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Corporate decarbonization as a business discipline is still in its infancy. It hasn’t yet reached the same level of ubiquity, maturity, and structure as the traditional finance, human resources, IT and other functions within an organization. Not only is decarbonization not yet treated as an enterprise resource, but even the major supporting elements of the corporate program — setting up a strategy and a transformation program, focusing on implementation, and equipping yourself with a carbon data management rigorous system — are disconnected both from each other and from broader business objectives.
An organization’s decarbonization program will only be successful if it’s treated holistically, and fully integrated within the enterprise organization. It is one full transformational program, not a handful of standalone projects activated one after the other.
As a functional discipline, corporate decarbonization is still being developed and defined. Most organizations won’t currently have the internal expertise needed for proper program development and oversight, and the current war for talent makes finding and hiring for those roles even more challenging. Additionally, existing corporate governances are typically inadequate for the development or rollout of decarbonization programs — meaning there will be necessary enterprise-level shifts going well beyond just getting the right headcount in place.
Of course, external consultancies can bring the necessary talent and expertise to have a scaling effect across a complicated global organization — supporting both technical and behavioral changes by identifying areas for improvement, helping set goals and targets and developing action plans to achieve them. That’s the basics of any advisory partnership, but too many organizations assume the basics will be enough for decarbonization.
Henkel and ENGIE Impact share how they successfully partnered to develop and deliver emission reduction at speed and scale. View Discussion→
Impactful corporate decarbonization programs require broad input from key stakeholders, including employees, customers, investors, and suppliers — generating positive internal and external change, creating a culture of continuous improvement and innovation, and establishing coalition support from top to bottom. They also need a keen understanding of the latest climate science and emerging technologies, to help navigate complex technical challenges and make informed decisions. And we know that getting from strategy to implementation is the hardest part. That means that in addition to a carbon advisor having to walk the floors of the organization, ask the right questions, and build broad momentum, they also need to be ready to commit to driving the outcomes as well.
Corporate decarbonization advisory is like no other partnership. There’s a necessary dedication, knowledge and capacity to be able to develop a strategy and then also transition into making it happen — putting new processes in place, staying on top of the progress, bringing new financing options and delivering business-aligned results.
The hard part is all about implementation. It’s a different experience when a consultancy puts together a decarbonization recommendation hoping they’ve set their client up for success, compared to when a consultancy gives a strategic recommendation that they themselves are ready to commit to fulfilling right away. There is power and efficiency in the delivery of the work, and they know the execution is possible and how to go about doing it.
One can quickly see the burden that comes along with compartmentalizing the different aspects of corporate decarbonization, slicing the work into its parts and pieces across multiple different internal and external groups and the subsequent time investment, overall cost, onboarding efforts and struggle to maintain consistency. Any momentum and excitement around an organizational decarbonization strategy will quickly wane under those circumstances, delaying the desired ultimate outcomes.
There’s a reason many organizations — even large, Fortune 500 companies — don’t include some of these traditional enterprise resource functions as part of their core capabilities. They’ll have in-house teams in place to help manage and oversee the work, but a big part of the implementation effort is outsourced to firms with dedicated expertise, reducing the burden on the organization.
The right implementation partner will identify the best financing options — including previously unexplored possibilities — by leveraging their industry expertise and network. That networking may also provide a strong portfolio effect, minimizing volatility through diversification. This additional layer of accountability as a service ensures projects are completed on time, within budget and aligned with established goals and benchmarks. That outside wealth of knowledge and resources allows an organization to focus on its core capabilities and improve the time to implementation.
Implementation partnerships, especially in the emerging sustainability and decarbonization spaces, bring with them the networks, connections and relationships necessary to scale up the programs and achieve greater impact. They will be keenly aware of emerging technologies, which ones are yet to be proven and which ones might be ready to apply within an organization.
Carbon data management is a system that truly allows you to use carbon data as a leading indicator to drive change.
Collecting data on greenhouse gas emissions, energy consumption, and other sustainability metrics, tracking targets and progresses at the granular programs’ levels and reporting performance at the enterprise level to regulators and outside stakeholders — and using one of the various unproven software-as-a-service tools to do it — is not properly managing data. Unfortunately, that’s what many organizations do today, and it results in them treating carbon as a lagging indicator with a one-year backward-looking aggregated picture. It only shows the effectiveness of the program you’ve already set up and limits your monitoring to what has already happened.
But just like with financial indicators that require ongoing analysis — knowing where you are, what the forecasting looks like, and where adjustments need to be made — active carbon data management means proactively identifying opportunities for adjustments and improvement. It requires custom modeling and software implementations, with experts who can understand, analyze and report back on the data to corporate stakeholders. While some stakeholders may want or need direct access to the full data, it’s more likely a simplified dashboard with the most relevant KPIs will provide ongoing utility to the organization.
Carbon data management is not a software solution, but a customized managed service based on commitments, expected outcomes, and an expert understanding of both the corporate strategy and the complexities of the market — especially as it relates to Scope 3 and the potential exponential growth of carbon data sources to consider. There needs to be a fundamental foundation of carbon data collection that provides accuracy, has protocols for managing any missing data and ensures a comprehensive database. Expertise in data management can help to gather and analyze data from across the organization, providing a clear picture of the company's emissions and energy consumption.
If you don’t have quality carbon data inputs and processes, the analysis and roadmap output will suffer.
It should come as no surprise that the most effective carbon data management programs are ones implemented and managed by the same groups who have been with you for your whole decarbonization journey.
Carbon data management, implementation partnerships and externalized advisory are interconnected and interdependent parts of corporate decarbonization. Maximizing the transformation effect one can get is about looking at the synergies between these three components. Without reliable carbon data management, it is impossible to determine the effectiveness of any implementation efforts or put together a clear strategy to begin with. Without reliable monthly — or even more frequent — carbon data management, you can’t embed carbon as a leading indicator for leaders to steer their business efficiently from a decarbonization strategy perspective.
The right implementation partnerships provide the expertise, resources and infrastructure needed to execute in lockstep with the established strategy — ensuring the right technologies and solutions are selected and deployed effectively.
A corporate advisory that provides the necessary commitments to specific outcomes — moving beyond high-level recommendations and including specific executional efforts — will also work to have a keen understanding of changes in the market. The ongoing evolution of prices, available technologies and market trends will allow for continuous improvement to a company's decarbonization efforts — ensuring they are still effective as trends change.
Companies that seek to reduce their carbon footprint are increasingly recognizing the importance of a comprehensive approach. Despite the well-established fundamentals of the decarbonization process, the journey can still be challenging, as navigating the intricate landscape of carbon reduction strategies requires expertise and collaboration. Companies that take bold action to understand the value of a comprehensive decarbonization program — one that seamlessly integrates advisory services, implementation partnerships, and carbon data management — will be better positioned to achieve their business objectives.
And just like many more established corporate functions, organizations don’t have to do it all themselves. Having a strategy without implementation plans is wishful thinking. But an external partner with all the necessary capabilities will create more certainty around the strategy being actionable and properly financed, streamline and shorten the process, and establish centralized accountability for the outcome of the entire decarbonization program — as well as sharing involved risks. This kind of centralized accountability ensures all the stakeholders involved in the decarbonization process are aware of their roles and responsibilities, and that progress is being made toward achieving the desired outcome.
Partnering with an organization that will be with you throughout the whole decarbonization journey will ensure they too are dedicated to the eventual outcomes — willing to do what needs to be done in order to create the right momentum for decarbonization at speed and at scale.
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