At the turn of the decade, an unparalleled number of organizations were making major strides towards their milestone climate mitigation goals. Now, recalibrating after the shock of a global pandemic, an inspiring wave of global corporations and governments are not only holding their ground on climate-related initiatives, but also imagining innovative ways to #BuildBackBetter.
This momentum can be seen in the fourteen states, as well as Washington, D.C., that have announced ambitious clean energy goals as part of the 100% Clean Energy Collaborative, organized via the U.S. Clean Energy States Alliance. Or in Paris and Berlin—each now on a growing list of European cities urging the European Green Deal to become a core focus of the E.U.’s green recovery plan. Or in the recent commitment from 155 signatories to the Science-Based Targets Initiative (including Schneider Electric) to link recovery with climate action.
This resilient recovery depends on organizations taking preventive action and accelerating decarbonization, potentially beyond previous goals set, or at an even faster pace.
What is your organization’s recovery strategy? Does it include proactive, robust decarbonization practices—or will it be forced, yet again, to react when it may be too late?
The choices made now will define the decades to come and will depend on surgical focus, combined with practical actions, to profitably fast-track climate mitigation efforts towards a low-carbon economy.
Here are 3 things your organization can do—immediately—to recalibrate and progress towards a deeply decarbonized future.
Save money and strategically reinvest in your business
Organizations everywhere are being called to cut costs and find savings—a potential challenge for energy and sustainability professionals, who may feel compelled to slow their own progress in a resource-constrained environment.
But now is an ideal time to use sustainable practices to financially enable your company. Consider:
- Resource savings that can be identified through efficiency practices, digitization, and machine learning, and which may be easier to implement during a period of slowdown or shutdown
- Innovative funding methods like Energy-as-a-Service, which shift cost burdens off your balance sheet
- Distributed energy resources like renewable energy and electric vehicles, which can help stabilize energy budgets while slashing carbon emissions and air pollution
Indeed, strategic reinvestment in line with your company’s mission, resiliency targets, and climate goals has never been in closer reach. Over the past decade, onshore wind and solar PV energy prices decreased 70% and 89% respectively. A recent study from Oxford University further found that investing in green policies and infrastructure would lead to a robust economic recovery, as well as long-term positive outcomes for society.
At the start of the year, Larry Fink, the Chairman and Chief Executive Officer at Blackrock, signaled that the world is “on the edge of a fundamental reshaping of finance” and strongly urged companies to embrace purpose and not remain (or become) complacent on sustainability matters.When considering how to strategically reinvest in your business, note that more than 90% of sustainable indices outperformed their parent benchmarks during the recent economic disruption—demonstrating how ESG and low-carbon priorities can fundamentally build resilience into your company’s bottom-line.
Need some inspiration? Listen to our recent podcast on how to unleash mission-driven opportunities in your organization.
Accelerate climate change initiatives using a portfolio-based approach
It can feel overwhelming to tackle an organization’s resource footprint, especially in a financially constrained environment. We advocate a portfolio-based approach comprised of the following steps:
First, set an ambitious—even audacious—goal.
We’ve found that organizations have more success on energy and sustainability initiatives when they set and announce their goals publicly. Our recent research shows that companies are more confident they will meet sustainability targets when their goals are ambitious. Those that are more confident are also more likely to use innovative funding mechanisms, such as Energy-as-a-Service.
There are a variety of global, third-party benchmarking standards that can guide the goal-setting process and help your organization accelerate progress.
Science-Based Targets (SBTs), in particular, challenge companies to go beyond expected legislative requirements and engage the entire supply chain on the path to deep decarbonization. SBTs are highly credible because they align with the latest climate science, aims of the Paris Agreement, and guidance from the Intergovernmental Panel on Climate Change (IPCC). As your organization seeks to deeply transition towards a low-carbon model, setting SBTs may serve as a transformative lever to spur innovation throughout your value chain.
Second, consider investing in an enterprise data management system.
While there is a cost associated with a data management platform, the investment in a market-leading solution like EcoStruxureTM Resource Advisor can pay returns in time and human resources, especially during periods of disruption when accurate, timely data is essential. In fact, the need for transparency with stakeholders tops the list of reasons energy and sustainability professionals invest in a data management program.
A data management platform can also help professionals make informed, and potentially cost-saving decisions. Timing and price volatility, and access to timely information, are two of the top challenges facing energy and sustainability professionals today. Particularly in a highly volatile energy environment like we’ve recently experienced, the difference between a good and bad decision can translate to significant cost savings.
Third, make maximizing efficiency a core priority.
Energy efficiency will continue to have an immense impact on future emissions levels; as is commonly said in our industry, 'the best watt is a negawatt' (representing a watt of energy that you have not used). Align your efficiency efforts with financial priorities and continuously analyze savings to realize further efficiencies.
Fourth, complement efficiency gains with renewable electricity.
Despite recent market volatility, the corporate renewables agenda is thriving—72% of participants surveyed during our recent webinar are either moving forward with or accelerating renewable energy goals. A balanced cleantech portfolio may include a variety of technologies including global energy attribute certificates (EACs), offsite power purchase agreements (PPAs), and distributed onsite generation. NEO NetworkTM is a free resource and community of nearly 300 global corporations where you can access renewables education, connect with peers, and explore cost-effective cleantech solutions worldwide.
Finally, to progress towards deep decarbonization, begin thinking beyond your own operations.
Addressing Scope 3 emissions in the supply chain is the ultimate frontier—and typically where most emissions exist. Explore key strategic suppliers first and encourage them to set meaningful targets that align with shared values.
Act to future-proof your business to potential disruption
Scenario planning can effectively test your business strategy against a variety of potential climate change or economic outcomes. The practice of modelling multiple scenarios can increase your company’s agility and help it to pivot quickly in the face of complex disruption.
The current crisis has also further illuminated the ever-growing responsibility of corporate energy managers to examine energy portfolio diversification. We have seen corporate renewables purchasing hit record numbers in recent years, and distributed energy resources (DERs) are equally on the rise. Between 2018 and 2019, the energy storage market in the U.S. increased by a staggering 232%. Global growth in microgrids is expected to reach nearly 10% in the next five years, and electric vehicles could surpass 30% market share within the next decade.
Now is the time to explore, adjust, and build resilience while reinforcing your current climate action commitments. These changes will have a genuine impact on your business’s continuity and budget.
Although we may be in a period of uncertainty, the directive forward is clear: take preventive, proactive measures to decarbonize now—or be forced to react when the consequences are costly.
Know that there are solutions available and trusted advisors, such as Schneider Electric, can help.
With collective—and elevated—commitments, organizations worldwide can rethink the path forward and enable a deeply decarbonized and prosperous economy.