Our industry is engaged in an important dialogue to improve sustainability through ESG transparency and industry collaboration. This article is a contribution to this larger conversation and does not necessarily reflect GRESB’s position.
On a recent episode of his show Last Week Tonight, John Oliver tackled the subject of carbon offsets. His point? Companies should be wary of heavy reliance on offsets, but many continue to use them as an easy way to meet net-zero goals. Oliver cited one study which found that two-thirds of companies in heavily polluting industries rely on offsets instead of emissions reductions to achieve net zero. The problem with carbon offsets, as stated by Oliver, is that “Study after study has indicated that most offsets available on the market don’t reliably reduce emissions… it’s easy to say that you are reducing carbon emissions, but it is much harder to prove it. And the truth is, there aren’t many checks and balances in place to prevent abuse.”
While your company can still use carbon offsets, it may be best to use them sparingly and instead focus your energy and resources on emissions reduction efforts. This approach has a number of benefits, such as:
- Building increased trust with consumers and investors
- Helping your company avoid accusations of greenwashing
- Effectively reducing greenhouse gas emissions, thus improving the health of the planet
In this article, we’ll explore three tangible ways your company can reduce its emissions and work towards net zero.
1. Renewable Energy Generation or Procurement
Renewable energy procurement is the process of sourcing renewable energy to meet the needs of your company through a third-party energy supplier or local distribution company (LDC). Renewable energy generation, on the other hand, involves generating your own renewable energy without going through a third party. Because renewable energy procurement and generation allow your company to sidestep fossil fuels, they are an excellent way to reduce your greenhouse gas emissions. Here are several up-and-coming methods your company can employ to procure/generate renewable energy:
- On-Site Renewable Generation (or Distributed Energy Resources (DERs)) – Rooftop solar panels are the most common and fastest-growing type of DER/on-site generation, but other types also exist, like electric vehicles (EVs), small-scale hydroelectric dams, and natural gas generators, biodigesters, and battery storage. DERs allows your company to produce its own renewable energy, thus reducing emissions (and, as a bonus, giving your company energy resilience).
- Green tariffs – Green tariffs are programs in regulated electricity markets offered by utilities that allow large commercial and industrial customers to buy bundled renewable electricity from a specific project through a special utility tariff rate. Green tariffs increase your company’s ability to access green power and meet its net zero goals.
2. Implementing Efficiency Projects
Through efficiency projects, whether operational or capital-intensive, you can reduce energy usage and emissions. Examples of efficiency projects include:
- Installing ENERGY STAR-certified appliances – ENERGY STAR gives its certification to appliances and products that meet its rigorous energy efficiency standards.
- Getting an audit on your building(s) – To get a thorough understanding of your building’s energy usage, you may want to get a professional energy audit from a certified professional who will provide you with the guidance you need to make changes. Make sure to get professionally certified inspectors with an ASHRAE or CEM certification. Such inspectors can use thermal imaging tools to identify areas of your facility that are losing energy through heat, which can help identify air leaks and inefficient manufacturing equipment. They can also inspect your insulation, HVAC system, and lighting systems.
- Updating your HVAC system – The HVAC, or heating, ventilation, and air conditioning system, uses much of the energy in your building – The U.S. Small Business Administration notes that HVAC equipment accounts for 40 percent of energy usage in commercial buildings. Thus, it is essential that your HVAC is up to date and running efficiently.
- Transitioning to electric vehicles (EVs) – If your company has delivery vehicles or the like, switching to electric vehicles is a great way to reduce the emissions that stem from using traditional cars.
3. Peak Load Management
Peak load management is the process of reducing demand for electricity during peak hours. Peak load management allows you to reduce your company’s greenhouse gas emissions by shifting load overnight (e.g., to baseload nuclear and wind power) and avoiding the dispatch of the dirtiest generation during peak hours (e.g., oil peakers).
Your company can implement peak load management through either low-cost operational strategies or capital-intensive investments. Examples of low-cost operational strategies include:
- Creating a startup schedule, e.g., staggering the turning on of equipment.
- Tweaking operational times of energy-intensive equipment (scheduling so that not all machines run at once).
- Pre-cooling the building – running the building’s air conditioning overnight (when demand is low) so it does not require as much energy to maintain temperature the following day.
Examples of capital-intensive investments include:
- Utilizing energy storage systems like a battery or thermal ice storage.
- Adding capacity via on-site generation, i.e., the generation of your own electricity through renewable energy sources, which allows your company to limit its reliance on the grid.
- Installing equipment that uses less energy, i.e., using more efficient equipment that reduces the base load of energy used at all times.
Important Takeaways
- When possible, transition your company away from carbon offsets and focus efforts on emissions reduction as you move along the path to net zero. If your company is just starting its net zero journey, make sure the leaders and drivers in your company have a good understanding of the potential risks of relying too heavily on carbon offsets.
- Be prepared for the fact that, when it comes to immediate gratification on the net-zero front, emissions reduction efforts take longer to show results than carbon offsets. While carbon offsets are as immediate as purchasing a credit, emissions reduction efforts require time to work, as well as consistent monitoring to make sure they are performing as expected.
- Going off the above point, having quality data at your disposal is essential when embarking on emissions reduction efforts. Having complete, accurate, and audited data allows you to see what projects are needed most to reduce emissions at your company, which projects will be most effective depending on your sector, and how well they are performing following implementation.
This article was written by Beatrice O’Campo, Marketing Associate, WatchWire.