What is a decarbonisation strategy?

What is a decarbonisation strategy? It’s an ESG-related plan showing how a business will transition to greener operations.

Decarbonisation has emerged as a critical focus for businesses across various sectors. It receives its fair share of debate, but ultimately, the concept is core to many stakeholder patterns, including investment, purchasing, and regulation. In other words, the key groups connected to a business often want to see decarbonisation happen. 

A decarbonisation strategy is how your business will make it happen. 

It’s not just a buzzword; it’s a concrete, actionable plan to reduce carbon emissions and mitigate the impact of climate change.

A decarbonisation strategy is a comprehensive plan designed to reduce or eliminate carbon emissions. It often applies to one business but could also apply to an entire sector or even an economy. 

Typical strategies involve a combination of energy efficiency measures, transitioning to renewable energy sources, and implementing innovative technologies to reduce the carbon footprint of operations, products, and services.

The ultimate goal of a decarbonisation strategy is to achieve net-zero carbon emissions or to meet carbon reduction targets set by the business stakeholders or national regulators.

It systematically identifies sources of carbon emissions within a business and then implements measures to reduce or eliminate these emissions. Every company will be different when it comes to details, but here’s a sample step-by-step overview:

1. Assessment and Benchmarking: The first step is to assess the organisation’s current carbon footprint. Where do emissions come from—either directly or indirectly through suppliers, etc.? 
2. Setting Targets: Based on the assessment, the organisation decides on reduction targets. These targets will usually align with broader goals (i.e. net zero or a specific reduction by a particular year). Many governments are setting legal targets to fuel activity in this area. 
3. Developing Action Plans: The next step involves developing detailed action plans to achieve the targets. This breaks larger goals into smaller ones, forming a clear, step-by-step process. Measures could include improving energy efficiency, investing in renewable energy, transitioning to electric vehicles, and optimising supply chain operations.
4. Implementation: The organisation then implements the action plans, which may require investment in new technologies, ESG training for staff, and changes to operational processes.
5. Monitoring and Reporting: There’s no getting away from it. Continuous monitoring is essential to tracking progress towards the targets. Reporting needs to be clear, regular, and written in a format stakeholders will understand.
6. 6. Review and Adaptation: Regular reviews should feed adjustments to strategy wherever needed.

A good decarbonisation strategy is about a precise balance of ambition and realism. 

Targets should be ambitious enough to please critical stakeholders and show meaningful engagement. Still, they should not be so large that they are unachievable – this issue will raise greenwashing concerns. 

Equally, a good strategy will clearly balance all areas of an organisation’s operations. Decarbonisation shouldn’t just focus on one element of business but on everything. 

Finally, a good strategy will balance the needs of all stakeholders. Each group will have different ideals for decarbonisation and may see different impacts once a strategy is implemented. Engaging with all groups at every stage in the process means you will likely enjoy stronger support longer – a critical asset during such a big transition.

A well-crafted decarbonisation strategy enables organisations to reduce their carbon footprint, mitigate risks, and seize new opportunities in the green economy. Critically, it allows organisations to do all this sustainably, with the support of key stakeholders.