approach to thinking about risks and opportunities in business decision making processes. For example, when evaluating capital investments into a new facility, a company can inquire and collect data about the historical operational costs—including energy data—for existing facilities it is considering for acquisition, and/or factor in how “dirty” the electric grid is in the potential regions where a new facility may be sited. Because an organization already has a baseline understanding of its existing portfolio of facilities, the organization can evaluate potential facilities against their own portfolio’s average emissions as well compare potential acquisitions against each other from a carbon impact standpoint. Siting new facilities in a region with a cleaner electrical grid, or with easier access to cleaner alternative fuels, can be considered alongside other performance and market factors in the capital investment decision making processes. Beyond singular business decisions, having an es-
tablished carbon inventory baseline can facilitate an organization’s goal setting and scenario planning. Companies that have a target year and an established emissions target can draw a line from their established carbon baseline to their designated emissions target to understand the necessary change in their carbon budget over time compared to business as usual (see purple and green lines in graph). Forecasting different projections of possible futures based on the current carbon baseline provides a data-driven approach to stacking individual or decentralized business decisions together to get a comprehensive understanding of the planned emissions reductions, which aggregates the approved project pipeline. The planned emissions reductions can then be compared to the planned emissions gap, or the targeted emissions reduction that has yet to be accounted for based on existing company mitigation strategies. Finally, for companies thinking about supporting
Five simple steps to net-zero 1. Scope emissions sources Accurately and thoroughly scoping emissions sources is key providing your organization with the structure to successfully measure, report analyze and reduce emissions down the road. 2. Establish emissions baselines Building emissions baselines make it a lot easier to view and analyze historical emissions. 3. Assess mitigation and adaptation options Organize and compare emissions reduction opportunities that exist in your corporation. 4. Set an internal carbon price Putting a price tag on your company’s carbon is a powerful and efficient way of incorporating climate risks into the cost of doing business. 5. Commit to a science-based initiative Science-based initiatives bring together a growing collective of energy-smart businesses with ambitious targets in transitioning to a low-carbon economy. These types of initiatives give businesses greater access to resources and communities that can help them develop new low-carbon pathways. a 1.5 degree climate scenario, modeling the path from their carbon baseline to the company’s current goal versus what the target emissions would need to be to achieve the 1.5 degree
scenario can facilitate an internal discussion around the target emissions gap (shown as the steepest emissions pathway in the graph). infrastructurenews.co.nz 31
MANAGEMENT
August - September 2021
