As the global energy sector shifts from fossil-based systems of energy production and consumption to renewable energy sources like solar and wind power, businesses across sectors are taking steps to adapt to the energy transition. With clean hydrogen being hailed as a potential game-changer and the cost of renewables falling dramatically, many organizations are adopting formal decarbonization strategies.

Decarbonization strategies have grown in importance along with the increasing recognition that climate change poses risks to the bottom line. Mitigating climate change is about reducing the release of heat-trapping greenhouse gases into the atmosphere—emissions that are warming the planet. Decarbonization ranges from sustainable packaging and manufacturing to renewable energy choices, water recycling, materials recycling/reuse, reduced carbon emissions across the value chain, production and importation phasedown of hydrofluorocarbons (HFCs), and more.

Creating a decarbonization strategy for climate change can present several challenges due to uncertainty over future climate scenarios, complex and evolving regulations, and future technological innovations. Whether you are looking to reduce your footprint through efficiency improvements, alternative fuels, or emerging technologies, a few key guidelines can help you create a decarbonization strategy for your organization.

• • Get the most bang for your buck with a cross-functional, bottom-up approach. Bring together stakeholders from across the organization to evaluate all of the mitigation strategies that are technically feasible, then assess each based on their cost-efficiency. By looking at dollar invested per ton of greenhouse gas (GHG) reduction, you can plan your capital spending and chart a course to scale your mitigation measures.

• • Balance proven technologies with anticipated ones. Companies are often torn between the technologies and advancements that are available today, however imperfect they may be, and those not yet fully developed but considered a necessity for a sustainable future. From a strategic standpoint, companies should pursue mitigation initiatives in both buckets rather than relying too much on future innovation.

Focus on what you can do now, even if the improvement is incremental. But don’t overlook opportunities for innovation either, whether it’s collaborating with other companies or pursuing funding from the U.S. Department of Energy (DOE) to effect change. This is an area where an outside environmental consultant or partner can add value by providing insight into how companies inside and outside your industry are innovating and by identifying opportunities for outside funding.

• • Evaluate your risks. The risks of climate change include physical as well as transition risks. Physical risks are those related to the physical impacts of climate change, including acute events such as wildfires and chronic ones like rising sea levels, while transition risks include those that may be incurred due to the transition to a low carbon economy (e.g., increased costs of carbon, costs to implement low carbon technologies or strategies). Different types of risks require different tools; understanding the risk your business is exposed to is a critical input into decision-making.

• • Take a holistic view. If you’re looking to electrify more of your equipment to reduce your reliance on fossil fuels, have you given adequate consideration to the reliability of your local grid? Ensure that you’re taking a 20,000-foot view to identify and avoid any unintended consequences of your mitigation measures.

Consider partnering with an outside environmental consultant or partner who can help provide context to enable a big-picture view and identify opportunities to try something new—and perhaps even enable you to contribute to meaningful projects whose benefits extend beyond reducing your own emissions. For example, Trinity helped a natural gas company and a cheese manufacturer use a methane digester to convert the methane emissions produced by the cheesemaker into energy. The partnership not only reduces the methane emissions from the cheese-making process but also offsets some of the methane the gas company would be delivering to customers from fossil sources.

Having a decarbonization strategy will only grow in importance as investors increasingly prioritize environmental, social and governance (ESG) factors. It takes industry expertise and insights into a wide range of decision-drivers to create an effective decarbonization strategy that will reduce your carbon footprint while also supporting your bottom line. By understanding your risks and opportunities and partnering with industry experts who can help you take a holistic, technical approach, you can minimize risk and deliver the greatest impact for your investment.

For more in-depth discussion on decarbonization strategies, join our complimentary on-demand webinar, From Ambition to Action: Overcoming Decarbonization Hurdles in Construction Materials, as our panel of experts provides a deep dive perspective on Trinity’s latest commissioned research on sustainable decarbonization outcomes and challenges when implementing decarbonization strategies.