Every solution to climate change requires decoupling economic growth and emissions. The choice is stark: Accept more emissions and more climate change, or accept a lower standard of living with less emissions. Spiking energy prices and power-cut mandates make decoupling an urgent priority in Europe, and U.S. businesses are not sheltered either in our globally linked economy.
For CEOs and their leadership teams, the path to decoupling revenues and emissions is not clear. For example, a CEO in the steel industry cannot exit steel manufacturing; she must execute a strategy within an inherently energy-intensive manufacturing process. What are the levers to pull in the near and immediate term that enable the strongest possible economic performance while cutting energy use and emissions? What data is needed to make those decisions?
Based on my company’s experience with thousands of homes and businesses, I have developed a straightforward method to find the least-cost opportunities for energy reductions. It may be a bit surprising to hear that the same approach works for both homes and businesses, but experience shows that the method is the same in both settings while the specific solutions may differ.
Start At The Bottom
Policy analysts can propose solutions to climate change or emissions reduction with broad brush strokes, but business plans for energy and emissions reductions require a different approach. Each property site has assets in place and operational procedures. Opportunities for reductions are by asset and by procedure, with the cost of change varying quite a bit by project, by site and by locale.
A corporate reduction plan is a portfolio of projects. The optimal reduction plan is built by scanning the portfolio and prioritizing the projects with the best economics. A bottom-up data approach to emissions reductions is required.
A Portfolio Of Data-Driven Business PlansEnergy and emissions reduction planning is a data-driven process, and granular asset-level data is needed. Data from utility bills and IoT sensors build the business case for each reduction project. But the raw data is not enough. Emissions reduction is ultimately a financial-planning exercise, and one that has risen to strategic C-suite importance. Sustainability data must be as rigorously prepared as the financial data. Otherwise, one is evaluating a financial expenditure, say a CapEx investment, based on a guess-estimate of impact. So bring together finance, sustainability and IT teams and build the sustainability data framework and pipeline that delivers high-quality, reliable information that is ready for review by the CEO, top team and board of directors.
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