Well done! Your organization has made significant progress along the decarbonization journey. You’ve demonstrated dedication by consistently collecting and analyzing emissions data, expanding reduction targets to include scope 3, and refining energy and decarbonization strategies, while transparently reporting on your progress. Furthermore, you’ve been actively shaping your decarbonization efforts through stakeholder engagement and strategic collaborations.
You’ve benchmarked against industry peers, and your efforts are commendable, but you aspire to achieve even more and become a true leader in decarbonization. As you continue toward your decarbonization targets, optimizing your roadmap becomes essential to bridge any existing gaps.
To guide you further on this path, here are some critical actions and solutions for your organization to consider at this advanced stage of the decarbonization journey:
STEP 1: Lead by example
Continuously demonstrate exemplary decarbonization practices. Show your commitment to decarbonization by setting ambitious emissions reduction targets and adopting sustainable energy solutions that significantly reduce your carbon footprint.
By transparently reporting on your progress and engaging stakeholders to showcase your sustainability efforts, your organization can foster a culture of sustainability within and beyond its boundaries. As a result, you’ll serve as a role model for other organizations in your industry and have the potential to catalyze industry-wide change.
STEP 2: Invest in research and development
Invest in research and development to drive innovation, develop sustainable technologies, and implement sustainable practices that can help to significantly reduce your carbon footprint.
Research and development encourage the discovery of cutting-edge breakthrough technologies and processes, enabling your organization to stay ahead of your competition but also regulatory changes and consumer demands for sustainable products. In this way, you can position your organization as an industry leader and meaningfully contribute to the global efforts to combat climate change.
STEP 3: Provide transparent communication and reporting
Your sustainability and climate related reporting should be comprehensive, accurate, and transparent. It should include detailed information about your GHG emissions across your entire value chain, covering both scope 1 and scope 2 emissions, as well as emissions from your entire value chain – scope 3.
Ensure that your communications around science-based targets and action taken to meet them are clear. Communicate your achievements, challenges, and future goals to engage and inspire your stakeholders and peers.
STEP 4: Drive industry collaboration
Engage with other sustainability leaders to share best practices, exchange knowledge, and drive collective action to accelerate progress toward larger scale decarbonization.
Over the last few years, groups of prominent organizations from various sectors have formed alliances, pooling resources and expertise to collectively advocate for policy changes, invest in clean technologies, and drive sustainable practices across their supply chains. Examples of such collaborations include the RE100 initiative, which brings together businesses committed to 100% renewable electricity and the 1.5°C Supply Chain Leaders Group, focused on driving climate action throughout global supply chains.
STEP 5: Work with suppliers to decarbonize your supply chain
Supply chain emissions can be effectively addressed only by working together with your key suppliers. Through collaborative initiatives, you can learn together and help one another to set targets, exchange emissions reduction and sustainability best practices, monitor progress, and create incentives for action. In addition, collaborations can demonstrate your organization’s decarbonization leadership role and highlight advantages to suppliers and the industry at large.
Another way to help suppliers with emissions reductions while reducing your own scope 3 emissions is through renewable energy procurement. Your organization can jointly procure renewable energy with your suppliers through an aggregation. Collectively purchasing renewables allows organizations with modest electricity demand to benefit from the terms and pricing associated with purchasing renewable electricity at scale.
You can also incentivize your suppliers to become more sustainable by changing your procurement strategies. For instance, Enel’s suppler selection criteria includes the use of renewable energy, sustainable supply chain certification, and application of circularity principles.
STEP 6: Influence policy through advocacy
Leverage your influence as a decarbonization leader by actively engaging with policymakers, industry associations, and advocacy groups. This way you can shape legislation encouraging carbon reduction practices, incentivizing clean technologies, and penalizing excessive GHG emissions.
Here is how you can do it:
- Collaborate with other like-minded organizations – form powerful coalitions that amplify your collective voices, making a broader impact on policy decisions.
- Work with think tanks and research institutions focused on climate and sustainability issues.
- Directly engage with organizations and policymakers at the global, federal, state, and municipal levels to provide expert insights and advocate for policy changes.
STEP 7: Continue to tackle your energy infrastructure holistically to optimize your portfolio
At this stage, you have comprehensively addressed your energy infrastructure and embedded a holistic strategy to accelerate your organization’s targets. However, the energy transition is a continuous process that constantly requires re-calibration due to the volatility of the energy landscape, growing complexity, new solutions coming online, new incentives, and other factors.
It’s important that you work with your energy partner to ensure you are continually filling gaps in your energy portfolio and optimizing your infrastructure.
As your organization is seeking to optimize your GHG emissions reductions and lead on decarbonization, we recommend you consider holistically the following integrated portfolio of energy and decarbonization solutions.
SOLUTION: Demand response (DR)
Earn payments for reducing energy consumption in times of electric grid stress through demand response programs and support a more flexible and sustainable energy grid. During supply-demand imbalances on the electric grid, DR programs act as a cleaner alternative to fossil fuel peaker plants, preventing blackouts. By agreeing to curtail electricity consumption when required, participants earn payments while ensuring grid reliability. Your organization can spend the payments you earn from DR on renewable energy initiatives in your energy and decarbonization portfolio.
SOLUTION: On-site distributed energy resources (DERs), including solar and battery storage
On-site solar and battery storage is a great way to leverage your facility’s infrastructure to generate and store on-site renewable energy, reducing energy costs, enhancing corporate sustainability, and boosting resilience – and integrating the two technologies amplifies the benefits of each solution.
Solar generation is a great way to decarbonize operations and transition to renewables instead of relying on grid power. However, solar generation is limited at night – and sometimes the system generates more energy than what is consumed on-site, wasting valuable renewables. And battery storage, when charged from the grid, doesn’t help with decarbonization.
The magic happens when these technologies are paired, allowing flexible usage of renewable energy. Battery assets can charge from solar power, discharging stored energy during periods of low solar generation.
SOLUTION: Unbundled Renewable Energy Credits (RECs)
Your organization can purchase unbundled RECs to match your electricity consumption from any source to claim a renewable energy, or green power, product. According to the U.S. Environmental Production Agency, a REC is a market-based instrument that represents the environmental and other non-power attributes of one megawatt-hour of renewable electricity that was generated and delivered to the electric grid. While bundled RECs come as a package deal together with the physical renewable electricity that they represent, unbundled RECs can be separated from the electricity they represent and can be bought and sold independently.
SOLUTION: Off-site renewable energy solutions, including VPPAs
If you are a large organization with geographically dispersed facilities looking to meet your clean electricity needs and decarbonize at scale more easily than with on-site generation, consider a virtual power purchase agreement (VPPA).
A VPPA is a contract between an energy buyer (e.g., your organization) and a renewable energy project developer (e.g., Enel North America). Unlike a physical power purchase agreement (PPA), a VPPA does not deliver electricity to your organization directly – you power your facilities just the way you did before. However, your organization receives the environmental benefits of a large-scale off-site renewable energy project (i.e., renewable energy certificates or RECs), while electricity generated by the project flows to the grid.
VPPAs allow energy buyers to meet their decarbonization targets, often with just one contract, while offering long-term pricing stability over the course of the contract, which typically spans 12 to 15 years. By becoming an offtaker on a new renewable energy project, your organization can claim additionality and implement projects in a region and grid where it will have a meaningful impact.
While VPPAs may require significant effort to execute and involve financial risk, choosing the right partner can make renewable energy purchases less complicated. Experienced renewable energy partners, like Enel, can help you customize the contract structure to suit your needs. In addition, our in-house trading desk is here to assist in effectively managing your financial risk.
SOLUTION: Renewable energy aggregations
As renewable energy procurement has evolved in the past few years, organizations have begun to work closely with their suppliers to identify best practices, raise standards for procurement, and even jointly procure renewable energy. Since organizations with smaller electricity demands can collaborate and use their collective buying power to purchase renewable electricity at scale, you can serve as anchor buyer for such an aggregation. While you will be negotiating your agreements collectively, each organization will sign their own VPPA.
SOLUTION: Green retail energy supply
If your organization is smaller, has one or a few facilities in the same geographic location, and has a low appetite for long-term commitments like VPPAs, you can power your operations with green retail energy supply. Partnering with a renewable energy company that offers electricity directly from their own renewable energy projects, like Enel, allows your organization to meet your decarbonization targets. Your organization will also be supporting your local economy and community if your green retail partner actively invests in local communities the way Enel does.
Green retail options and tariffs are usually available in deregulated energy markets, like ERCOT or PJM. They allow you to source renewable energy directly from a utility or supplier and generally are on-bill options. As a result, they are easy to manage.
SOLUTION: Maximizing community impact along with renewable energy
While clean energy procurement has become common for large organizations, the focus on responsible renewables or project co-benefits is less widespread. Collaborating with a renewable energy partner that delivers sustainability projects in local communities offers an additional advantage for your organization’s decarbonization and sustainability goals.
Enel is a notable example. Our customers can enhance their sustainability commitment through our Creating Shared Value programs that focus on a wide range of local community needs, including energy equity, environmental sustainability, health, education, and job training. Leveraging our unique expertise and connections, these programs enable your organization to support the local economy and empower communities near our renewable energy projects. In addition, you can co-develop a new project aligned with your strategy, a community of interest, and your sustainability goals with the Enel team – generating added value, unlocking new opportunities, and enhancing your organization’s reputation.
SOLUTION: Electric vehicle (EV) charging
Is your organization considering electrifying its fleet? Your peers are already making the switch, and it’s time for you to do the same. However, installing reliable EV infrastructure has energy impacts that should be considered. To manage the added load from charging, include on-site energy flexibility solutions like solar and battery storage. Combining these solutions enables utility bill savings, avoids interconnection costs, supports environmental goals, and ensures energy resilience during system outages.
Accelerate your decarbonization journey with a trusted energy partner
Your organization has already made significant strides in the decarbonization journey. However, if you’d like to lead on decarbonization, your organization should be proactive in recognizing the remaining gaps and taking the necessary steps to stay ahead of the curve.
At Enel North America, we have the right sustainability track record, experience, and expertise to work across solutions to integrate your strategy in the most effective yet simple way possible. As a turnkey provider of holistic energy solutions, we can help you accelerate your energy goals with a comprehensive energy strategy and roadmap to take your strategy to the next level. Take a look at our guide, Decarbonization navigator: a toolkit for organizations, to learn more about the specific steps required to jump-start your organization’s decarbonization journey. Contact us today to discover how we can guide you on that journey.