Renewable Energy

Shifting to renewable energy sources and electrifying our grids is critical if we want to reach net-zero. Your company has a key role to play in spurring this transition. Here’s how your business should approach its renewable energy strategy, in order of greatest impact. 

1- CREATE YOUR OWN GREEN ENERGY. The best way to cut both your short and long-term emissions is to create your own source of renewable energy. Installing commercial solar panels is easiest way to do this, and the average payback period is only 5-10 years.

2- WORK WITH LOCAL ENERGY SUPPLIERS. For small business owners, installing commercial solar panels can be a significant upfront investment. If you can’t justify the cost, another great option is to negotiate a renewable energy contract with a local energy supplier. Note that you’ll only be able to do this if you live in a deregulated electricity market.

3- PURCHASE RENEWABLE ENERGY THROUGH LOCAL UTILITIES. Depending on where your business operates, you may even be able to purchase renewable energy directly from your local utility provider. However, the availability of utility-provided renewable energy is greatly influenced by the regional political and regulatory landscape. Some utilities also may not have any green programs given their location, infrastructure, and resources.

4- PURCHASE RECS. If you can’t purchase renewable energy through your local energy supplier or utilities provider, your next-best option is to purchase Renewable Energy Certificates (RECs). RECs are simply an attribute you buy - one REC is created for every megawatt hour of renewable energy generated.

There are two kinds of RECs, bundled and unbundled. Bundled RECs are sold when renewable energy is produced. This means they are tied to the actual creation of renewable energy at a specific time, location, and facility. As such, they are far more impactful than their unbundled counterparts. You can purchase them through your local utility or by contracting with third-party energy suppliers in some states.

Unbundled RECs are sold separately from the renewable energy itself and are available nationally. Although purchasing unbundled RECs can be a cost-effective way to achieve your sustainability goals, they aren’t typically adding new renewable energy to the grid and therefore don't have as positive an impact. Bottom line – use unbundled RECs sparingly and only as a last resort.

Travel & Transportation

Business travel and transportation represents another high-impact area to target for GHG emissions reduction. For office-based businesses, like the services industry, business travel is often the largest source of indirect emissions. In fact, business travel can account for 80% or more of indirect emissions impact in certain industries.

If the pandemic taught us anything, it’s that most business travel isn’t really necessary. Swapping in-person meetings for virtual ones not only significantly reduces emissions but also results in cost savings. These savings can be fed back into the energy efficiency and renewable energy strategies mentioned above. For trips that can’t be avoided, opt for economy over business class and direct flights over cheaper, indirect ones.

If your industry relies on fleet vehicles, such as construction, engineering, and government, start thinking about fleet electrification. Fleet electrification is a key component of the net-zero journey and a meaningful way to reduce Scope 1 emissions. Want to help accelerate the transition to electric vehicles? Check out the EV100 initiative.

Packaging & Materials

A final area to prioritize for short-term emissions reduction is packaging and materials. The raw materials used in products and packaging has an outsized impact on your GHG emissions footprint. For instance, 40% of emissions in the fashion industry come from polyester production, an emissions-intensive, yet commonly used material.

New technologies and materials are emerging every day. Work with your product team and direct suppliers to use lower emissions materials and create more circular goods. Also, be sure to collaborate with industry groups to collectively drive supply-side change. By increasing demand for more sustainable materials, you help make them more rapidly affordable for everyone. Not sure where to start? Eliminate single-use plastics in your operations, products, and packaging.

Historically seen as just a waste problem, it’s become clear that plastic and climate change are inextricably linked. In fact, emissions from plastic production could eclipse the carbon contributions of coal by 2030. By 2050, the plastic industry’s emissions could eat up at least 15% of our global GHG budget.

In short, cutting out materials like plastic not only promotes circularity but also greatly reduces your emissions. Best of all? It’s something you can start working on right now.

Next Steps

We have years, not decades, to avoid the worst consequences of climate change. As a business, there are plenty of ways to do your part. Luckily, nearly all the solutions already exist today. The strategies listed above were chosen because they significantly reduce emissions, have relatively low barriers to entry, and deliver impact during the short window we have to make a difference. But what about Scope 3? Indirect or Scope 3 emissions alone can account for 80-90% of your total GHG impact. Scope 3 includes sources like business travel and product use, but the most common culprit is your supply chain. That’s because many manufacturers, especially in developing countries, power their operations with dirty energy like coal.

Your business can and should partner with suppliers to ensure a just transition to clean energy.