The first step on the journey to net zero is always to measure. Conduct a comprehensive accounting of your energy usage and the emissions resulting from your business operations. It's crucial to also include your indirect (scope 3) emissions and then set ambitious yet achievable targets for emission reductions and transitioning to renewable energy. The Science-Based Targets Net Zero standard is a reputable framework that focuses on six criteria critical to limiting global warming to 1.5°C by the end of the century: standardisation, ambition, impact, accountability, transparency and credibility.
Next, reduce your emissions. The best way to do this is to invest in energy efficiency measures. These should look at the saving potential from all sides, from changing employee behaviour to investing in modern technology; this way you can start reducing your scope 1 and 2 emissions at the source. You could also look into switching to biogas as a more eco friendly, regional alternative. Biogas is produced from biodegradable sources – including manure and organic waste – in an environmentally-friendly way before being upgraded to biomethane of the same quality as natural gas and injected into the existing gas grid.
When it comes to scope 2 emissions, sourcing renewable energy is one of the most effective ways to achieve reductions quickly and contain rising energy costs. This makes it a powerful place to begin and a cornerstone of an integrated climate strategy.
If you're looking for an easy first step, Energy Attribute Certificates (EACs) are widely available globally and can be transacted in a matter of a few weeks. However, there will always be a cost involved in purchasing EACs and, particularly as manufacturing is energy intensive, you may want to look for cost-saving opportunities in geographies that would be better served by other solutions. The key is to develop a holistic, long-term strategy that can unlock those cost-savings and also provide energy price risk management alongside meeting your sustainability objectives. This can mean considering off-site power purchase agreements (PPAs), on-site generation, or bundled/unbundled EACs.
The urgency of engaging supply chains to take climate action
Companies face costs of up to US$120 billion from environmental risks in their supply chains within the next five years according to CDP. Meanwhile, the emissions from a company's supply chain are on average 11.4 times higher than those from its operations. Add to this the growing pressure to report scope 3 emissions and it's clear that managing GHG emissions and product impacts throughout your supply chain is crucial to remaining competitive and resilient.
As a manufacturer who wields control as a buyer of goods and services, you are ideally positioned to demand transparency from your suppliers. The 2021 CDP Global Supply Chain Report found this to be a highly effective mechanism in driving disclosure and encouraging suppliers to cut emissions and costs. In 2021, suppliers disclosing through CDP reported emission reductions of 1.8 billion tonnes CO2e and savings of over US $29 billion. How do you address these indirect emissions? One very effective plan of action is to start repowering your supply chain by accelerating your suppliers' transition to renewable electricity. This will be a global effort that fosters collaboration and long-term relationships with your suppliers.
Embrace circularity in manufacturing
The circular economy has been called the biggest revolution in the global economy in 250 years. The concept is grounded in the closed-loop model of “reduce, reuse, recycle, recover", replacing the linear model of “take, make, waste". Circular systems minimise resource inputs, keeping products, equipment and infrastructure in service longer, while reducing waste, pollution and carbon emissions. Circularity and product design are also key levers for reducing the use of virgin materials and therefore reducing scope 3 emissions.