Best Practices in Carbon Strategy Development

Below is a checklist of steps – adapted from findings of the Pew Center on Global Climate Change – that industry leaders are using to develop their climate-change strategies.

• Step 1: Assess Emissions Profile - Develop a complete inventory of direct and indirect GHG emissions from your operations and your supply chain, based on World Resources Institute/World Business Council on Sustainable Development GHG Protocol Corporate Accounting standards.
• Step 2: Gauge Risks and Opportunities - Benchmark your situation and outlook with initial focus on risk reduction and then shift to potential for competitive advantage. See what risks are posed by GHG emissions from your operations and how you may be able to optimize climate-friendly or risk-reducing business lines.
• Step 3: Evaluate Action Options - Seek ways to reduce GHGs while supporting core business objectives. Learn what options are available for reducing emissions, especially via "low-hanging" opportunities, and see how your climate-related strategies can enhance top-line and bottom-line objectives.
• Step 4: Set Goals/Targets – Address business drivers including potential cost savings, social responsibility and reputation enhancement (with opportunity to foresee and influence future regulation). See what kinds of efficiency targets should be set, over what time period and how targets can be connected to business strategy.
• Step 5: Develop Financial Mechanisms – Define costs associated with meeting (or not meeting) emission goals as well as the pros and cons of emissions trading (internal and external), carbon shadow pricing, lower hurdle rates, and special capital reserves.
• Step 6: Engage the Organization – Communication, motivation and performance management are all required. Find a way to get buy-in from the workforce and senior leadership, identifying sources of support and resistance in order to move GHG issues from the periphery to the core.
• Step 7: Formulate Policy Strategy – Industry leaders agree that more regulation is imminent with market trading, sequestration credit, federal regulation to supersede a growing "patchwork" of state laws, and credit for early action. Think how new policies may impact your business and how to influence policy formulation.
• Step 8: Manage External Relations – Outreach is critical to success. Outside groups may be sources of resistance that must be overcome OR they can provide knowledge and avenues for advancing business objectives. Develop plans and systems to reach your organization’s external constituents.

To implement the steps above, your organization must be able to collect and aggregate vast quantities of GHG emissions information from across the enterprise and then put it into a form that makes it easy to monitor, understand and utilize for decision-making. ESS can provide you with the tools you need to develop and execute your carbon management strategy.