- By Tamils in Finance
- May 26, 2021
- No responses
As we are all aware, there is an urgent need to address climate change to ensure that future generations can have a sustainable planet. The public and private sector both have a role to play in addressing the challenge. Governments need to enact policies that require the reduction of greenhouse emissions to ensure that we limit the planet’s temperature increase to 1.5% or less in accordance with the Paris Accord. Corporations need to step up and meet stakeholder and employee expectations to reduce their own emissions by accelerating decarbonization and meeting bold climate action goals. The challenge for many companies, however, isn’t establishing sustainability ambitions; it is converting those ambitions into action.
I recommend four steps companies can take to accelerate their sustainability journey.
Step 1: Know your baseline and your potential
Corporations should start the decarbonization process by outlining baseline emissions by source taking into account Scope 1 emission (direct emissions from owned assets), Scope 2 emission (indirect GHG emissions associated with the purchase of electricity, steam, heat, or cooling) and Scope 3 emission (the result of activities from assets not owned or controlled by the organization, but that the organization indirectly impacts in its value chain). I suggest using a single, digital solution to collect and aggregate the data which keeps all your information in one place and makes it easier to analyze and share data with stakeholders. Companies should also model their goals on science-based targets as a best practice. In doing so, their ambitions are more likely to have an evidence-based foundation and maximized return on investment.
Step 2: Create and announce targets
Research done by Schneider Electric* shows that making a public announcement of sustainability aspirations encourages companies to set more ambitious goals, meet those goals faster, and boost the probability of success. At Schneider, we have made our own decarbonization goal announcements, including carbon-neutral operations by 2025 and a net-zero supply chain by 2050. Formal announcements hold us accountable and have helped us become the world’s most sustainable corporation. And we have helped companies like Clorox, PepsiCo, and Greif announce their own science-aligned targets, too.
Step 3: Deploy programs
There is no one-size-fits-all approach to decarbonization. A wastewater treatment plant will need to develop a much different plan than a hospital. However, for most organizations, the path to decarbonization involves a unique combination of data management, infrastructure upgrades, innovative technologies, and digital solutions, including:
- Energy management: tracking, performance, and analytics solutions
- Resource optimization: energy performance contracting, enterprise efficiency services, building management systems, connected operational technology, and services
- Low–carbon replacements: renewable energy, alternative fuels, electrification, and Energy as a Service.
- Emissions balancing: carbon offset projects.
- Supply chain neutrality: sustainable procurement practices, lifecycle assessments, and circular business models.
In my experience, decarbonizing results in more than just decreasing emissions — it will also have a positive impact on your company’s bottom line.
Step 4: Monitor and adjust
Decarbonization isn’t a linear process, and over time, the company’s goals and strategies may change. The company may need to recalibrate depending on progress and access to experts to speed up the transformation. To deliver on the climate ambition it is important to keep the conversation going, not just with the company’s stakeholders, but also with suppliers and customers to ensure collaboration and end-to-end decarbonization.
A healthy planet isn’t just an option; it is a necessity. Governments, Corporations, Academia and individuals all have a role to play in addressing the biggest challenge of our lifetime.
Susan Uthayakumar is the President, Sustainability Business Division, Schneider Electric.
This article is re-published from the May 2021 issue of “Street Talk”, TiF’s flagship publication. Interested in writing for us? Click here for our submission guidelines.