Decarbonising your business is a complex task and planning your approach can be daunting. This article breaks down the different elements to consider when planning your decarbonisation journey to help you determine where to focus your efforts. It identifies three key areas of focus:

Emissions arise from a number of different business activities that occur within your organisation and along its value chain. Some of these business activities will contribute more to your carbon footprint than others, based on several factors. We refer to your business activities that produce the most total emissions as your 'emission hotspots'. These broadly correlate to emission categories as per the GHG protocol.

It usually makes sense to concentrate resources on tackling your emission hotspots first, as these will bring the most significant return on investment and reduce emissions quickest. You can review your emissions hotspots using the 'Measure emissions' page on the Plan A Sustainability Platform.

No two companies are the same, and different organisations will have different hotspots, so a comprehensive assessment of your organisation's emissions is a crucial first step. Effective data collection is the cornerstone of gaining an accurate overview of emissions hotspots and developing robust decarbonisation strategies. Data-driven insights will help you to make informed decisions, optimise your operations, and align with sustainability goals. Implementing comprehensive data collection processes is critical to securing a solid foundation for your decarbonisation journey.

However, we understand that data collection in the early stages of your organisation's sustainability journey can be a difficult task. Whilst calculating your base year emissions with as much accurate data as possible should be a priority, it should not be the barrier to implementing decarbonisation actions since, for many industry sectors, the main emission drivers are already clearly identified (e.g., for companies within the food industry that uses agricultural commodities, one primary source of emissions is deforestation and soil management practices). Accurate data can be a tool for refining targets, monitoring progress, and reporting.

The three scopes of GHG emissions - Scope 1 (direct emissions), Scope 2 (indirect emissions from purchased energy), and Scope 3 (other indirect emissions) - present varying degrees of complexity when it comes to decarbonisation due to the varying degrees of influence companies have over different scopes of emissions. For instance, scope 1 emissions are produced directly by the reporting company, whereas scope 2 and 3 emissions are released by other companies but fuelled by the business activities of the reporting company, meaning they are produced indirectly by the reporting company.

Therefore, companies will ultimately be required to identify the largest sources of emissions within their operations and supply chain. Organisations must prioritise different emission scopes and categories and implement a reduction strategy and actions with the most significant potential impact on their total corporate carbon footprint (CCF).

Scope 1 emissions, including those from stationary and mobile combustion as well as fugitive emissions, are the direct emissions from sources owned or controlled by your organisation, meaning you have direct control over these emissions. Depending on your emissions hotspots, possible actions could include transitioning fuel combustion sources like boilers and furnaces to lower-carbon alternatives or replacing ageing combustion engine vehicles in your fleet with electric or hybrid alternatives.

Since these are emissions that you have direct control over, this could be an effective place to start if your organisation's Scope 1 emissions are a hotspot.

Scope 2 emissions are indirect since they come from the consumption of energy purchased from utility companies. However, organisations have the ability to reduce Scope 2 emissions by focusing on the supply and demand sides. On the demand side, organisations have the ability to reduce energy consumption through various measures such as energy efficiency projects. On the supply side, organisations can also engage with utility providers to increase their renewable energy mix and advocate for a greener grid or simply switch to a supplier which provides energy from renewable sources.

Scope 3 emissions can be thought of as value chain emissions, and approaching them can be more complex given organisations' indirect ownership of them. However, similar to Scope 2, organisations can take steps to either reduce activities driving emissions (demand side), improve the GHG intensity of those activities (supply side), or both. It can, therefore, involve setting policies to reduce certain business activities such as business travel as well as engaging your suppliers to calculate and reduce the emissions intensity of their goods and services.

The SBTi (p. 14) highlight the most relevant types of decarbonisation actions for each of the Scope 3 categories:

More than this, focussing on Scope 3 emissions reduction offers the chance to critically

reflect on the sustainability of your organisation's current business model and offering. For organisations selling physical products, this could involve evaluating opportunities for sustainable product design, material substitutions, and circular economy business models to reduce emissions during use and end-of-life phases. Meanwhile, for service providers, options can be explored to optimise efficiency and reduce the emissions intensity of processes that constitute the end-to-end delivery of services.

Scope 3 decarbonisation undoubtedly requires the highest levels of planning. However, doing so also usually has the potential to provide the biggest emission reductions.

First and foremost, individual decarbonisation actions should be prioritised based on emissions hotspots, implementation effort, and return on investment. Within each scope, your planning team should balance quick-win initiatives that can be implemented rapidly with longer-term, higher-impact projects. Once you have begun your decarbonisation journey, it is crucial to regularly review and adjust your action plan to reflect emerging technologies and changing market conditions.

Businesses cannot undergo a green transition independently—many stakeholders must be actively engaged in this journey. As such, companies that commit to reducing their carbon emissions must understand the best stakeholder engagement and management practices to ensure an efficient and effective transition, especially for collectively reducing emissions along the value chains.

Determining who your stakeholders are is the first step. These usually include employees, customers, suppliers, investors, and shareholders. Once you've determined the relevant stakeholders, you can take several steps to engage them on the sustainability journey.

There is no engagement without communication, so developing a defined communication process is vital to an effective engagement strategy. This will allow for the communication of targets and initiatives, create a space for stakeholder input, and build trust.

Additionally, organisations should truthfully communicate the role of sustainability within their operations and progress towards targets. This could involve communications about investments in new physical assets, product redesigns, and other sustainability initiatives and outcomes, as well as challenges faced and the learnings that have come along with them.

Analysing risks and opportunities is vital in managing stakeholders, particularly investors. Stakeholders want to see that businesses have thoroughly analysed both the risks and the opportunities that sustainability poses to them and their value chain. Therefore, companies should develop channels for holistic and continuous assessments of transition-related risks to be communicated. This allows for opportunities relating to shifts in regulations, investor preferences, consumer behaviours, and competition to be evaluated by your organisation and its stakeholders.

Collaboration requires common understanding and goals. With this, it is possible for different parties to feel incentivised to cooperate. Here, identifying what motivates different stakeholders to cooperate or not is critical. For instance, some suppliers may require tangible incentives (e.g., price premiums, longer/safer contracts), others may need financial support to take action, and customers may want to feel more personally involved with companies through member pricing and other forms of recognition, etc.

Establishing common objectives is another powerful tool for strengthening cooperation, especially with suppliers and investors. Companies, their suppliers, and investors may be subject to the same climate and environmental regulations, or they may all be pursuing individual decarbonisation strategies. Sharing the effort can reduce the risks and resource burden required to achieve significant emissions reductions. These are examples of hidden motivations from which companies can benefit.

Evaluation and optimisation are integral parts of any process. Organisations should assess which aspects of their stakeholder engagement strategies work and which require further refinement. This will allow your organisation to be better prepared to expand your engagement with stakeholders further along your value chain, which can significantly influence emissions reductions.