The Greek philosopher Aristotle famously said, “The whole is greater than the sum of its parts.” We would be wise to heed these words when it comes to carbon reduction plans, because it’s all hands on deck time.
Any serious approach to reduce atmospheric carbon needs to adhere to keeping global temperatures under the all-important two degrees Celsius threshold set forth in the Paris Agreement. This is a steep and necessary climb for business across the globe. To hit the two degrees target, companies need to expand their collective “spheres of influence” and take action to reduce all forms of their carbon emissions, including within their global supply chains.
For all companies, the first step is to reduce their direct emissions by increasing energy efficiency within their business operations (i.e., Scope 1 emissions). Business can then further reduce their emissions by purchasing electricity that comes from renewable sources of power generation (i.e., Scope 2 emissions). However, for some organizations their largest potential impact might take place outside of their operational footprint and results from emission reductions within their supply chain (i.e., Scope 3 emissions).
The question companies should ask themselves is: “How do we activate and accelerate action on climate using our spheres of influence?”
One answer can be found with the companies that have committed to move beyond Scope 1 and Scope 2 by signing on to the Science Based Targets Initiative, a collaboration of leading science-based organizations. Companies such as General Mills, MetLife, ADP, and 400 others, have committed to reduce their Scope 1, Scope 2 and Scope 3 emissions.
While there is no “silver bullet”, Power Purchase Agreements (PPA) have provided a financing vehicle for companies to secure access to renewable energy, either on site or offsite, without having to use precious internal capital.
While green megawatts are critical to carbon reduction from renewable energy, “negawatts” from energy efficiency will be even more important given the cost effectiveness and speed at which it can be deployed.
Fortune 500 firms are again looking to financing solutions to spur investment and achieve scale in their carbon reductions. This includes Efficiency Services Agreements (ESAs), which are an emerging model for 3rd party owned building system infrastructure, including boilers, chillers, HVAC and lighting and building automation systems. These off-balance sheet service agreements allow organizations to upgrade while also achieving both energy and carbon reductions while preserving capital.
It’s time for more companies to act by activating their supply/ value chains. This one action has the potential to achieve energy efficiency and GHG reductions at an unprecedented scale and impact. Both PPAs and ESAs can be utilized to address Scope 1, 2 and 3 emissions by providing what is often missing from sustainability plans: namely, a sustainability budget.
Aristotle was right “the whole is greater than the sum or it’s parts” when it comes to combating the impacts of climate change. It is critical to our collective futures…. or in the words of another noted philosopher, Yoda, “Do or do not. …there is no try.”