Setting Realistic Energy Goals in Your Sustainability Plan
How to plan well for a changing energy future
Originally published on NRG Energy Insights
The case for including energy goals in a sustainability plan is clear. The more challenging matter is figuring out how to make the goals realistic to avoid over-promising and under-delivering.
If your business is considering a sustainability plan, you’ve likely heard about “net-zero” carbon emissions. The Biden administration hopes to achieve a net-zero U.S. economy by 2050, and many businesses are establishing their own net-zero carbon commitments, mostly in keeping with the Science Based Target initiative (SBTi).
Net-zero emissions might be the right goal for your business, but true zero means eliminating what are known as Scope 1, Scope 2, and Scope 3 emissions. Scope 1 emissions are those that come directly from your operations. An industrial manufacturer may have significant Scope 1 emissions while a chain of retail stores may have almost none.
Scope 2 emissions are those created by the production of electricity, heating and cooling that is purchased by a company, while Scope 3 are indirect emissions that occur along a company’s value chain, either upstream or downstream of it. Essentially every business starting a sustainability journey needs to cut these types of emissions.
The nature of your operation should inform the scale and timing of your sustainable energy goals. An industrial manufacturer might have to wait for new technology before it can cut its Scope 1 emissions, while a chain of retail stores may simply need to procure renewable electricity to eliminate its Scope 1 and 2 emissions.
Calculation comes first
It’s impossible to set realistic sustainable energy goals without a detailed understanding of how your operations use energy. Yet, businesses often do not have that knowledge at their disposal.
We strongly suggest starting with an audit across locations and equipment which will allow you to calculate your energy use at a granular level. And don’t stop there. Set up a system for continued measurement so that this process of addressing carbon mitigation efforts is replicable from one reporting period to the next. This will give you the information needed to create a plan to reduce emissions and track progress.
Granted, this isn’t always an easy task to do on your own. Many businesses benefit from partnering with a trusted energy advisor who can aggregate their energy use and calculate the emissions it creates and then set up a system for future tracking.
Now or later
Next, determine timeframes to reach milestones and goals that are in keeping with the best practices for collective action to mitigate emissions. This is perhaps the most important step to create a realistic sustainability plan.
It might seem harmless — or even motivating — to set aggressive sustainable energy goals, but if they are unrealistic and you fall short, you risk losing the trust of customers, employees, and investors. However, setting goals that are not ambitious enough can also result in reputational risk.
Getting the timing right starts with assessing what actions your business can take in the short term to reduce energy-related emissions and what actions are reasonable to pursue later.
In the near term, many businesses have opportunities to reduce energy use through energy efficiency and weatherization projects. Flexible demand is another near-term opportunity, allowing companies to tap the full potential of smart appliances to control when and where they use energy to reduce energy demand or shift it, such as to peak daylight hours to maximize the use of solar power.
Cost-saving opportunities from load shifting and Demand Response programs are available in certain regions and states. Many companies look to renewable energy credits (RECs) or carbon offsets as a simple way to reduce reportable emissions from operations, quickly and affordably. These measures can be part of an effective start to a sustainable energy plan.
In the longer term, businesses should consider new technologies on the horizon and how the cost of existing technologies is expected to change.
For example, a company with a fleet of delivery vehicles might decide fleet electrification is a desirable path to lower emissions. Should they start buying that electric fleet today or wait five years? To make the best decision, it’s important to understand how the market for electric vehicles will change, and how that fits with other actions your business could prioritize first.
“Do your own research” is a popular phrase these days, and any smart business does just that. But sometimes a business needs a trusted partner to guide the research process.
Find a partner with sustainability planning knowledge and experience
As a large energy company with a track record of success, NRG has the experience and expertise to evaluate energy opportunities for a wide range of businesses. And as an early leader in sustainable energy, we bring deep insights about emerging technologies and market developments that will help you see into the uncertain future with more clarity.
Setting sustainable energy goals as part of a sustainability plan is complex. A trusted partner like NRG can help your business understand its current situation, what can be done, and when it can be done so that your plan hits the right marks.
