For organizations, carbon reduction refers to the efforts made by businesses, companies, and other institutions to reduce their carbon footprint. It involves identifying and implementing strategies and practices that lead to a decrease in greenhouse gas emissions emitted as a result of their operations and activities.
Carbon reduction for organizations not only contributes to environmental sustainability but also presents opportunities for cost savings, improved brand reputation, and enhanced competitiveness in a world transitioning to a low-carbon economy.
As an example of carbon reduction - a manufacturing company may decide to install solar panels on its facilities to generate a portion or all of its energy needs. By shifting from fossil fuel-based electricity to renewable solar energy, the company reduces its reliance on carbon-intensive power sources, effectively reducing its carbon footprint.
This action decreases both the emissions associated with the company's operation, and its consequential greenhouse gas contribution to emissions hailing from the energy sector.
Implementing effective methods of carbon reduction is steadily transitioning from an ethical decision, to a legal enforcement - as regulations around carbon reporting become increasingly stringent.
The methods of carbon reduction will vary greatly depending on the size of the organization, and the regulations applied to it. A first step in carbon reduction is conducting a carbon footprint assessment, so an organization can determine the greenhouse gas emissions they generated. After an assessment like this, here are some examples of steps that can be taken towards carbon reduction:
Some companies choose to offset their emissions via carbon offset projects/carbon credits,, but in carbon accounting this isn't recognised as a carbon reduction initiative and will not change the footprint of the organization.
For organizations looking to reduce their carbon output, there are several areas that require consideration:
In the context of carbon reduction, data granularity can be used to help quantify the impact of carbon reduction initiatives, helping organizations to report on them and demonstrate their impact. Detailed data can uncover energy and resource efficiency opportunities within an organization's operations. By analyzing granular data, organizations can identify inefficiencies, such as:
Additionally, having granular data allows you to identify areas for possible reductions - for example, one employee’s emissions being 3x higher than another doing the same job. Organizations should therefore consider how they collect data, and the level of granularity to which it is available - as this can have a direct impact on their reduction strategy.
The GHG Protocol recommends using project accounting to demonstrate impact of reduction initiatives. Project accounting refers to the accounting and reporting of greenhouse gas emissions associated with specific projects or activities. It provides a framework for organizations to measure, quantify, and report the carbon reduction, resulting from project-specific activities, such as renewable energy projects, energy efficiency investments, and behavior change initiatives.
This requires consideration, such that organizations are conscious of the specific impact in areas where the activity data collected for general organizational reporting is not granular enough to show the reductions. Let’s take the example of providing driver training for improved fuel efficiency, where data is collected on the total distance driven, and the standard emissions factor per kilometer is applied. In this case, one would not see the benefits associated with more efficient driving. On the positive side, one can tell the ‘story’ of the emissions saved, but those savings are not quantified in official carbon accounts because a different methodology for that calculation has been used.
Shifting boundaries refer to changes in the geographical or organizational boundaries used for measuring and reporting carbon emissions. These changes can make carbon reduction more challenging due to several reasons:
In carbon reduction strategies, organizations may need to consider the activities of others, such as when reporting on scope 3 emissions. For example, organizational boundaries may intersect with other stakeholders, such as suppliers, customers, and waste management companies. This can create inconsistencies in reducing carbon emissions, for the following reasons:
It’s highly likely that most entities that could fall just outside of an organization's boundaries (but need to be scoped in a carbon reduction strategy) will have their own waste management methods, including recycling. This can create a conundrum - for example, with another entity's recycling practices the reporting organization has less control. If you choose to use a high recycle-content in a material in your product, does this genuinely lead to a reduction in the use of virgin materials? Or, does it just mean that the recycled material is available to someone else within the economy? If so, the total quantity of virgin material used isn’t affected.
Market-based electricity emission reductions refer to the use of market mechanisms and financial incentives to encourage the reduction of greenhouse gas emissions in the electricity sector. This approach aims to create economic incentives for electricity producers and consumers to adopt cleaner and more sustainable energy sources and technologies. GHG introduced the market-based approach to electricity specifically as a result of demand from companies that chose to enter into clean energy agreements with their suppliers to source renewable electricity. The rationale behind that, is that recognition of renewable electricity contracts in carbon accountants would increase demand for companies for the renewable electricity, therefore creating incentives to increase the generation/production of renewable electricity. Several questions arise here over the additionality and effectiveness of this mechanism to bring about an overall increase in the generation of renewable electricity availability.
Avoided emissions refer to the reduction or prevention of emissions that would have occurred under a different scenario or baseline - which is where there can be a conflict when it comes to carbon reduction. Avoided emissions are really about a company's goods or services that help their customers reduce their own emissions - something that is not currently captured within the supplier's carbon footprint. An example of this is a company supplying a chemical additive to a central heating system that improves the system's efficiency, thereby reducing the energy consumption of the user. However, this reduction in energy consumption is not reflected in the carbon footprint of the manufacturer.
Minimum can help organizations to understand their existing carbon output, and create plans to mitigate climate related risks in the future. Our Emissions Data Platform seamlessly collects and processes emissions data from every corner of your organization and supply chain - no matter the format. Making it the ideal platform for emissions audits and all-round business intelligence.
Learn more about how Minimum's Emission Data Platform can help to power you all the way to Net Zero today.
In simple terms, carbon reduction for organizations involves directly reducing their greenhouse gas emissions through improved efficiencies. On the other hand, carbon offsetting refers to a trade-off where companies receive credit for supporting external projects that help decrease emissions.