The 5 Key Steps To Create The Baseline For Your Climate Strategy
Nexio Projects is happy to welcome this guest blog post by our partner Ecochain, a pioneering cloud-based software that streamlines and simplifies Life Cycle Assessments across entire product portfolios solution for life cycle assessments.
You want to create a climate strategy, tackle your sustainability targets and create a future-proof company. But- where do you start? In this article we will take you through the 5 key steps that will create the baseline for your climate strategy. Let’s go!
Setting environmental reduction targets is hard if you don’t know where you’re standing. The key to creating every successful climate strategy? It’s measuring.
You can’t manage what you can’t measure. If you want to reduce your carbon footprint- you need to know what it is first. How? By performing a Life Cycle Assessment (LCA)– which is the industry standard for measuring environmental performance.
An LCA will allow you to understand what your impact hotspots are. This will provide you with the most useful information on how to reduce your footprint the fastest.
So, let’s dive into the 5 baseline steps that will lead you to climate neutrality.
Step 1: Establish your baseline measurement of Scope 1, 2 and 3 emissions.
Your direct, indirect and supply chain greenhouse gas (GHG) emissions are the key metrics for your climate strategy. To start off, you first need to understand where your GHG emissions come from.
So, what do scope 1, 2, and 3 emissions mean?
Scope 1: Emissions from scope 1 are direct emissions. This means that they directly come from your company’s owned- or controlled source, such as company vehicle emissions.
Scope 2: Emissions in scope 2 cover the indirect emissions from purchased sources, such as your company’s consumed electricity or cooling. For example; this would entail the emissions from the burning of fossil fuels at a power station that generates your electricity.
Scope 3: Emissions from scope 3 include all the other indirect emissions within your value chain. This includes the upstream supply chain (suppliers), as well as downstream GHG emissions e.g. occurring with customers. Think of emissions from your business travels, waste disposal transportation, or investments. For many organizations, the scope 3 emissions provide a dominant impact category.
Measuring and reporting your scope 1, 2, and 3 GHG emissions is done according to the GHG Protocol. The GHG Protocol is very useful and supported by most LCA tools. It provides standards that create a common ground for many sustainability certifications and reporting systems.
Step 2. Analyse your impact hotspots and identify the highest potential points for reducing your emissions.
Once you’ve measured your scope 1, 2, and 3 emissions, it’s time to analyze them. An LCA measures the environmental impact associated with every step in your product’s lifecycle (from production to waste). Meaning; you now have crucial intel on the GHG emissions that are emitted during every step within your supply chain. At what step(s) does the biggest impact take place? Is it the growing of your resources? The production of your products? The packaging?
Instead of trying to do everything at the same time, your impact hotspots tell you exactly what you should focus your efforts on. This is crucial to the effectiveness of your climate strategy.
Once you have analyzed your biggest impact hotspots, you can use this information to identify and create the most effective reduction measures. Create what-if scenarios and compare them. What would happen if I changed a specific business process(es) and replaced it with a more circular process (e.g energy efficiency, alternative materials, recycling)? Would other suppliers for my production process perhaps be able to help me reduce my overall footprint?
Step 3. Set KPI’s & (Science-based) targets
Once you’ve decided on your reduction measures, it’s time to make sure you can measure these as well. When it comes to the GHG Protocol, organizations often set science based targets and KPI’s. This helps them to make the claim that they operate ‘within the boundaries of the planet’. They link their targets to the Paris Agreement- whether they are ‘within the boundaries of 1.5. or 2 degrees scenario’.
These science based targets are based on the Science Based Targets Initiative (SBTi). With help of the SBTi you can define feasible reduction targets and an implementation strategy that is backed by reality.
Companies can formally submit their targets to SBTi. This verifies that their targets have been set in line with the SBTi methodology.
Step 4. Execute & monitor your carbon reduction plan
Now it’s time to put all your plans into action. Execute your reduction plan and start monitoring your science based targets. By constantly keeping track of your carbon reduction portfolio you will be able to track your improvements and/or where more efforts are still needed.
Step 5. Analyze & offset your carbon emissions to become carbon neutral
Never completely rely on carbon offsetting in your climate strategy. Carbon offsetting only works if the company financing it also changes its own operations to become more sustainable. Make sure you first measure and reduce your carbon footprint as much as possible and offset your remaining, most unavoidable emissions.
Once you’ve done so, you can assess the costs and benefits for offsetting your carbon emissions. Compare different offsetting methodologies (VER, gold standard, TreesForAll and others) and measure your progress accordingly. Read more about the do’s and don’ts to ensure your carbon offset is credible-right here.