For companies that are not on track to meeting their near-term publicly stated sustainability targets means that the clock is ticking louder with each passing day. 2030 goals may still sound far away, but companies that have made ambitious goals by this year have less than eight years to deliver.
If your company is in this position, you're in good company; estimates state that more than four-fifths of the world’s largest companies are not on track to meet targets set out by the Paris Climate Agreement by 2050. To mitigate this, some have pushed out and amplified their goals to achieve higher levels of reductions between 2030 and 2050. With new companies committing to sustainability and emission reduction goals each day, it's important to examine why there has not been more success in achieving these goals to date.
A big reason for companies falling short of their ambition is because there has been little accountability from regulatory agencies and historically low levels of executive buy-in to invest in energy and sustainability programs. If organizations continue to struggle in addressing and achieving publicly stated commitments, the world will continue to face a variety of environmental challenges.
When addressing carbon reduction and sustainability goals, there are numerous challenges that organizations face, such as:
- Understanding where to start and how to measure progress;
- Incorporating the appropriate efficiency measures within facilities to drive performance; and,
- Knowing what to report to investors and other key stakeholders.
Not only is reaching emissions and sustainability goals important from an environmental perspective, but it is also a strategic play, with increasing interest around sustainable investing and investor action on climate change. Companies that achieve and report sustainability successes consistently outperform their peers in part because investors are more secure with the transparency and long-term stability of the organization. Even more impressive - during the COVID-19 crisis, more than 90% of sustainable indices outperformed their parent benchmarks.
Although regulatory bodies do not consistently hold companies accountable for reaching their sustainability commitments, organizations that follow through reap the rewards for their actions. In addition to investment opportunities, discussions around the implementation or expansion of carbon taxes from a global, national, and state perspective could be economically and operationally challenging for corporations that are not prepared for these changes.
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In order to improve success ratios of organizations meeting goals, there are multiple tools available to companies who are in various stages of the emissions reductions and sustainability goals process. The following steps are just a few ways organizations can get back on track to achieve sustainability goals:
- Sustainability reporting, measuring, and tracking: The first step in setting and ultimately reaching emission reductions and sustainability goals is to understand your organization’s baseline and identify steps that can be taken for improvement. By establishing baseline metrics, organizations identify where the areas of greatest opportunity are and can create a strategy that prioritizes activities with the greatest impact that will help meet sustainability deadlines on time. Additionally, by leveraging resource management tools like EcoStruxure™ Resource Advisor, organizations can track ongoing progress toward goals. This is important for knowing if you are on track to meet deadlines, and if not, when to pivot the strategy. Centralized resource management tools also ensure that you are working with clean, comprehensive, and reliable data. This will make reporting to disclosures, such as CDP, GRI, or GRESB, more streamlined and provides a central platform on which to share stories of success and achievements across the organization.
- Energy Efficiency: Once improvement measures are identified, companies can monitor or manage energy technologies to determine a facility’s key needs. Focus efforts on making the facility as efficient as possible first, which further reduces emissions and creates opportunities for innovation in the workplace. According to recent research, companies that set public sustainability targets see value even beyond efficiency and cost reduction and are more likely to secure funds for improvements, build successful business cases for projects, and adopt emerging technologies—all of which go a long way toward getting on track to reach goals. Companies should also remember to utilize rebates and incentives to determine where opportunities are for efficiency improvements and capitalize on low-hanging fruit.
- Renewable Technology: One of the most common strategies for reaching emissions and sustainability goals is through the use of renewable technologies, and it’s easy to see why. The global market for renewables has become more affordable, making technologies such as solar or wind more competitive than fossil fuel in many global markets. Companies can procure renewable energy in a scalable way to meet goals of any size. For example, companies with goals to use substantial amounts of renewable energy often use power purchase agreements (PPAs) to make a big dent against the goal, while companies that are close to meeting their goals often use energy attribute certificates (EACs) and/or carbon offsets as a way to close the gap to achieve sustainability milestones.
“By setting renewable energy targets, and joining the RE100, we’ve been able to make decisions more quickly, take bigger steps forward and advance our goals much faster than we could have otherwise.” – Financial Services Company
Companies that achieve their goals in the stated time frame are successfully implementing the right mix of the above opportunities. For instance, the 221 companies that have joined the RE100 have committed to, or are already powered by, 100% renewable energy, are saving money through the falling prices of wind and solar and identifying efficiency opportunities, are increasing in attractiveness to investors and consumers, and are showing their commitment to reduce carbon emissions.
To learn more about how Schneider Electric can help you map a successful path and achieve your goals, contact us today.