis and used to inform a decarbonisation strategy. There are two components to developing robust GHG footprints. The first is in the data sources used to quantify the emissions the business is associated with. The second is in the framework that is used to translate those data sources into a coherent statement of the GHG footprint.
The importance of data
As the saying goes, ‘you can’t manage what you don’t measure’. A GHG footprint must be founded upon robust data collection and a defined methodology for estimating the GHG emissions that the data represents.
Some data streams are trivial to manage, and trivial to translate into GHG emissions (usually as CO2 equivalent – CO2e). For example, business energy supplies of electricity and gas can have data provided easily in the form of kWh. The associated emissions are directly related to the quantity of energy delivered to or consumed by the business.
However, other data streams of importance to a business’s emissions are more difficult to manage, and the methods for modelling GHG emissions from them are less obvious. These might include the business’s transportation activities, those of its supply chain, and the downstream impacts of the products or services the business produces.
Data management is made easier by the implementation of energy and GHG data management software, which can greatly reduce the ongoing administrative burden of determining climate impacts and enhance the visibility of efforts to reduce the emissions of a business.
A framework for GHG footprints
Once a business has modelled its emissions, the possibly large number of individual contributions should be collated using an appropriate framework. The globally accepted framework for doing this is the GHG Corporate Standard. It categorises business emissions into three Scopes that describe direct emissions, upstream indirect emissions from energy, and other indirect emissions.
See our guide
for more detail on the GHG Corporate Standard and how it can help businesses interpret and communicate their GHG footprints.
Target setting
A GHG footprint provides a basis for action by a company. By understanding the different emissions sources and their magnitudes, a business can decide which areas to focus on for reductions, and begin to think about the methods to be used to reduce emissions. The strategy’s ambition can be communicated on the highest level using a climate target. These can be short, medium, or long-term. Climate targets are invariably emissions reductions targets. We discuss two common types of climate target – net zero targets and science-based targets (SBTs) – in one of our guides.
Auditing
The choice of measures to take to reduce emissions can be informed by a site audit. Audits are guided by anomalies and potential opportunities identified via a desktop analysis of the collected data but might also reveal unexpected areas with potential. An audit of assets and processes should be carried out by an experienced energy efficiency or sustainability professional that can quantify climate impacts and estimate the costs of proposed improvements, broadly following the structured approach below:
- An initial walk-through with some minimal interviews with site-operating personnel, a brief review of facility utility bills and other operating data, and a walk-through of the facility to become familiar with the building operation and to identify any glaring areas of energy waste or inefficiency.
- A general audit to expand on the preliminary audit by collecting more detailed information about facility operation and by performing a more detailed evaluation of energy conservation measures. Additional metering of specific energy-consuming systems is often installed and in-depth interviews with facility operating personnel are conducted to provide a better understanding of major energy consuming systems and to gain insight into short- and longer-term energy consumption patterns.
- Investment-grade audit, in which both energy and non-energy investments are rated on a single set of financial criteria that generally stress the expected return on investment (ROI). The projected operating savings from the implementation of energy projects must be developed such that they provide a high level of confidence.
Audit evaluation/Implementation
Audit results should be considered using a return-on-investment (ROI) logic to identify which measures can create emissions reductions as quickly as possible and at the lowest cost.
A range of possible initiatives should be evaluated so that appropriate individual projects can be identified and implemented. As always, a structured approach is advised, including:
- Evaluation of compatibility within the strategy framework
- Discussions with individual stakeholders
- Expected implementation costs and deployment times
- Projected ROI from the investment grade study
- Potential financing options
Fundamental to achieve objectives will be the deployment of robust and standardised methodologies to evaluate in a dispassionate and independent way the success of individual initiatives. The International Performance Measurement and Verification Protocol (IPMVP) defines standard terms and suggests best practise for quantifying the results of energy efficiency investments and increase investment in energy and water efficiency, demand management and renewable energy projects. Similar and specific reporting protocols can be applied to wider emission reduction programmes.
