Over the last few decades, climate change has catapulted from a merely debatable topic to the modern crisis being faced by our planet. With each passing day and every new research, we learn more about the negative impact of human activities, industrial operations and others on our climate.
With the rising industrial emissions impacting the environment severely, it has become important for businesses to participate actively and play a significant role in combating climate change. In addition to the global goals set by Paris Agreement and other initiatives for mitigating climate change, it has become imperative for businesses to have corporate climate change action in place.
However, what is corporate climate action exactly?
In simple words, a corporate climate action plan is a comprehensive plan to reduce emissions from fleets and municipal operations. It includes the efforts and strategies for reducing indirect and direct greenhouse gas emissions that are being produced by a city as a result of the businesses’ operations.
Moreover, to fuel businesses’ climate change action, global climate commitments catalyze different business leaders to drive the policy change for accelerating the transition towards a low-carbon economy. While being involved in mitigating climate change, businesses have realized that corporate climate action is not just beneficial for the environment and people; instead, it is beneficial for their business as well as it would help them lower carbon footprints, reduce energy usage, improve brand usage, and decrease cost.
However, to devise effective and practical climate change mitigation strategies, businesses need a head-start, direction and assistance in terms of technology and innovative techniques. This would help them introduce innovation in their industrial operations, mitigate climate change and fulfil their corporate social responsibility at the same time.
What Can Companies Do To Reduce Climate Change?
1. Corporate Climate Action Plans
The initial step of the businesses should be to develop a comprehensive corporate climate action plan across the company. The components of a corporate climate action plan majorly depends on the company type and the goals it wants to achieve. Still, every company might face a few general decisions, such as types of targets to achieve, means and ways to drive innovation, to what extent the corporate climate action plan features the market mechanisms such as external carbon offsets or internal carbon pricing and others.
Once such targets are set, they can solve the dual purpose of driving innovation across the company and minimizing carbon emissions, spurring internal products and programs which can help the company meet its goals. Sometimes, just the existence of energy use or emissions data can generate ideas and interest for climate change mitigation, which can prove to be profitable on their own. This data can be made available by adopting digitization and advanced technologies such as the Internet of Things (IoT).
2. Internal Carbon Pricing
Internal carbon pricing is one business strategy which has gained traction amongst leading businesses. It assigns a specific price to carbon emissions that are attributable to businesses. More than 1200 companies across the world are either preparing or pursuing internal carbon pricing in the coming years.
The companies which establish a corporate carbon price assign a specific monetary value to carbon emissions associated with particular business activity. Thereafter, the price signal is factored into different investment decisions, thus, providing an incentive for the business to move from emissions-intensive products and programs to low-carbon and climate-resilient alternatives.
3. Energy Efficiency
Improving energy efficiency has emerged as an important component of corporate climate action plans and corporate social responsibility. Moreover, the companies participating in the EP100 initiative, which is a global initiative to improve energy productivity and lower emissions, pledge to double their energy productivity, which will help the world save $2 trillion by 2030.
The leading firms that are giving greater attention to energy efficiency can achieve significant monetary savings and reduced levels of greenhouse gas emissions. Such efficiency strategies can encompass supply chains, products and services, internal operations and cross-cutting issues.
However, energy efficiency strategies in a corporate climate action plan are most effective when:
- Energy efficiency is an integral and important part of corporate climate action plan and risk assessment.
- The company has SMART energy efficiency goals (specific, measurable, accountable, realistic, and time-bound).
- The corporate climate action strategy and plan relies on a robust and resilient tracking and measurement system;
- The energy efficiency strategy shows results; and
- The company communicates efficiency results externally and internally.
4. Decarbonizing Supply Chain
For a company, supply chain emissions are the emissions that take place outside the company’s walls, which may be a part of downstream activities or upstream activities, like, from suppliers. Normally, the supply chain presents a significant share of the company’s carbon footprint. And, if enterprises include reducing supply chain emissions in their corporate climate change action plan and work actively to bring down the emissions, this can be a great example of collaborative and coordinated efforts, thus significantly reducing supply chain emissions.
Corporate Climate Change Action: Sustainability Imperative
The companies taking carbon reduction and foot printing strategies see their energy usage in a whole new light. Moreover, when companies analyze and calculate their carbon footprint with advanced technologies and techniques, they find detailed data related to their energy consumption, making it easier for them to lower their emissions in a more structured way. Moreover, while viewing from this perspective, achieving energy efficiency and lowering greenhouse gas emissions through a well-sought corporate climate change action plan becomes sustainability imperative for businesses.