If companies want to combat climate change, they need to curb their carbon emissions. While there is no one-size-fits-all approach, there are best practices that can help leaders develop carbon management strategies.
Without a doubt, companies need to develop a carbon management strategy. “Decarbonization is a hot topic for every industry right now,” said Kate Hite, a Washington, D.C.-based partner at Bain who advises companies on sustainable energy and policy issues. Masu.
Mr. Haidt participated in a panel discussion at the 2023 MIT Sustainability Summit entitled “Advancing Corporate Action: What is an Effective Carbon Management Strategy?” with the directors of Microsoft and Ceres. The panel was moderated bySenior Lecturer and Director of the MIT Sloan Sustainability Initiative.
Here are three best practices for business leaders to consider when developing a carbon management strategy.
1. Reduce emissions within our infrastructure and supply chain.
Even for a company as big as Microsoft, “reducing emissions is very difficult,” said Philip Goodman, director of the tech giant's carbon removal portfolio.
Microsoft has pledged to become carbon negative by 2030, reducing its own emissions by 50% and eliminating the rest by purchasing “high-quality carbon removal products from a variety of providers in the market.” Goodman said.
“We have a small team working on carbon removal, but we have a large team spread across the company that thinks about reducing emissions every day through our direct operations and our supply chain,” Goodman said. Ta.
In 2012, Microsoft introduced an internal carbon tax to hold its business units financially responsible for their carbon emissions. The fee will go toward Microsoft's carbon-neutral purchases, giving business units financial incentives to reduce emissions.
“What we're trying to do is create incentives for different business groups, whether they're developing Xbox or hosting Azure cloud services that power a lot of cloud computing around the world. That's true,” Goodman said. “So we're going to charge based on the cost savings and then leverage that money on the other side. But we want to deploy those into things that move the needle.”
According to the policy, the collected fees must be used within the same year. Unfortunately, “there isn't enough quality removal out there to use up all the carbon fees that the entire team has collected,” Goodman said, adding that Microsoft expects the market to converge in 2030 and more options will be available. He added that he expected that.
2. Invest in carbon offsets.
Baines-Heidt said companies first and foremost need to decarbonize their operations, sourcing renewable energy and pushing themselves “to the limit as much as possible” to “electrify as much as possible”. “We need to take on the challenge,” he said.
But carbon offsets should also be part of your strategy. Mr Hite said there was also “pure removal” such as planting new trees and direct air intake, alongside other equally valuable activities such as avoiding deforestation.
Hite said he expects to see an increase in nature-based solutions over the next five to 10 years, and expects the means to price and evaluate them to emerge so companies can contribute to that.
Microsoft buys carbon credits from CarbonCapture, a startup that operates a direct air capture plant in Wyoming, among other offset options. The plant uses technology that filters carbon from the air and stores it underground. The technology is still in its infancy, with about 18 direct air recovery plants in operation around the world, according to the International Energy Agency.
Offsets are not without controversy. Some argue that offsets could make climate change even worse if they are based on questionable assumptions. It is therefore important for businesses and consumers to ensure that the offsets they purchase actually reduce emissions or remove carbon.
3. Support policy changes to build a trusted ecosystem for decarbonization.
Goodman said Microsoft works with various standards bodies, such as the Voluntary Carbon Market Integrity Council and the Voluntary Carbon Market Integrity Initiative, to stay on top of rules and regulations.
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“We are very active in all of these agencies and, frankly, trying to set common third-party standards for what quality removal is. , we can take all of this great work and put it to the most meaningful use for our planet.'' Goodman said.
Tracy Cameron, director of corporate climate change at Ceres, said the recently passed infrastructure bill (funding four direct air capture hubs) and the Anti-Inflation Act have resulted in fewer carbon capture and storage facilities in the United States. He said there was a “huge amount of money” flowing through the country. , encourage the use of carbon capture and storage technologies.
That said, Prime Minister Cameron has advised companies to proceed at a slow and steady pace, citing problems encountered by Australia's Chevron carbon capture project. “We need to be very careful about doing it wisely and thinking about it before we do it at scale,” she says.
Jay concluded by emphasizing, and Goodman agreed, that voluntary markets are a way to prepare serious carbon pricing practices and business models.
“We've been talking to countless companies about the process of setting up a carbon tax. We think it's a good interim measure,” Goodman said. “I think everything we’re doing here is an interim measure and we’re trying to act where we want policy institutions to play a bigger role.
Read next: How to choose carbon offsets that actually reduce emissions
