More companies are undertaking the transition to a renewable energy strategy that reduces costs and carbon and optimizes energy consumption and utilization. Companies across the globe are making bold commitments to advance decarbonization initiatives. By the end of 2021, net zero commitments covered a full 90% of global gross domestic product (GDP). (1)
Developing your corporate sustainability plan starts with your organization’s unique energy usage data, a review of your utility bills, an analysis of your existing energy contract and a plan to implement renewable energy. Your energy data will help you to benchmark where you are now and inform a strategic plan to achieve your goals.
Reviewing your energy data and contracts can reveal:
- Energy consumption and usage trends
- Opportunities to integrate renewable energy and lower your total energy bill
- Opportunities to reduce carbon emissions
- Opportunities to reduce reliance on the grid
- Improved budgeting and cost efficiencies
The Importance of Measuring Greenhouse Gas (GHG) Emissions
Before you can set a realistic goal and timeline for decarbonization, you must have a clear picture of where your environmental impact stands today. Calculating GHG emissions is good for business. It provides insight into energy usage across the entire organization and helps identify opportunities for energy efficiency, carbon mitigation, cost savings, and reducing your reliance on the grid. ESG Investing, also known as Sustainable Investing, is growing exponentially as more investors and issuers utilize ESG and climate data and tools to support their investment decision making. The Task Force on Climate- Related Financial Disclosures (TCFD) has published recommendations for climate-related reporting and disclosure which includes inventory of an organization’s scope 1, 2, and 3 emissions.
Scope 1, 2 and 3 GHG Emissions
The task of auditing your energy consumption and emissions across your entire organization may seem complicated, and in many ways it is. It requires understanding and calculating Scope 1, 2 and 3 emissions. Greenhouse gas emissions are categorized into three groups or ‘Scopes’ by the most widely used international accounting tool, the Greenhouse Gas (GHG) Protocol. While these Scopes might seem confusing at first, they can help you create a GHG inventory by identifying how much CO2 your organization emits based on everything it takes for your business to operate.
Setting Your Goals
A sustainability plan typically includes the overarching goal to reduce carbon emissions, in addition to addressing environmental, economic, and social equity goals. Sustainability goal-setting can feel overwhelming. It’s important to think big at first but follow with tangible, realistic goals that can be achieved over time. There are multiple frameworks you can look to for guidance, such as:
- Science Based Target Initiative (SBTi) – Helps organizations set emissions reduction targets
- United Nations Sustainable Development Goals (SDGs) – The 17 goals created as part of the 2030 Agenda for Sustainable Development
- UN Global Compact – A corporate sustainability initiative for driving change
With the emergence of carbon mitigation mandates and renewable energy requirements, sustainability tracking and reporting is quickly becoming mandatory for large organizations. Determining which metrics to track and report, and how to communicate them in a reporting format, can be daunting.
Analyzing your energy data, benchmarking your progress, and reporting your GHG emissions are all critical to your success. Tracking and analyzing your energy data will help you optimize, forecast and enhance your sustainability plan. Most organizations do not have the in-house expertise or data analytics capabilities necessary to produce the level of measurement and reporting that is required. Utilizing an end-to-end energy management solution can be a useful tool to help guide your decarbonization journey and ensure corporate performance and regulatory compliance. Depending on your internal capabilities, resources and sustainability goals, you may want to start by simply reporting your GHG emissions and work your way to a more robust published report.
Implementing a sustainability plan requires that you measure, monitor and analyze your energy data across the entire organization.
Communicate Clearly and with Purpose
When talking publicly about your sustainability goals, process, policies and achievements, choosing the right reporting design is critical. Communication should include a clear explanation of your sustainability plan and carbon reduction goals as well as reporting specific GHG emissions metrics. According to an article by Joshua Levin, Forbes Business Council, organizations can boost public appeal by sharing their ESG values and plan in an engaging and comprehensive manner. “The missing link in ESG has been translating ESG data for the layperson… Organizations would be wise to explore how they can tell their ESG story more effectively.” (3)
In 2021, there is no required reporting standards all companies must follow, however there are several well-known reporting frameworks your organization could choose from. If you decided to use standards from a certain entity when you were determining your sustainability goals, you will want your reporting design to accommodate those goal standards. Your final report can be included with your organization’s annual report or as a separate report.
Looking at energy efficiency, procurement, and sustainability as independent silos can create long-lasting, unnecessary, and costly mistakes. If you want to create a measurable, financially rewarding sustainability plan you need to break open historical silos and leverage integrated analysis for a more holistic approach. Conducting a forward-looking analysis that incorporates a variety of energy options allows you to prioritize, plan, and execute an optimized energy sustainability strategy. Once you understand the potential cost savings and sustainability benefits of certain actions, you can then take a deeper dive into your operation, facilities, and energy usage data to develop your sustainability plan.
Today’s commercial and industrial business leaders must transition their traditional energy mix to a more progressive energy strategy that includes renewable energy sources and reduces carbon emissions. Premier Power Solutions is part of the NextEra Energy family of companies, the world’s largest producer of wind and solar energy, and a world leader in battery storage. We are uniquely positioned to analyze, facilitate and execute on innovative renewable energy projects to ensure that each client’s energy strategy meets their unique business goals and sustainability objectives.
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(1) Post-COP26 Snapshot, Net Zero Tracker. Energy and Climate Intelligence Unit, Data-Driven EnviroLab, NewClimate Institute, Oxford Net Zero. November, 2021. (2) Adapted from: Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard (3) Levin, J. (2021, Feb. 9). Three Unexpected Trends Driving 2021 ESG Inflection, Forbes, forbes.com.