The Decarbonization Journey

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The decarbonization journey

7 steps that can help to steer your organization in the right direction

Based on our industry-wide decarbonization expertise and client work experience, we have outlined a 7-step decarbonization journey that can help to steer your organization in the right direction.

On the second day of COP26 global leaders agreed to end deforestation by 2030. These and other action plans like e.g., the proposed “Fit for 55” climate package that seeks to cut EU carbon emissions, will significantly impact all businesses. Early engagement with the alignment criteria (e.g., Paris Agreement goals), will contribute to a smoother transition. Based on our industry-wide decarbonization expertise and client work experience, we have outlined a 7-step decarbonization journey that can help to steer your organization in the right direction.

 

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The decarbonization journey in 7 steps

1. Materiality & vision

In order to embark on your decarbonization journey, an in-depth understanding of your baseline and of the industry are essential; perform a materiality assessment, map and prioritize your stakeholders and perform a competitors benchmark. Based on these insights, it is key to determine what role you want to play. Do you solely want to comply with upcoming regulations, or do you have the ambition to make a more significant and tangible impact towards a sustainable future?

2. Plan & set target

When you have clarity about your current position, it is time to translate your ambition into decarbonization targets. Develop a strategic reporting roadmap, perform capability-gap analysis, and decide how and when you want to set targets. Consider whether using guidance from the Science-Based Targets Initiative (SBTi); which is an initiative that provides companies with a clearly-defined path to reduce emissions in line with the Paris Agreement goals, makes sense.

3. Governance & sustainment

It is essential that your vision and targets become rooted in your company process and culture to enable successful decarbonization initiatives. Enterprise Resource Planning (ERP) can help to manage and integrate core business processes. Assign responsibilities and create alignment on accountability, transparency, and how decarbonization-related performance and targets are monitored.

4. Collect data & calculate

You have your ambition clearly defined, the targets are set and the responsibilities are assigned. Now it is important to define the boundaries (e.g., based on GHG protocol) of the activities you take responsibility for within your supply chain (e.g., scope 1,2,3,), and which activities you exclude. Next, the carbon data needs to be collected using existing or new data collection frameworks and carbon calculation tools. With the help of a customized GHG reporting manual with aligned methodologies, your emissions can then be measured.

5. Report & obtain assurance

It is essential to be aware of how the collected data is translated into disclosures addressing the needs of important stakeholders. Create an understanding of the relevant upcoming regulations, ensure audit readiness and make sure that you are able to present a complete and consistent integrated report. Please refer to Globally Consistent ESG Reporting to get an insight into common reporting metrics.

6. Prediction & decarbonization pathways

The data is collected, you are audit ready and ready to report. What's next? With the help of tools, the different decarbonization pathways (avoid, reduce, substitute, or compensate emissions) can be outlined. Part of modeling the decarbonization pathways is a scenario-analysis that provides, based on financial and non-financial data (e.g., future costs of CO2 and kg CO2), insights on the effect of potential future changes and trends on the pathways. Based on this, the most suitable decarbonization pathway can be established for your organization.

7. Create value

Ensure that your organization extracts additional value from the opportunities arising in this decarbonization journey. Will you become the biodiversity-preservation-hero or will you reach the newspapers’ headlines by advancing new decarbonization technologies?

It's human to stick to the familiar. However, in the case of climate change, this familiar situation will change, regardless of your resistance to the change. The greatest risk of all might be the risk of waiting too long to make progress. Do you want to ensure that your organization is future-proof? With our industry-wide decarbonization expertise and client experiences, we can assist you in making a positive impact by navigating your organization with a personalized decarbonization journey.

For thoughts and questions, reach out to one of our professionals.
 

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