How can businesses define and create an effective and relevant climate strategy? Here are 5 practical tips to follow and integrate into your CSR strategy.
Over the last years, the climate has become a priority for many citizens with the term climate emergency growing in popularity. As a result, more and more companies are trying to take action and implement business strategies to reduce their environmental impact and help fight climate change.
The problem is that it ain’t always easy to know where to start, how to act or what tools should be used. So instead of going for a random start which is riskier in terms of time spent we invite you to follow our 5 tips on how to define a corporate climate strategy.
1 – Compensation Vs Sobriety: Avoiding Making Mistakes
To limit the climatic impact, be it the one from individuals, governments or companies, there is only one solution: to reduce greenhouse gases and CO2 emissions. Yes, make no mistake – to reduce emissions, not to compensate them. The IPCC is clear on this point: all economic sectors will have to reduce their CO2 emissions if we want to achieve our climate objectives.
Admittedly, it will be necessary to implement CO2 capture mechanisms, by, for instance, restoring forest ecosystems or betting on CO2 storage technologies. But that will only be the cherry at the top of the cake after everyone has started doing it, i.e., implementing targets and action plans to reduce emissions.
Therefore, the top 1 priority in a corporate climate strategy needs to be sobriety, not carbon offsetting. So before setting up operations related to reforestation, carbon compensation or carbon storage, we need to be aware of the need to prioritize the reduction of emissions first. In fact, the emissions connected to a company’s core business should be assessed right at the start.
2 – Carry Out A Scope 3 Carbon Assessment
Before carrying out a scope 3 carbon assessment, there is a prerequisite: do a detailed assessment of your greenhouse gas emissions. Basically, find out what is the organization’s carbon footprint. However, this is not just any carbon footprint – it is a carbon scope report 3. What does it mean? It’s simple: scopes 1,2 and 3 are the scales on which a carbon footprint can be measured.
A scope 1 analysis measures are the direct emissions of a company – its consumption of fossil fuels, for instance. Scope 2 is about indirect emissions related to energy. It refers to the CO2 emissions that occur during the production of electricity and the heat a company uses for its various activities. Scope 3 encompasses all the indirect emissions caused by a company’s activities. It includes CO2 emissions from the manufacture of products, CO2 emissions from the different stages of the logistics-chain of suppliers…
In this way, to really know how a company contributes to global warming, a scope 3 carbon footprint becomes a valuable requirement. With its results, it then becomes possible to measure precisely which stages of a product’s or a service’s lifecycle cause more CO2 emissions. These are the main (polluting) symptoms that need to be addressed.
3 – Prioritize The Most Effective Levers For Your Climate Action
Thanks to the data the carbon footprint analysis provided, it becomes possible to identify the activities of a company generating more greenhouse gases. For example, for an agri-food company, the largest CO2 emissions share may be concentrated on the production of raw agricultural materials. On the other hand, for a company providing business services in the tertiary sector, employee travel may be the largest source of emissions.
Once the main sources of CO2 emissions are known, it is possible to implement relevant strategies. For instance, the agri-food company, investing money in converting its HQ to use renewable energy may not be a priority. However, working with suppliers to promote better farming practices, or reworking its recipes to choose products that are less intense in CO2 might be more relevant levers of action.
To adopt a relevant climate strategy, it is necessary to know how to prioritize the most important issues without forgetting to act on the levers that represent the greatest potential for reducing emissions. There is, therefore, an important analytical work to be done across all of the company’s activities. And as we’ve seen, doing a carbon footprint analysis to the main products or services sold will help to get more precise ideas about what needs to change.
At this stage, it is also relevant to make climate risk maps. It will allow an understanding of what activities are likely to be affected by future climate change events. Or how these climate impacts can be avoided or mitigated. A whole section can also be built around climate change adaptation – a concept that is becoming essential today as a consequence of the societal failure in tackling this problem.
At this stage, it is also relevant to make climate risk maps. It will allow an understanding of what activities are likely to be affected by future climate change events. Or how these climate impacts can be avoided or mitigated. A whole section can also be built around climate change adaptation – a concept that is becoming essential today as a consequence of the societal failure in tackling this problem.
4 – Define And Quantify The Goals To Be Achieved
Once these levers have been identified, and once the lines of action have been defined, it is important to set precise, coherent and realistic quantified objectives.Otherwise, implementing this or that strategy without properly setting goals won’t likely be more than unachievable dreams written on a CSR report.
To effectively implement a CSR and climate strategy, management teams must SMARTly set these objectives. If possible, they should also be publicly shared and formally communicated to all employees and stakeholders.
These goals should be specific: reducing of 20% of CO2 emissions per product sold (or another relevant measurement unit) by 2030, for example. These objectives must also be accompanied by a list of action levers so that everyone understands what is expected.
5 – Involve Your Stakeholders
Afterward, obviously, stakeholders need to be involved. Defining a strategy and objectives is good. But what is even more effective is to back up part of the annual objectives of the managers and employees concerned with the achievement of these objectives.
Give them some history and context to foster their internal motivation for these strategic transformations! Training employees about the company’s climate challenges is also very important. These are ways of involving the internal stakeholders of the organization which makes the achievement of climate or other CSR objectives easier.
Nonetheless, this engagement should also be extended to external stakeholders: suppliers, intermediaries, end customers… It would be beneficial that different stakeholders are aware of the companies’ projects and plans. It would likely help improve corporate reputation (with things done the right way), employer branding and synergy or cooperation opportunities.
[Image credits to Jackson on Shutterstock]
