Enel X’s tips on creating a sustainable energy strategy: Part 1

Sustainable Development Goals are becoming important in the urge to combat climate change.

In this four-part article, Enel X North America, Inc. offers its expert advice for organizations on how to make the business case for a sustainable energy strategy, align stakeholders, and set actionable emissions targets. This first part introduces the topic and summarizes vision and targets.

Why sustainability programs need an integrated energy strategy

Sustainability trends have recently made major headlines as corporations continue to announce progress and plans to combat climate change. Businesses across all sectors are setting goals of zero net emissions, committing to 100 per cent renewable energy, reducing water and waste impacts, and even addressing indirect emissions within their supply chains. But the movement goes well beyond these headlines—as the urgency of combating the climate crisis becomes clearer, businesses of all sizes are realizing the benefits of a climate action plan.

The importance of climate action at every level of society has become clear. In 2015, the United Nations General Assembly created a collection of Sustainable Development Goals (SDGs), or the 2030 Agenda for Sustainable Development, which provides a “blueprint to achieve a better and more sustainable future for all.” It’s essential that companies take steps to reduce greenhouse gas (GHG) emissions to levels consistent with a 1.5-degree-Celsius scenario of global warming.

According to the Intergovernmental Panel on Climate Change, that means that, within the next decade, GHG emissions levels must be reduced by approximately 45 per cent relative to 2010.

As part of a project with the World Business Council for Sustainable Development (WBCSD), Enel X helped to create guidelines for an integrated energy strategy. An “integrated” strategy goes beyond a traditional energy strategy to integrate stakeholders within a company and engage with upstream and downstream stakeholders to evaluate inputs and outputs from their operations. This integration enables a strategy effective enough to reduce GHG emissions significantly while also managing costs.

This article is intended as a simple introduction to several aspects of the Integrated Energy Strategy. To help organizations blueprint a successful sustainability strategy, Enel X, a leader in energy advisory services, has prepared this guide to explain:

• The best ways to secure buy-in and set defensible GHG reduction goals
• The energy decisions that most directly impact GHG emissions
• How to leverage sustainability programs as a driver for competitive advantage

Vision and targets

With ten years remaining to meet the Global Goals, 2020 marks the start of the Decade of Action. Leading global businesses are incorporating the SDGs into their business strategy and using them as a framework for setting sustainability targets, including Climate Action (SDG13).

As the effects of climate change often rank as one of the most material risks to organizations, many have prioritized energy-supply strategies to make the biggest, fastest impact on their GHG footprint. To do so, it is critical that energy consumers integrate current and future emission levels and renewable alternatives into a meaningful reduction target.

What should your GHG targets be?

The two primary methods for calculating GHG reduction targets are absolute and intensity-based:

• Absolute targets aim to reduce total GHG emissions by a set amount, or consume a certain percentage of total energy from renewable sources. Examples include “25 per cent by 2025” or “100 per cent renewable energy.”
• Intensity targets normalize emissions to a business output, which can be anything from widgets produced to employees to revenue. Intensity—or efficiency—targets allow companies to ensure their relative emissions don’t increase with economic growth and enable like-for-like comparisons to peers.

While these frameworks serve as a good starting point, targets set this way often lack context. Organizations are encouraged to go one step further and set goals in the context of global limits to answer the question, “Are we doing our part?” The World Resources Institute’s Science-Based Targets Initiative (SBTi) helps organizations set contextual goals.

• Science-based targets require that, at minimum, companies commit to emissions levels that are “consistent with the level of decarbonization required to keep global temperature increase to well below two degrees Celsius compared to preindustrial temperatures.” The organization offers sector-based, absolute-based, and economic-based target-setting methodologies for calculating an acceptable level of emissions as determined by climate science.

Other resource reduction commitments include waste, water, and forestry. Organizations will find most success when they pick a framework and set goals that align with their broader business objectives.

Coming in Part 2: Energy-strategy governance and data collection/management.

To learn more about how to create a sustainable energy strategy, click here.

To learn more, contact Enel X.

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