Set target
Assess your target’s feasibility
Net zero targets and emission trajectories should be developed in conjunction with bottom-up decarbonization plans that suggest how these targets could be achieved. The following are steps companies typically take to develop detailed abatement plans. These steps should be followed, to varying degrees depending on available resources, in order to equip teams with a roadmap for achieving net zero targets.
Identifiable abatement initiatives to achieve long-term targets may not currently be available for certain industries as the technologies have not yet emerged. The analyses below are most useful in developing plans for short-term targets, but may also be useful for directional insights for long-term targets. For comprehensive short-term plans, companies run these analyses separately for each emission scope category (e.g. Scope 1, 2, upstream-3, and downstream-3), as the baseline data source, identification of actions, and prioritization may be quite different between them.
Guiding principles for assessing the feasibility of your targets:
The above analysis can be strengthened by engaging interdisciplinary perspectives from across business units and looking for opportunities to gain new market advantages through the transition:
Interdisciplinary analysis: The above analysis should be conducted with interdisciplinary or cross-functional teams that have buy-in to the net zero ambition, to ensure the analysis reflects the balance of ambition and practicality
In-search of upside: Opportunities created in pursuing net zero targets should not be overlooked during internal validation of targets. While the operational and financial challenges of a net zero transition can be daunting, companies that embrace their ambition and look for opportunities on their journey to net zero can gain new advantages (e.g. energy savings, new customers, green innovation)
Tie back to vision of business: The team tasked with developing a decarbonization roadmap should have close tie-ins with the broader organization's strategy team. Prioritization of specific abatement initiatives need to align with your core business strategy to account for risks and opportunities appropriately through the net zero transition
Process for assessing your target’s feasibility
Stage | Example Analyses |
|---|---|
Impact and influence mapping | Define abatement opportunities based on impact and influence Analyze data from company-wide emissions inventory of Scope 1, 2 and 3 emissions to understand what aspects of the business are the highest emitters (e.g. energy supply, a specific input material, heating). Conduct a second assessment with experts knowledgeable of the high emission areas to identify where your company can influence emissions. Evaluating emission sources by impact and influence will help your team identify actionable focus areas. Common challenges and solutions: Lack of data availability Delays in data collection Incomplete data sets Few opportunities for influence Case study: How an OEM identified battery procurement as a priority upstream Scope 3 abatement area based on baseline emission data and influence analysis |
Lever identification | Source potential levers for important abatement areas: Within the high impact and influence emission categories, identify levers that could reduce emissions through workshops with relevant departments (e.g. procurement, product development, sustainability), expert interviews, internal and external benchmarking, desk review of ops data, and by accessing the Climate Action Library. Levers can also be prioritized by abatement potential, cost impact, and ease of implementation. Common challenges and solutions: Reluctance to challenge current operations Collecting sufficient insights for decision making Scope 3 lever identification Case study: How a mining company applied value chain frameworks to SME interviews and qualitative benchmarking to source downstream Scope 3 emission levers |
Initiative prioritization | Prioritize initiatives using abatement, cost, and other select considerations Assess the identified levers based on abatement potential and cost. A marginal abatement cost curve (MACC) is a common analysis that helps to visualize initiatives based on abatement costs and emission reduction potential. If other considerations have been identified by management (e.g. capital expenditure limitations, growth emphasis), these can also be used as screening criteria. Common challenges and solutions: Unclear prioritization criteria Vagueness in lever definitions Availability of data on levers Case study: How a chemicals company used a marginal abatement cost curve (MACC) to identify priority initiatives to pursue based on total cost of ownership and abatement potential |
Operational considerations and planning | Develop a detailed operational understanding and proposal for implementation For the top levers as identified by the prioritization analysis, specific initiatives must be developed with their respective operational teams. Through more detailed consideration of initiatives will result in specific sequencing considerations, and potential de-prioritization of initiatives due to previously unconsidered constraints. Departments most involved in the identified lever need to be an active stakeholder in this process to ensure plans address operational constraints and achieve support. Common challenges and solutions: Getting buy-in from relevant teams Imagining different new ways of operating Prioritization of non-traditional business drivers Case study: How an industrial supplier translated levers to an actionable implementation plans using input from impacted teams on the shop floor |
Decision making | Management approval of decarbonization plan Detailed operational inputs are combined into a comprehensive roadmap showing overall abatement potential over time relative to defined targets, cost and investment implications, and other operational considerations (e.g. risks). If there are significant trade-offs between initiatives, scenario analyses can help to present management with clear decisions. Analysis should be sufficiently detailed (e.g., sequencing of initiatives, stakeholders involved) that management has confidence to approve decarbonization plan. Common challenges and solutions: Getting buy-in from relevant teams Imagining different new ways of operating Prioritization of non-traditional business drivers Case study: A construction materials distributor assessed compiled analyses to select abatement activities that were most aligned with broader organizational priorities |