My article last month about energy transition plans was written during the Russian invasion of Ukraine, as energy prices skyrocketed in the U.S. and worldwide and after the Feb. 28 release of the U.N.’s Intergovernmental Panel on Climate Change Sixth Assessment Report, “Climate Change 2022: Impacts, Adaptation and Vulnerability.” Now, my thoughts are again colored by recent events, including the March 21 announcement by the Securities and Exchange Commission proposing rule changes to require climate-related disclosures, the March 24 Bloomberg interview with Candace Browning, Bank of America securities head of global research, on net zero and corporations, and the April 4 “Summary for Policymakers” of the IPCC Working Group III report, “Climate Change 2022: Mitigation of Climate Change.”
Based on events from the past two months, it is evident that momentum is increasing for companies, public agencies, governments and others to begin their energy transition planning. In her Bloomberg interview, Browning said, “In 2019, about 16% of the world’s GDP, you know, by country, had committed to some sort of net zero plan. And today, just three years later, that number is 90%. And, you know, this whole thing was really led initially by policy makers, right? But now, what’s happened is all these other groups have jumped in … and everybody wants to get on this wagon.” Browning goes on to say, “The first big take away was that it, you know, it’s a movement, and it’s going to happen. And I think, actually, that the events between Russia and Ukraine are actually going to further accelerate this because Europe, you know, has to get off its dependency on hydrocarbons.”
How do businesses, schools, hospitals or governments join the movement? We have advised our customers that there are steps to follow when developing their energy transition plans.
- Benchmark your facilities and processes.
- Gain an understanding of what information you have and how it would correspond to your short-, medium- and long-term plans.
- Gather data regarding your existing equipment and processes, utilities and metrics.
- Review the steps you have implemented and your plans (including renewable energy) and determine how those steps will affect your energy use and your Scope 1, Scope 2 and Scope 3 emissions.
- Evaluate best practices and latest technologies.
- Survey what is being done by leaders in your respective areas (and in other areas of the country), then develop an understanding of the strategies that are the most applicable to what you are doing.
- Identify and evaluate potential opportunities for energy efficiency, renewable energy and sustainability that will help you reach your targets.
- Identify potential achievable goals for energy, emission, etc.
- Use the baseline information gathered in Step 1 and quantify existing conditions and efficiencies to benchmark yourself against your peer group, using nationally and internationally recognized metrics.
- Determine the various levels of potential savings and fiscal impact.
- Establish your conservation goals.
- Prioritize and rank the potential opportunities identified earlier, then establish achievable and “stretch” goals for energy, fuel, operation savings and emissions.
- Determine what infrastructure (e.g., renewable energy sources, storage, smart grid, etc.) is needed to achieve your goals.
- Coordinate plans with the local utility to identify rebates and plan infrastructure improvements needed to achieve your goals.
- Develop a coordinated strategy to determine the actions required to achieve your goals. This includes:
- a comprehensive roadmap for achieving your goals
- a timeline for achieving your goals
- Establish a mechanism to verify and report the benefits of the measures you have implemented. Also pursue:
- ongoing measurement and verification
- a dashboard to report your results for stakeholder and educational engagement
Regarding achieving net zero, Browning said that in Bank of America’s survey, “What we found is that of 3,400 companies, that 11% of them globally said they’re going to get there by 2030. That’s just eight years away. That number quadruples by the time 2040, and 41% of the companies said that they would be there.”
Have you started the process? As the title of the Intergovernmental Panel on Climate Change’s April 4 summary says: “The Evidence Is Clear: The Time for Action is Now. We Can Halve Emissions by 2030.”
Start your energy transition plan today by talking to Bill Bradford — contact him at bbradford@hanson-inc.com.