Setting ambitious corporate climate goals is great because it forces companies to aim high and initiate innovation. However, they are seldom easy to reach. A good goal should scare you a little but excite you a lot. As companies look for affordable ways to implement their climate promises, it’s essential to take a holistic approach and measure the net impact of planned actions.
Companies can start with these three steps to help their climate goals become reality:
• Look at the life cycle.
• Invest in both current and future solutions.
• Measure your carbon handprint along with your carbon footprint.
WIDEN YOUR HORIZON
The importance of life cycle analysis is reflected in one simple truth: The climate doesn’t care where emissions come from. For companies setting climate goals, especially goals focused on transportation, this is a critically important point to remember.
Narrowly focusing on what comes out of the tailpipe willfully ignores the reality that emissions and pollution happen elsewhere.
That’s why businesses must use life cycle analysis to define climate goals. The good news is that much of the hard work in this space has been done. For example, California’s Low Carbon Fuel Standard (LCFS), which has prevented more than 50 million tons of carbon pollution from entering the atmosphere over the past decade, uses life cycle analysis to determine a fuel’s carbon intensity.
The LCFS paints a clear picture for businesses operating in California, showing which fuel will deliver the optimal climate benefits. It’s the same picture any corporate sustainability team can paint for senior leaders.
BE STUBBORN ON VISION, FLEXIBLE ON IMPLEMENTATION
In addition to focusing on developing and highlighting future solutions, it is critical to take concrete action now. Pairing the research and development of tomorrow’s solutions with the accelerated use of today’s solutions is a must. Renewable liquid fuels, for example, can provide an immediate, lasting reduction in greenhouse gas emissions and pollution in vehicles already in service.
Electrification may solve part of the problem, but it takes time and may never become viable for hard-to-decarbonize modes of transportation. That’s why all available solutions must be put into use now.
‘YOU GET WHAT YOU MEASURE’ STILL HOLDS TRUE
For most companies, climate commitments tend to focus on reducing their carbon footprint. This allows a company to measure—and be accountable for—what it controls. It can be fairly simple in some sectors: Pinpoint the biggest sources of greenhouse gas emissions across the value chain and then reduce those emissions.
While this is important, it’s too narrow. What about the emissions from a company’s products or services used by its customers?
Carbon handprint is a customer-centric method of measuring climate emissions. It indicates the benefits (emission savings) for the customer when using a company’s products and services. While you want a small footprint, you want a big handprint. For example, a bold carbon handprint goal could be to reduce customers’ greenhouse gas emissions by 20 million tons annually by 2030.
A company measuring its carbon handprint can develop new business models and offerings, like offering renewable diesel instead of fossil diesel. Over its life cycle, renewable diesel has markedly lower greenhouse gas emissions than fossil diesel. As a result, the customer’s carbon footprint goes down.
Including carbon handprint in corporate climate goals is a commitment to redefining value. It signals that a company is placing a premium on offering goods and services designed to create a healthier planet for future generations.
In the fight against climate change, all solutions are needed. Making climate commitments is great, but the benefits only come when corporations show determination in their implementation.
Jeremy Baines is president of Neste US, a leading producer of renewable fuels refined from waste and residue materials.