If you missed our "On the Race to Net Zero: How Technology Accelerates the Decarbonization Journey" webinar with our partner Bain & Company and client Rodan + Fields, don’t worry; we have you covered with these five key takeaways
1. The need for decarbonization is growing.
There is increasing pressure on companies to take responsibility for their contributions to climate change. External forces from proposed and adopted regulatory measures, changing market expectations, and competitive pressure as companies try to show their investors and other stakeholders they are addressing their impacts are all driving decarbonization plans. There is also a business case for decarbonization, as a good decarbonization plan translates into organizational benefits, such as:
- Resilience and risk mitigation - Future-proof your company's resilience and mitigate physical and transitional climate risks.
- Innovation and competitive edge - Increased investments in research and development for decarbonization can lead to product differentiation, and efforts to reduce impacts typically result in cost savings.
- Credibility and reputation - Many investors and customers now demand information about decarbonization plans. Setting and making progress toward decarbonization goals signals commitment and trust.
- Policy influence - Being a leader in decarbonization strategy allows you to help shape future climate policy and reduce compliance burdens.
2. Take these three steps to ensure a successful decarbonization plan.
- Data-driven - The first step to any decarbonization journey is measuring your carbon footprint so that you can understand your impact and share that with stakeholders. Accurate data means you can understand your impacts, communicate them, prioritize decarbonization efforts, and set and track progress toward climate goals. Data-driven means taking activity data, such as 10 gallons of gasoline used, and converting that with an emissions factor to get the carbon dioxide equivalent. Emission sources have multiple calculation methods, with spend-based being the easiest, yet least accurate and actionable; hence, an iterative approach is recommended.
- Iterative - Climate change is a constantly evolving issue. Having a flexible and adaptable plan that prioritizes improvements, complies with the most current science and frameworks, and aligns with a changing business structure will enable successful decarbonization.
- Stakeholder informed- Engaging with both internal and external stakeholders at an early stage will make for a more robust strategy, help build relationships to support efforts, and drive engagement and support; this ultimately increases the likelihood of success. Cross-functional engagement driven by ESG and sustainability teams will be essential for collecting the correct data, ensuring that climate risks are assessed, and securing buy-in on the company’s decarbonization strategy.
Using carbon accounting platforms like Persefoni simplifies each of these steps. It allows companies to get a data-driven carbon footprint with our extensive emissions factors library, iteratively improve their processes, and maximize cross-functional engagement.
3. An aligned decarbonization plan requires a balance of strategic, operational, and financial considerations.
Stakeholders within a company will have different priorities when making a decarbonization plan. Therefore, a fully optimized plan, with alignment across the business, requires balancing three considerations:
- Strategic - What should decarbonization targets be, given the level of stakeholder pressure and value creation opportunities? How quickly should progress toward the target be shown? What are the consequences of not meeting targets? What is the risk mitigation worth to the company?
- Operational - What impacts will decarbonization have on operations and supply chains? What systems, processes, and capabilities are required to meet decarbonization goals?
- Financial - How much will it cost to reach the target? What will be the level of capital investment? What could be the benefit to the bottom line?
A decarbonization plan will be sub-optimal if it prioritizes any of the considerations above the others. For instance, a company may prioritize decarbonization levers, which have the lowest cost, but these decarbonization levers may be found to expose it to supply chain risks and have poor carbon reduction outcomes, leading the company to fall behind its competitors and miss its targets. Sustainability teams need help balancing these considerations. Cross-functional engagement is key to ensuring an optimal plan is created.
4. Decarbonization plans are improved by cross-functional engagement.
Cross-functional engagement led by sustainability and ESG teams across the company is key to ensuring an effective decarbonization plan. Collecting and analyzing carbon data is difficult, but Bain & Company has found through working with their clients that finding alignment in creating decarbonization plans can be even more challenging; cross-functional engagement is critical to rising to this challenge. Sustainability teams will have to seek funding from finance, confirm with a legal team that risk is appropriately mitigated, and ensure executives consider climate in their broader business strategy. That strategy should require product teams to innovate new methods of reducing the embodied carbon of products, and the supply chain to change procurement policies. Balancing these complex requirements demands constant engagement and sharing of information that is suited to each team’s level of knowledge. To simplify the process of cross-functional engagement for sustainability teams and to create a fully optimized decarbonization plan, Persefoni and Bain & Co. have created the Decarbonization Manager Module.
5. Persefoni and Bain & Co. have leveraged our experience and capabilities to cut through the complexity of creating a decarbonization plan.
This new Decarbonization Manager Module enables companies to make carbon reduction decisions based on industry-specific decarbonization levers. These levers are important for planning and tracking decarbonization, and are powered by Bain & Co.’s industry-leading recommendations, which have been organized into a library of levers. The module has three primary capabilities:
- Scenario Development - Companies will be able to build their own decarbonization scenarios, which include establishing a baseline carbon footprint, setting targets, and evaluating ROI.
- Actionable Insights - Users will gain full access to Bain & Co.’s decarbonization library to understand which levers are best suited to meet their organization's goals and targets.
- Build and Track Deployment Plan - Select a bespoke decarbonization scenario that best suits your business needs, then make empowered decisions by prioritizing and implementing key initiatives that align with your decarbonization and financial goals.
This module uses the best of both Persefoni and Bain & Co.’s experience to enable companies to make actionable and effective decarbonization plans.
To get a more in-depth understanding of these five takeaways, learn how Rodan + Fields creates their decarbonization plan and see a demo of the Decarbonization Manager Module; you can watch the entire webinar here. Or you can request a demo here.