Decarbonization 101: How To Lower Your Carbon Footprint

By: Pivot Energy

May 31 2023

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Increasingly, business owners feel pressure from investors, clients, employees, governments, and society to adjust their day-to-day business operations to mitigate climate change. However, many different terms flying around make it difficult for modern companies to understand how to appease all of these opinionated communities. Finding success in today’s markets means much more than releasing the next great product or service; there are new underlying expectations that everyone should incorporate climate change solutions into their developing business model.

When establishing sustainable business practices, the first step is to ensure you’re up to date with the latest eco-friendly terminology. There’s a long laundry list of concepts to learn, but they all boil down to one all encompassing word: decarbonization. The term decarbonization refers to the process of reducing your overall carbon footprint and aiding our nation's transition to a low-carbon economy. If you’re sitting there wondering what those words mean, read through the following definitions, and you’ll soon understand how and where to make efficient changes to your business.

Global Warming vs Climate Change

Global warming and climate change are related but distinct concepts.

Global warming refers specifically to the long-term increase in the Earth's average surface temperature, primarily due to the buildup of greenhouse gases in the atmosphere. On the other hand, climate change refers to a broad range of long-term changes in global climate patterns, including changes in temperature, precipitation, and extreme weather events, as well as the impacts of these changes on ecosystems, human health, and economies. While global warming is a key driver of climate change, climate change encompasses a much wider range of impacts and consequences beyond just temperature changes.

How does one define ESG?

The acronym ESG refers to “Environmental, Social, and Governance”, which is a set of criteria that investors and other stakeholders use to evaluate a company's sustainability and ethical practices.

Today, being mindful of the various ESG principles is critical for long-term success. Analysts evaluate ESG metrics, ESG scores, or ESG data to determine whether a company’s business practices are sustainable. This criteria is becoming increasingly important to investors, who want to ensure they are backing companies committed to being socially responsible. As it turns out, a well thought out ESG strategy tends to coincide with lasting (and more profitable) business models. With this in mind, all business owners should strive to improve their capacity for ESG reporting, paying close attention to the latest ESG policy and ESG news.

What are GHG emissions?

GHG stands for "Greenhouse Gases”, which are major contributors to climate change.

Burning fossil fuels, deforestation, and other human activities are responsible for releasing large amounts of GHG emissions (including carbon dioxide or CO2, methane, and nitrous oxide) into the atmosphere. GHG emissions are important to consider when assessing a company's environmental impact. Companies emitting a large quantity of GHGs are likely to face increased regulatory scrutiny and may also be at risk of reputational damage if seen as deliberately contributing to climate change.

What is a carbon footprint?

A carbon footprint measures the GHG emissions released directly and indirectly by an individual, organization, product, or event. 

Carbon footprints are typically measured in units of carbon dioxide equivalent (CO2e) and include emissions from sources such as electricity and heat production, transportation, agriculture, and waste disposal.

What does it mean to be net zero? Or carbon neutral?

In short, net zero encompasses all GHG emissions, whereas carbon neutral only focuses on CO2 emissions.

Net zero refers to the balance of all GHG emissions, offsetting an equivalent amount of these gases by removing them from our atmosphere. On the other hand, carbon neutrality generally only refers to offsetting CO2 emissions, the most prevalent greenhouse gas emitted by human activities. Similarly, a carbon negative organization removes more CO2 from the atmosphere than they release from their annual operations.

What is a “Scope”?

In the context of GHG emissions, a "scope" refers to different categories of GHG sources, which are defined by the Greenhouse Gas Protocol (GHGP).

Scope 1, 2, and 3 emissions are at the forefront of the corporate initiatives for becoming a net zero or carbon neutral business. Understanding these categories is critical for measuring a company's carbon footprint and setting emission reduction targets. Companies can use the three scopes to identify areas where they should reduce emissions and measure progress toward their decarbonization goals.

  • Scope 1 emissions: direct emissions from sources owned or controlled by the reporting entity, such as emissions from fuel combustion in boilers or vehicles.
  • Scope 2 emissions: indirect emissions from the consumption of purchased electricity, heat, or steam generated by someone else, but used by the reporting entity.
  • Scope 3 emissions: all other indirect emissions in a company's value chain, including emissions from purchased goods and services, transportation of goods, employee commuting, and waste disposal.

It’s worth noting that ESG investors and other stakeholders also use scopes to evaluate a company's environmental impact and sustainability practices.

Five steps to decarbonize any business

Once again, decarbonization refers to reducing a carbon footprint or eliminating the use of fossil fuels in day-to-day business operations.

In summary, decarbonization involves reducing GHG emissions and transitioning to low-carbon energy sources that aren’t closely linked to the use of fossil fuels. Getting started can be daunting, so we’ve listed out a few key steps for taking action; here’s how any organization can identify and reduce GHG emissions:

  1. Strategies, Goals, and Teams: Identify what you hope to accomplish. Determining whether your end goal is to appease shareholders, attract new environmentally conscious customers, or benefit the planet will influence your decision-making. Gathering a team and ensuring everyone is on the same page will save you hours in the long run as you drive these initiatives forward.

  2. Operations Audit: Review your day-to-day operations and calculate your scope 1, 2, and 3 emissions. This is an ideal time to do competitive research and determine: How does your company fair within its specific industry? What are the industry leaders doing differently? How difficult would it be to mimic or surpass them?

  3. Energy Efficiency: Pick the low hanging fruit. Improving energy efficiency is one of the most effective ways to reduce a carbon footprint. This can include: upgrading to more efficient lighting or other office equipment, installing HVAC systems, and implementing energy-saving practices like turning off lights and machinery when not in use.

  4. Renewable Energy: Invest in renewable energy sources like solar to reduce your carbon emissions and move towards a more sustainable energy mix. Depending on your location and energy needs, you may be able to generate your own renewable energy or purchase renewable energy credits from a third-party provider.

  5. Carbon Offsetting: Offset emissions by funding projects that reduce or remove GHG emissions elsewhere, such as reforestation or clean energy projects. By purchasing carbon offsets, you can balance out the carbon emissions that your business produces and support the transition to a low-carbon economy.

Take your first steps today

Now is the time to start working with a trusted partner and participate in accelerating this world-changing shift toward decarbonization. By taking a strategic and proactive approach to decarbonization, you can position your business as a leader in sustainability and meet the growing expectations of investors, clients, and employees. 

The Pivot team is here to help companies that wish to decarbonize their day-to-day operations or even achieve net zero emissions. Pivot has a reputation as a company that values not just profit, but also people and the planet. Contact the team at Pivot Energy, and we’ll help you get started on your decarbonization journey today.


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