Part One: Measurement
As the planet’s temperature increases, so too is the pressure on the private sector to prioritise reducing emissions. Immediate decarbonisation is necessary to limit global temperature increase to 1.5C. However, the decarbonisation journey is fraught with challenges.
This two-part series will outline how large companies best address decarbonisation. Part One will focus on the challenges of measuring your environmental impact and where Altruistiq optimises this low carbon transition for businesses. Part Two will consider management, identifying opportunities to decarbonise, and the associated challenges.
Why is it important to decarbonise?
Decarbonisation is the process of reducing and removing all man-made carbon emissions, with the goal of reaching net-zero. The concept arose from the decisive 2015 Paris Climate Agreement which spotlighted the urgent action needed in order to limit global warming to well below 2°C above pre-industrial levels and ideally 1.5°C by 2100. A huge 80–90% reduction in greenhouse gas (GHG) emissions globally is needed to meet this target. The decarbonisation of businesses is critical to abating global temperature trajectories.
The Science Based Targets initiative (SBTi) launched the Net-Zero Standard in October 2021. This was the first science-based framework for companies to set net-zero targets. One of the conditions companies must fulfil to meet the SBT Standard is the implementation of long-term deep decarbonisation of 90–95% across all scopes before 2050. This is matched with a limited dependence on carbon removals (5–10%) needed to neutralise residual emissions. Companies must adhere to the Net-Zero Standard and make robust decarbonisation targets in order to be verified by SBTi and align with temperature pathways outlined in the Paris Agreement.
As a result of doing so, companies can expect an improvement in their ability to attract (and retain) customers, talent and capital.
Key steps to transitioning to net-zero
- Measurement — complete an emission inventory in line with GHG Protocol requirements to understand your impact.
(covered in part one of this two-part series)
- Management — identify emission reduction opportunities and implement a mitigation strategy.
- Target setting — set near and long-term science-based targets to reduce emissions across your value chain. Near-term targets refer to rapid actions to reduce emissions in line with 1.5°C over a 5–10 year period.
- Reporting — obtain external verification of corporate net-zero targets by disclosing progress annually.
(covered in part two of this two-part series)
Understanding measurement challenges
Altruistiq has identified three key measurement challenges facing large companies on their decarbonisation journey.
1. Data gathering
Gathering data from across your value chain is an ongoing time intensive and arduous task.
Generating your GHG baseline involves the gathering, cleaning, and processing of vast quantities of emissions data from multiple sources, and aligning it to the appropriate emission factors to calculate your business’s impact. Altruistiq streamlines this process by tailoring data pipelines to automate raw data ingestion to create a high-level emission baseline for your company that is GHG compliant. Automating this process with Altruistiq saves considerable time and operational costs.
2. Data accuracy
Data accuracy in scope 3 data is often low. This is primarily because collecting data from across your supply chain is difficult, time consuming and often met with resistance from suppliers. Furthermore, available data can be in formats that are difficult to use and interpret.
Data accuracy matters. Improving the precision of your inventory drives confidence in sustainability across your business. Data accuracy also pays for itself and generates a return. For companies with significant emissions, increasing data accuracy by even a modest amount is worth millions in carbon value. Greater accuracy is integral to helping business leaders identify and manage opportunities for change as well as realise cost reduction pathways.
Altruistiq prioritises data accuracy, favouring operational over spend-based methodologies. By utilising an extensive emissions factor database and where necessary, composite emission factors, Altruistiq can tailor emission calculations to specific business activities. Composite emission factors combine multiple emission factors in weighted averages to more accurately represent an emitting activity. This ensures a precise breakdown of your company’s exact emission impact.
3. Data exchange
Data exchange across the whole value chain, including suppliers and retailers, is not standard, often causing a data request overload across your company’s ecosystem.
Altruistiq provides an external interface for your entire value chain, integrating data from across your value chain and coordinating with thousands of suppliers and retailers. This reduces the data management burden and enables cross-supply chain engagement in the decarbonisation process.
Decarbonisation is a long-term, iterative process. However, in order to reach net-zero, it is necessary to fully embrace this challenge. Altruistiq can accelerate and facilitate this journey through improved data measurement and management, assisting business leaders to identify cost-effective opportunities to reduce their company’s environmental impact and align it with verified and credible standards.
We believe that business has the power to be a force for positive change in the world. Furthermore, we believe those leading the transition to a low-carbon society will elevate their brands and enable all stakeholders to realise what Mark Carney has called “the greatest commercial opportunity of our time”.
To find out more about how Altruistiq could support your business in its sustainability transition, drop us a line at firstname.lastname@example.org.
Altruistiq provides businesses with the technology infrastructure needed to measure, manage and abate their sustainability impact, through a climate software solution.