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Step-by-step: How to create a decarbonisation plan

The why: Reasons for a comprehensive decarbonisation plan

It’s global consensus that the world must make deep cuts in carbon emissions this decade to limit global warming to 1.5 C° and reach Net Zero in time. This huge reduction means that corporates, public bodies and institutions must act now, by developing and implementing comprehensive strategies to decarbonise. But the unfortunate reality is that whilst many organisations are committed to sustainability, they lack the well-thought-out roadmap to get them there.

Simply put, a decarbonisation plan is a blueprint that companies create, composed of two main elements:

  1. Aim: Setting long-term carbon reduction targets, broken down into short-term manageable goals

  2. Act: Developing and implementing initiatives to achieve those goals

The risks for not having a well-developed decarbonisation plan can be high. Possible risks include reputational damage, mis-investment in the wrong solutions, customer loss, disengaged stakeholders and loss of competitive advantage.

Alongside the environmental benefits, a comprehensive decarbonisation plan can deliver positive impacts across multiple areas of a business:

  • Cost savings: Decarbonisation often involves optimising processes and improving resource management. These changes can enhance overall operational efficiency, leading to increased productivity and cost-effectiveness.

  • Compliance and regulation: As carbon reporting regulations become stricter worldwide, a comprehensive decarbonisation plan helps organisations stay in compliance with disclosure requirements. This mitigates the risks associated with non-compliance and potential penalties.

  • Risk mitigation: As climate change poses increasing risks to businesses, including supply chain disruptions and extreme weather events, a well-prepared decarbonisation plan can help mitigate these risks. A better understanding of your supply chain and insightful data through carbon accounting means you have more information to better predict or anticipate these risks.

  • Brand reputation: Consumers and stakeholders now expect businesses to take accountability for reducing emissions. Companies that actively work on reducing their carbon footprint often enjoy an increase to their reputation and consumer trust levels, boosting market competitiveness. On the flip side, failure to address emissions can harm brand and reputation.

  • Future-proofing: Decarbonisation presents a significant opportunity for business transformation and growth. A well-structured plan encourages innovation and agility within the organisation. In addition, increasingly organisations are seeking partners and suppliers that are actively working to reduce their emissions. Having a well-developed decarbonisation plan can enhance the ability to secure partnerships, investments and support.

How to create a decarbonisation plan

Assess your current carbon footprint

It’s the classic story: to know what to change you need to know where the problems lie.

So, before you can effectively reduce your carbon emissions, you need to understand your current impact. This is where carbon accounting comes in – the standardised approach to measuring the carbon footprint of an “entity”, be it an organisation, product or event. Measuring your carbon footprint allows you to identify the size of your outputs and pinpoint where they occur. To get an accurate measurement, it may be useful to invest in tools and technologies to help with the task and streamline the process.

Identifying which areas of your operations create emissions and which activities are most carbon intensive will inform your carbon reduction targets.

Aim: Set clear carbon goals and targets

By setting carbon reduction targets, organisations commit to taking concrete actions to minimise their contribution to global warming and align with broader climate goals. It’s important to consider what level of emissions reduction you want to achieve and set specific, measurable, and time-bound targets. Typically, businesses have one main, overarching target, broken down into more manageable, nearer-term goals.

There are different types of carbon reduction targets, each with a slightly different meaning. Net zero is probably the most popular example and is defined as “achieving a balance between the amount of anthropogenic greenhouse gas emissions to the atmosphere and anthropogenic removals of emissions over a specific time period”. Essentially, this means taking as much greenhouse gas out of the atmosphere as you put in.

If you plan to set a science-based target, you need to follow guidelines from the Science Based Targets initiative.

More guidance can be found in our article: What is the SBTi?

Act: Develop an action plan

After you’ve chosen your targets, it will be easier for you to identify the appropriate actions to support them.

Creating a detailed roadmap – one that’s transparent and credible - outlining specific actions and initiatives to reduce emissions will help to build up a picture of how to reach your goals in the most effective way. These actions might include transitioning to renewable energy sources, improving energy efficiency, adopting sustainable transportation solutions, or implementing waste reduction strategies.

To choose which actions to include, you need to prioritise. It may be tempting to include every single initiative you can think of that would cut emissions, but this could get overwhelming, and in the end, probably bear poor results. When prioritising, consider these two factors:

  • Ease of implementation: Identify low-hanging fruit and immediate actions that can lower your carbon footprint. Look for easy-to-decarbonise areas of your operations where you can make a difference right away.

  • Carbon impact: Assess where the high-carbon impact areas are within your organisation’s footprint and use this insight to choose areas to tackle that will have significant results.

Make sure to include a timeline for each action and assign responsibilities. Ensuring a person or team is accountable for the delivery and success of an initiative means it's more likely to be completed in the right way, on time.

Check that the plan is strategic

It’s important to be forward-thinking when developing a decarbonisation plan, taking into account any possible hurdles that could crop up in the future. Something to consider is regulations that may impact your organisation. For example, there is a growing acceptance that there will be a cost associated with emissions in the future, likely tied to carbon taxes or trading schemes. A strategic decarbonisation roadmap will need to be aware of this when setting out the pace and potential budget needed to achieving targets.

Most companies will not be able to reach Net Zero without having some emissions left over, so another thing to consider is the price of offsetting. Carbon offsetting generally involves organisations paying other entities to reduce the emissions that they cannot reduce themselves. The company may then count the emissions reductions they have paid for towards their own climate targets. But carbon offset prices are set to increase dramatically by 2050, therefore it’s vital to consider these potential financial impacts, or make a faster-moving plan that avoids the need to offset.

Build adaptability into the plan

When creating a blueprint that spans across decades, there is always the likelihood that you’ll have to pivot along the way. Especially as the field of decarbonisation is continually evolving.

Stay informed about new technologies, regulations and best practices. Accept that there may be changes and be prepared to adapt your plan to incorporate emerging opportunities or address new challenges. It may be beneficial to have pre-set checkpoints where you will consider your progress and reflect on developments that will influence the roadmap’s evolution.

Embrace digitisation – emerging technologies on the market allow for better asset monitoring, data measurement and can vastly improve performance. Investing in the digital infrastructure saves time and resources when it comes to gaining critical insight about your footprint, meaning you can put more effort into implementing your decarbonisation actions and making sure they’re a success.

Monitor and report progress

Finally, regularly track and measure your progress towards emissions reduction, using key performance indicators (KPIs) to assess the effectiveness of your decarbonisation initiatives.

When it comes to reporting progress, transparency is crucial. Be honest about challenges faced as well as achievements, and always go for a data-driven approach to back up what. you're saying. Consider publishing annual sustainability reports to keep stakeholders informed.

Engage with stakeholders, employees and the wider community about your goals. Collaboration fosters support for decarbonisation efforts. Educate your workforce and stakeholders about the importance of your plan and the role they play in its success.

The takeaway: Every business needs a decarbonisation plan

For most businesses, the problem with decarbonisation is that it sounds too big to conquer. But like most things, it’s all a matter of perspective. Seeing decarbonisation for what it is – a business opportunity with the power to transform and future proof your company – will alter the way you approach it. Just like any other part of your business, your decarbonisation strategy should be a work in progress, a journey that begins with small steps and a commitment to change.

Naturally there are some sectors with higher emissions than others, including manufacturing, agriculture and transport. At first glance you might think that decarbonisation and Net Zero targets only apply to these industries and large businesses. But when you consider that 99.9% of the UK’s business population is made up of SMEs, this cannot be the case.

In short, it’s just as important for SMEs to decarbonise as large corporations. However, only 50% of SMEs calculate their emissions, with top reasons being a lack of skills and knowledge (63%), funding (48%) and time (40%). Investing in carbon accounting software is a simple solution to streamline the process, and in turn, save time and resources.

Our plans have been built with SMEs in mind - to start your decarbonisation journey, get in touch with our expert team!

To conclude, creating a decarbonisation plan is a crucial step in addressing climate change. By assessing your current emissions, setting ambitious targets and taking action to reduce your carbon footprint, you contribute to a more sustainable future for both the planet and your business.


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