Now more than ever, climate action in the corporate world is viewed as a step towards financial security. Investors are looking for companies headed towards a net-zero future. Several companies have outlined strategies to be able to achieve their targets. Although strategies vary across industries, they contain some basic elements that any company can adopt.
We understand, however, that knowing exactly where to start from can be a challenge. To achieve your decarbonization goals, you must employ processes geared towards analyzing your carbon footprint and adopting measures to reduce greenhouse gas emissions.
This article will look at five pillars of an effective climate action strategy, drawing inspiration from research on the decarbonization journey by KPMG.
1. Ensure Decarbonisation with Tactical Insight
You have a lot of demands to meet as a company: You have to maintain your market share, try to grow as a business, and satisfy your customers. On top of this, there are additional goals you might want to focus on, like Corporate Social Responsibility (CSR) and net-zero objectives.
It’s important to focus on decarbonization without losing sight of your primary company goals. Below are three things to consider if you’re serious about reducing emissions:
- Align your business strategy with your decarbonization goals. That will ensure that you have a business strategy that’s tailored to meet market demands.
- Adjust your capital structure to accommodate climate finance.
- Show provable progress through initiatives geared towards emissions reduction.
Aligning your business strategy with decarbonization goals will put you in an excellent position to achieve both.
2. Partner with Like-Minded Organizations
At least 21% of the world’s leading companies have committed to meeting net-zero objectives. Companies such as British Airways, Microsoft, and Shell have goals of gradually eliminating their greenhouse gas emissions.
To successfully meet your net-zero objectives, consider partnering with other companies. Alliances with industry peers, NGOs, and industry groups will go a long way in encouraging innovation and effective dialogue to achieve climate change objectives.
3. Encourage Sustainable Behavior
Reducing your carbon footprint is one part of the overall goal of achieving sustainability for many businesses. To achieve that goal, you need to put initiatives in place to support your targets and make achieving those goals part of your corporate culture.
Encouraging sustainable behavior can have many benefits for a business. It can result in an improved company reputation among stakeholders and consumers. In addition, you can benefit from internal innovations implemented by your employees if you have a corporate culture that is receptive to new ideas.
4. Prove Your Claims and Build Trust
It’s one thing to declare your company as an advocate for net-zero emissions, and it’s another thing to show that you are living up to your claims. Customers, investors, and stakeholders always want data to prove you achieve the goals you set out to complete.
Devising a strategy, providing data, and showing that you are hitting milestones will help develop trust in your business. Developing and maintaining that trust in your business is important, especially when you set out to achieve something difficult.
You can build trust in your corporate climate action strategy efforts by publishing your plan and sharing your data. You can use data gathered by emission monitoring systems to show direct emission levels from your facilities. You can combine this with data gathered from other sources should you want to share direct and indirect emissions figures.
Providing relevant data means your progress will be available to all interested parties to review. In addition, you can identify gaps in your processes and adjust your initiatives to meet your climate goals.
5. Gain Regulatory Agility
In December 2015, over 190 Parties gathered in Paris to adopt a legally binding document known as the Paris Agreement. Among the things agreed was to achieve a balance between emissions and removals in the second half of the century by undertaking rapid reductions where possible.
At the start of the Biden administration, executive orders declared the US will strive for net-zero emissions by 2050. With proper mechanisms to monitor the rate of emissions reduction, your organization can be part of that solution and benefit from loans and other financial benefits as and when such funding becomes available.
Last Words
There is no better time to join other corporate entities to work towards net-zero-carbon than now. If there’s anything the Covid-19 pandemic taught us, it’s that many things are possible when businesses and governments try to achieve a goal.
By following the pillars listed above, you can join a growing number of organizations headed towards reducing GHG. So, be open to partnering with other organizations, especially if they’re ahead of you in honoring their net-zero pledges. Show evidence of your progress by digitizing data and do your part to encourage sustainable behavior.
