To avoid a climate disaster over the next few decades, the UN has unveiled that we need to cut global emissions by 45% more than what’s currently projected by 2030, based on existing policies. It’s clear that the future is stark if we continue down the same path, and companies can’t just commit to “carbon neutral” policies. To truly change the outlook, we need to reduce and reverse greenhouse gas (GHG) emissions, and that requires something different: decarbonisation.
That will require a gigantic effort to reduce and reverse greenhouse gas emissions in every sector, and a clear plan to stick to climate pledges from every emitter.
Decarbonisation is the best path forward for quickly achieving a more sustainable future for our planet as a whole, as well as more efficient operations within your own company. But you’ll need buy-in from all levels to implement clean energy sources and accelerate savings. Here’s how to get started with decarbonisation and what it means for every role in your organisation.
What is decarbonisation?
Decarbonisation is the process of reducing the amount of human-produced carbon dioxide that’s emitted into the atmosphere, either by implementing new technologies to reduce emissions or by adjusting existing processes to become more efficient. (understand more about 'deep decarbonization' here).
The goal of this process is multi-faceted, but its main purpose is sustainability, and reversing the damage that’s already been done by dumping too much carbon into the atmosphere. In 2015, almost 200 nations signed the Paris Agreement, committing to hold the century’s average global temperature to below 2°C in order to stop dangerous warming. To do that, carbon and GHG emissions actually need to be reduced overall and removed from the atmosphere, rather than increased.
At the company level, decarbonisation serves many other significant purposes. It leads to energy savings, operational efficiency, and innovation through implementing alternative energy sources and technologies. If your organisation has broader goals in any of these areas, decarbonisation can help you get there.
Why do we need decarbonisation?
The answer is simple: strategies like carbon neutrality and carbon offsetting aren’t enough to make a difference and lighten the impacts of climate change. True decarbonisation is the best way to reduce emissions globally, and for companies to also reduce consumption and achieve energy efficiency.
The 2022 UN Emissions Gap Report found that collectively, we’re falling short of Paris Agreement goals, and we need real, urgent action to reverse the trend. Decarbonisation is the most aggressive and best strategy because it focuses on lowering existing levels of carbon in the atmosphere. Other policies like carbon offsetting might maintain existing levels, but try to introduce methods to balance out those emissions in the long-term (such as through renewable energy investments.)
Why should companies care about decarbonisation?
The industrial and commercial sectors play a huge role in global emissions. By decarbonising their own organisations, they can make a significant impact on sustainability, and our progress towards climate goals, such as those laid out in the Paris Agreement.
A quick look at the data shows that:
- Nearly 25% of global GHG emissions come from energy use in industry
- Another 5.2% is attributed to industrial use
- Another 17.5% comes from energy use in buildings
How does decarbonisation work for you?
In the industrial and commercial sectors, decarbonisation means reducing GHG emissions to achieve specified targets in order to reach net zero. In plain language, that means that the amount of carbon that a company produces is a wash; you don’t add any more carbon to the atmosphere through your operations.
There are a few different approaches you can take to decarbonise, including:
- Changing or updating your operating processes to reduce carbon emissions over time
- Adopting alternative energy sources and moving away from fossil fuels like oil and gas
- Implementing energy-efficient cooling technology, like heat pumps
- Using carbon capture and storage (CCS) to remove and store carbon outside the atmosphere
- Implementing a shipping decarbonisation strategy to cut down on supply chain and transport emissions
The specific solution you use will depend on your facilities, products, and processes. But no matter your existing setup and needs, good carbonisation solutions bring everyone in the company together to work towards net zero goals, while still optimising your factory performance.
Why decarbonisation matters to every person at your company
Decarbonisation means something a little different to each person at your company, and they each play their own role in getting solutions off the ground. Here’s how it impacts every member of the team so you can stay fully aligned on both sustainability and business goals.
Chief Executive Officer
Investing in decarbonisation not only opens up your available capital — always important to any organisation — but it also boosts both your employer brand and your public reputation.
- Reputation: Decarbonisation initiatives help improve your reputation by making actual progress towards sustainability and emissions reductions. You’re not just greenwashing here; you’re taking real action and making progress towards your targets.
- Cost of capital: You’ll lower your cost of capital by achieving cost savings through lower energy consumption. You’re effectively manufacturing the same product at a lower cost, and through more efficient processes, so you can build more value into your business.
- Talent acquisition: You’ll amp up your ability to acquire top talent, since people want to work for companies that commit to improving sustainability.
Chief Financial Officer
For CFOs, decarbonisation can help improve the financial outlook and performance of your organisation.
- Cost of capital: By optimising your cost of capital, you can turn a greater profit and improve your margins, making decarbonisation a smart financial investment.
- Compliance: Decarbonising helps you maintain compliance with laws and regulations around emissions and reporting, so that you can avoid fines, penalties, and sanctions.
- Business standing: You’ll maintain strong relationships with your customers and value chain partners, who will most likely be sourcing from sustainability-minded companies moving forward. Because of the impact of Scope 3 emissions, they will only look for suppliers who can meet their own emissions reductions targets.
Regional Operations Managers
Often, the decision to decarbonise is one that’s made for the entire organisation — but it will undoubtedly help the facilities that you oversee by helping them become more efficient.
- Alignment with leadership: Stay aligned with company leadership and report back to your C-suite leaders, as well as the board, about the consistent progress you’re making towards your emissions reductions targets. Decarbonisation is the most effective way to contribute towards wider company goals.
- Cost savings: Reduce the overall spend for running the facilities under your purview by lowering energy consumption and improving technology. You can then reinvest those savings elsewhere, into other upgrades or maintenance needs.
- Limit downtime: Reduce downtime and increase the volume of products you have going out. Decarbonisation typically requires you to upgrade your energy sources and technology, but this investment is worth it so that you can become more efficient in your operations.
Factory Operations Managers
If you’re responsible for managing one factory, you’ll see the benefits of decarbonisation swiftly and at an even more granular level. Along with cost and time savings, performance will improve thanks to more efficient processes.
- Reduce downtime: Thanks to improved operational efficiency with upgraded technology and process flows, you can reduce downtime across your factory.
- Reduce costs: Throughout the decarbonisation process, you’ll identify opportunities for improvements and savings when it comes to your emissions. That will help you lower energy consumption and in turn, energy costs.
- Factory performance: You’ll improve your KPIs in nearly every category thanks to greater efficiency, too. For example, you can enable your engineering team to achieve higher throughput, uptime, and cycle time if you find a more efficient way to cool your facility without leading to breakdowns or slowdowns in production.
As the people responsible for spearheading sustainability at your factory and within your organisation, you already know how important these efforts are. But here’s why a seamless, coordinated strategy to cut back on emissions is so significant.
- Organisation-wide impact: Decarbonisation is the most straightforward and significant way to impact sustainability goals for your organisation. You can’t measurably make progress towards your reductions targets without it.
- Communicate progress with leadership: A decarbonisation strategy can help you effectively report on your progress to company leadership. With decarbonisation, you’re consistently monitoring solutions and checking progress towards targets. You can demonstrate that your organisation is taking real action towards becoming more sustainable — and efficient.
Accelerate towards decarbonisation goals with a carbon management system
Decarbonisation is a huge undertaking for any company, and no matter how dedicated your team is, the journey is much smoother and faster with a dedicated carbon management system. At CoolPlanet, we offer exactly this type of system to help you set and achieve your emissions reductions targets. Plus, we work with you from the boardroom to the plant level to implement a plan, monitor progress, and keep everyone on the team in the loop.
From plant managers to company leadership to sustainability managers, we partner directly with you, strategise a roadmap, and help you roll it out to achieve results. Learn more about how a decarbonisation partner like CoolPlanet can help your team on the way to net zero.