Insights
August 1, 2023

How Companies Can Create a Decarbonization Action Plan

Learn about different ways to lower emissions, the significance of granular data, and how companies can go about designing and implementing their decarbonization solutions.

Rebekah Süsserott
How Companies Can Create a Decarbonization Action Plan

Of all the things a business can do to lower emissions, one of the most crucial is having a decarbonization action plan. By putting together a comprehensive playbook that contains specific solutions and actionable steps, companies can work toward their sustainability goals with higher degrees of confidence and efficiency. As a follow-up to our series on measuring emissions and setting net zero targets, we’ll explore the importance of having a well-designed carbon reduction strategy, and provide tips to build one for your organization. 

Measuring your emissions and setting targets

To create an effective decarbonization plan, the first step is measuring your company's emissions. This allows you to pinpoint emission hotspots, establish a baseline year for emission reduction calculations, and track your progress effectively.  

Once you have a clear understanding of your carbon footprint, the next step is setting ambitious, but achievable, sustainability targets. The Science Based Targets initiative (SBTi) is a widely recognized approach, aligning your goals with the aim of limiting global warming to 1.5 degrees Celsius by 2050.

Additionally, companies can set personalized interim targets that take into account industry standards, competitor practices, and customer expectations.

Creating a decarbonization action plan 

With targets set and emission hotspots identified, companies can begin to construct a detailed pathway toward decarbonization. At its core, the plan should outline specific solutions, implementation timelines and strategies to reduce emissions.

At times, deciding which options to implement can be a bit of a challenge. So, to help streamline and simplify the process, we created our Climate Program: an interactive dashboard that helps companies choose and manage their decarbonization efforts. 

By taking into account your company's input data and operations, our platform matches you with tailor-made recommendations informed by the expertise of our decarbonization team.

The Climate Program includes estimates of emission reductions, cost analyses, and a decarbonization pathway graph to illustrate the impact of solutions against what would be your business-as-usual (BAU) emissions and various targets. 

Companies also have the ability to add their own initiatives into the portal. If a business is already engaged in decarbonization efforts, they can seamlessly integrate them into the platform.

Different types of decarbonization solutions

From just a few weeks to months and even years, the time and effort required to implement a solution varies significantly.

For ideas that are smaller in scale and faster to initiate, these can include: transitioning to economy flights for business travel, opting for eco-friendly hotels, promoting a higher percentage of remote work, and encouraging employees to use public transportation for commuting.

Medium-term efforts could be purchasing products with lower carbon footprints, using packaging made of recycled materials, opting for vegetarian catering, and putting in place sustainable procurement policies.

In terms of solutions that are on the bigger end of the spectrum, companies can work on increasing a building’s energy efficiency, changing suppliers, or even overhauling their entire manufacturing process.

Examples of these types of measures in action could be of a hotel installing a more efficient water heating system, upgrading HVAC systems, or introducing an anaerobic digester to process food waste onsite. 

These kinds of initiatives would certainly require more effort and planning, but the results that they yield could have a major impact on reducing a company’s emissions as well.

For one of our customers, SaladStop!, we collaborated on launching the first Net Zero F&B store in Southeast Asia. We were able to provide insights that assisted the team with sourcing ingredients, partnering with local vendors, and integrating upcycling into the construction process.

How companies should approach using offsets

Once an organization has introduced measures to reduce their carbon footprint as much as possible, they can then consider offsetting to address any remaining emissions. 

Here, it's critical to mention that using offsets can open a can of worms in the sense that there are many criteria that should be met, and if they’re not, it can make a company vulnerable to claims of greenwashing. 

In other words, it’s important to align your efforts with the carbon mitigation hierarchy, which essentially means that you focus on lowering emissions within your operations before relying on offsets.

To ensure that you’re truly making a positive impact when it comes to minimizing your carbon output, it’s crucial to obtain high-quality offsets that are certified by leading verification bodies (e.g. American Carbon Registry, Climate Action Reserve, Verified Carbon Standard or Gold Standard). 

Also, as a long-term goal, it’s vital to continuously reduce reliance on offsets as time goes on. We will cover using offsets in more detail in a future piece in this series. Subscribe to our newsletter to stay updated.

Preparing for a zero-carbon economy

Aside from environmental concerns, the move toward lowering emissions is being fueled by shifting customer demands and investor expectations.

As sustainability increasingly gets seen as a key issue, the more likely it is that financial institutions will expect to see that a company has made decarbonization a central point of its long-term vision.  

In addition, it’s important to note that the sooner an organization begins working on solutions, the better positioned they’ll be to avoid higher implementation costs down the road. For instance, Singapore has a carbon tax that increases over time. As it gradually rises, it’s likely to carry over and affect the expenses associated with adopting certain measures. 

For context, when assessing a decarbonization solution, if the abatement cost (dollar amount per ton of CO2e avoided) is less than the carbon tax, then the suggested project makes financial sense.

Also, while a lot of attention is focused on the importance of big companies working toward decarbonization, it’s key to remember that supporting small and medium-sized enterprises (SMEs) in the transition to a more sustainable economy is vital as well.

Progress takes time

Ultimately, for every business, it’s necessary to recognize that emission reduction is an ongoing effort, and not something that can be relegated to a one-time task.

Regularly measuring your carbon footprint, adopting new strategies, and reevaluating your plan's effectiveness are critical components of a successful approach. 

Although the initial planning may require significant work upfront, establishing a robust decarbonization strategy makes a company’s sustainability efforts far more manageable, measurable and likely to succeed.

In conclusion, embracing an action plan is essential for businesses seeking to lower their emissions and contribute to a zero-carbon future. 

With well-structured solutions, organizations can confidently navigate their environmental responsibilities and make a meaningful impact in the fight against climate change. 

Through collaboration, innovation, and dedication, companies can become powerful agents of positive change, setting an example for a greener, more sustainable business landscape.

Interested in learning more about how Unravel Carbon can help companies create a decarbonization action plan? Get in touch with us.

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