A robust framework to lead the low carbon transition

I - The five steps framework

Heads of state and government have delivered a strong message at the COP21. The transition to low carbon societies is key to tackle climate change.
This article describes (I) the five steps used by companies leading the transition and illustrates (II) why and how Climact is supporting them.

1) Be environmentally aware

The first step is to make the company and its stakeholders aware of the stakes and their current impact on/contributions to them.

The stakes

As the current national governments pledges are not sufficient to reach the COP 21 goals, companies need to make and implement their pledges to contribute to their fair share of the required effort.

Measure

The first step is to measure the environmental impact of the organisation. The GRI materiality matrix is recommended at this stage. On GHG emissions, several standards such as the GHG protocol [1] provide guidance.

 

2) Define a vision

Leaders take the low carbon transition as an opportunity. They identify new business developments and pockets of added value. They link the evolution of their sector to the strategy of their organisation.

The sectors evolution

Leading companies should have a clear vision of how the energy transition is happening and at which pace. This also implies how the market evolves and how customers and competitors are addressing these changes.

The organisation strategy

The strategy determines the key choices and leverages the company’s future market and competitive position.

 

3) Set clear objectives

Organisations should set objectives, ranging from the minimum fair share to leading ambitions.

The science based target

Companies should define an emission reduction target in line with the climate science:  if all organisations apply the required level of effort, temperature rise will be limited to 1.5°-2°C. This should be considered as the minimum target.

The Carbon neutrality target

Companies leading the transition go further than just their fair share. They aim at reaching carbon neutrality or even negative emissions This is achieved by balancing emissions released with emissions captured or offset.

 

4) Implement your action plan

A wide array of actions to abate GHG emissions is possible. The action plan describes what actions must be deployed, their ROI and how to reach the objectives. Some actions enable cost savings, while other require investments. It can range from setting an internal carbon pricing and apply ‘laissez faire’, or have an ambitious action plan. The degree of involvement of the teams also greatly varies between companies.

Internal carbon pricing

Setting a price on GHG emissions enables to internalize the cost of GHG emissions and to take it into account in financial decisions.

Carbon offsets

Carbon Neutrality can in theory be achieved by implementing all the actions of the action plan. In practice the last actions tend to be expensive.

Offsets cannot be used to reach the Science Based Target, they only come into play between the Science based and the neutrality target.

A variant of offsets is the purchase of green electricity. This can be used to reduce the electricity related emissions.

 

5) Communicate

Stakeholder involvement along the low carbon transition should be continuous and start from the beginning of the journey.

The stakeholders should be involved in the definition of the materiality matrix [2] and provide feedback on how to improve the business model.

The employees should be inspired to lead the low carbon transition (e.g. through awareness raising sessions).

Employees and stakeholders can be involved in the vision definition of the company.

The objectives can result from a bottom-up process. If the objective is top-down, it should be aligned with a bottom-up approach to ensure organisational buy-in.

Ongoing monitoring of the action plan implementation should be performed. Feedbacks will enable to refine and improve the implementation plans.

External reporting should be compliant with reporting standards (e.g. GRI).

 


II – Why and how Climact is supporting

Climact’s vision is to support organisations to engage in the low carbon transition. Our objective is to provide a unique blend of expertise through each step of the low carbon journey. We support many organisations in Belgium and abroad.

Be aware

Climact provides inspiring awareness sessions. Through its low carbon roadmaps, Climact has a unique insight on the stakes and opportunities of most sectors. Climact also measures the environmental impact of organisations.

Define a Vision

Climact has a clear view of the evolution of the various sectors up to 2050. Its corporate DNA is an asset to improve company strategies with regards to the low carbon transition.

Set clear objectives

Its position as technical advisor to the Science Based Target initiative [3] provides Climact with a good understanding of the values and principles driving the SBT to validate proposed targets. Climact is also involved in the elaboration of Carbon Neutrality standards.

Implement your action plan

Climact experts are involved in cost abatement curves as they participated to the McKinsey & Co initiative already in 2006 (Vattenfall).

Together with the Science based target Advisory Group, Climact experts are leading the convergence of the Carbon pricing and the Science Based Target methodologies.

Communicate

Climact has assisted several large organisations with the CSR reporting.

We invite you to start the discussion with us. Contact us on: info@climact.com

 

 


[1] The Greenhouse Gas (GHG) Protocol, developed by the World Resources Institute (WRI) and the World Business Council on Sustainable Development (WBCSD), sets the global standard for how to measure, manage, and report greenhouse gas emissions.

[2] Matrix positioning stakes along the importance for the stakeholders and for the company.

[3] The Technical Advisory Group is formed by 26 corporate sustainability experts, particularly dealing with science-based target setting methods. They provide feedback and input to the development of the methodology.