In April, the Intergovernmental Panel on Climate Change (IPCC) issued the third part of its Sixth Assessment Report, stating we must focus on carbon minimization and the transition from fossil fuels to renewables. The United Nations body warns that climate change is accelerating much faster, and climate impacts and their corresponding social, structural and economic implications are being realized earlier than scientists had expected.

Furthermore, a 2021 CDP report shows that significant gaps exist in the disclosures of companies’ climate strategies. Just over a third of the companies reviewed are considered to have credible emissions reduction targets. Of the more than 13,100 organizations that disclosed to CDP, fewer than one-third (4,002) reported developing a low-carbon transition plan.

So, how can companies develop a profound climate strategy to achieve deep decarbonization?

To incorporate a climate strategy by setting and achieving science-based decarbonization targets and then transforming and harmonizing the business strategy accordingly, companies can follow these steps:

  1. Develop a carbon inventory
    Set up an annual, iterative, deepening emissions quantification process.
    Implement a software-based, comparable, manageable carbon accounting program.
  2. Assess carbon reduction potentials
    Evaluate carbon hotspots along the value chain.
    Analyze mitigation measures for direct and indirect emissions.
  3. Develop a decarbonization roadmap and set science-based targets
    Develop climate scenarios and a decarbonization roadmap.
    Confirm the decarbonization trajectory through standards.
  4. Harmonize your holistic climate strategy with your business strategy, and manage climate-related risks and opportunities 
    Create a business case for climate strategy.
    Understand the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
    Prepare governance and KPIs.
  5. Implement a climate strategy through ecodesign and a consideration of planetary boundaries 
    Introduce an internal carbon price.
    Use ecodesign for sustainable product innovation.
    Consider other environmental impacts to avoid burden shifting.
  6. Monitor progress through a carbon management governance system 
    Establish an iterative review of climate ambition and carbon reduction potential.
    Disclose progress annually.

Read the full article about climate strategy by Stefan Premer at GreenBiz.