On September 8, 2021, Noah Bucon, Regulatory Affairs Manager at 3Degrees, joined Jesse Scharf, Manager at UK Green Gas Certification Scheme and Vice President of the European Renewable Gas Registry, to discuss recent developments in the European market and how companies can leverage renewable gas as an important tool in their decarbonization toolbox.
In order to take urgent action against climate change, organizations must understand both the volume and source of their greenhouse gas emissions. The source of emissions dictates the strategies and tools that can be used to address them. According to the Greenhouse Gas Protocol Corporate Standard, a company’s greenhouse gas emissions can be broken down into three categories, called ‘scopes’.
Download this infographic to learn more about the differences between the three emission scopes and the solutions available to organizations to address them.
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The old adage states, “knowledge is power.” This is particularly true for organizations mobilizing around a plan to reduce the environmental impact of their operations. To bring about meaningful change, all organizations must fully understand their greenhouse gas (GHG) emissions status quo which helps inform their strategies, centralize efforts, and identify areas to make quick progress and build momentum.
Blue Bottle Coffee is a specialty coffee roasting company based in Oakland, CA, with more than 100 cafes in the United States and Asia. While Blue Bottle has expanded beyond its cafe walls into grocery and e-commerce, cafes still form the core of Blue Bottle’s brand by revenue. The cafes run through gallons of milk an hour, heat espresso machines and hot water towers, power dishwashers and fridges, and rely on production activities in Blue Bottle’s roasteries and commissaries. The extensive operations between green coffee arriving at import and roasted grounds breaking down in compost draw upon energy sources and involve processes that generate GHG emissions along the way.
Blue Bottle sought to understand the GHG emissions associated with its cafes, including which areas of operations had the greatest opportunities for reduction. With a desire to prioritize high-impact actions and set an ambitious carbon neutrality target, Blue Bottle commissioned a high-level GHG emissions estimate of its cafes business.
How we helped
Performed lifecycle emissions assessment for 100+ cafes globally
Established GHG emissions profiles in U.S. and Asia
Equipped Blue Bottle with information to make global carbon neutrality commitments and set long-term goals
Performed lifecycle emissions assessment for 100+ cafes globally
Established GHG emissions profiles in U.S. and Asia
Equipped Blue Bottle with information to make global carbon neutrality commitments and set long-term goals
After delivering some early wins in 2020 so Blue Bottle could begin compensating for the GHG shipping emissions from its US e-commerce platform, 3Degrees helped Blue Bottle identify GHG emissions from its cafes business, both in the United States and in Asia. 3Degrees performed a high-level calculation to measure upstream GHG emissions—beginning with the moment coffee arrives in retail countries—through downstream GHG emissions across all three emissions scopes.
With the GHG profile established for the core of its brand, Blue Bottle was able to create a plan for meaningful, long-term GHG emissions reductions within its cafe operations and part of its value chain. 3Degrees helped Blue Bottle identify “hot spots” within its cafes business, uncovering the most relevant places to begin work, and helped develop a framework for larger reduction efforts. Blue Bottle has already started to implement initiatives in high-impact areas such as electricity, dairy, and waste, and is working on scaling successful pilot projects from the generated data. The data has also helped to inform growth strategies and new purchasing models. Together with an estimated carbon footprint of its coffee sourcing, Blue Bottle set a commitment to achieve carbon neutrality across the entire brand—cafes, e-commerce, consumer packaged goods, and the corporate footprint—by 2024.
Additionally, Blue Bottle worked with 3Degrees and other outside partners to purchase verified carbon credits generated from projects within the agriculture sector, as well as credits that support international renewable energy generation in regions where it operates and where resulting GHG emissions are concentrated.
“Since our founding in 2002, sustainability has been a core value at Blue Bottle. Carbon neutrality by 2024 is our bold next step in reducing waste and greenhouse gas emissions at scale.”
— Karl Strovink, CEO, Blue Bottle Coffee
- Blue Bottle has officially announced its commitment to become carbon neutral by 2024. The GHG emissions data uncovered from this engagement has allowed Blue Bottle to jumpstart reductions and prioritize action in high-impact areas, accelerating its path to 2024. This high-level GHG emissions assessment is intended to serve as interim guidance ahead of a full life cycle assessment calculation and the development of a detailed GHG reduction roadmap to 2024.
- This work provided data that helped Blue Bottle reduce electricity emissions across its core cafes business, prioritize key geographies for action, and launch pilots to test how the brand might scale the impact of operational changes across cafes in all markets, both in the United States and in Asia.
Across the OEM motor vehicle aftersales space, transportation is a significant spend – approximately 7-8%(1) of sales. Further, the transportation sector has now surpassed the power sector as the largest emitter of greenhouse gases (GHGs) in the United States, responsible for over 29%(2) of total emissions within the U.S., and 24%(3) globally. This trend largely is driven by the growth of e-commerce, international and domestic shipping, and other activities related to globalization.
Many of the OEMs participating in Carlisle’s North American Parts Benchmark have released corporate statements committing themselves to reducing their climate impact, yet many organizations are early in the development of plans to address the greenhouse gas emissions associated with their transportation footprint. Fortunately, meaningful pathways to reduce transportation emissions are taking hold.
Where to begin?
We’ve laid out our perspectives on how to pluck lower hanging fruit and to either start or accelerate the journey towards decarbonizing transportation-related emissions.
Calculating an Organization’s Greenhouse Gas Emissions Profile
Calculating an organization’s greenhouse gas emissions profile or “carbon footprint” circumscribes an organization’s emissions and creates a heat map for understanding where and in what size emissions are occurring. It is like tracking a person’s caloric intake over time for the purpose of designing a diet that gets results while minimizing disruption to their lifestyle. Ice cream every night or just on weekends?
Decarbonizing the Warehouse
Decarbonizing the warehousecan be a fertile ground for quick wins. Tried and true onsite energy minimization efforts — such as LED lighting, onsite solar installation, high efficiency space heating and cooling, or being paid to reduce energy use during periods of peak grid congestion — can offer attractive financial return profiles while providing greenhouse gas reduction benefits. When paired with backup battery storage systems, these efforts can also increase the energy resiliency of warehouse operations.
More recently, an increasing number of companies are deploying Material Handling Equipment (MHE) powered by lower carbon fuels, such as electric or hydrogen powered forklifts, and other non-road cargo equipment. Leveraging various sources of public funding for these vehicles, such as the Low Carbon Fuels Standards incentive regimes in California, Oregon, and a growing list of other states, can deliver attractive additional revenue streams. These funds can further enhance total cost of ownership economics and help support more rapid electric vehicle deployment that lowers the GHG emissions of owned or leased mobile sources.
Transitioning to Low Carbon Shipping Fuels
The global transportation sector has begun integrating low carbon shipping fuels at an accelerated rate, in large part focused on last mile delivery and supported by decision tools that identify economically attractive alternatives to internal combustion engine (ICE) transport. Natural vehicle replacement cycles — both within and outside the warehouse — present good opportunities for organizations to begin to pilot electric, hydrogen, CNG, and other lower carbon fueled vehicles, again, especially for California and Oregon operations.
Targeting the Remaining Unavoidable Greenhouse Gas Emissions
Many companies mitigate the impact of the remaining unavoidable greenhouse gas emissions through the purchase of high-caliber verified carbon emissions reductions, otherwise known as carbon credits or carbon offsets, as a stepping-stone to complement, rather than replace, existing decarbonization strategies throughout their own operations.
Reducing the Need to Move Materials and People
Having said this, the best way to reduce greenhouse gas emissions in transportation is by reducing the need to move materials and people. A comprehensive review of your supply chain – including buildings, material flow, transportation modes, inventory deployment strategies, referral patterns, etc. will allow you to understand not only the cost/service trade-offs, but the environmental tradeoffs as well. For example, increasing forward-deployed safety stock may increase inventory costs, but may also reduce parcel/air referrals. Ideally, this should be a positive financial trade-off. But if not, is your organization willing to pay for reduced carbon emissions?
Combined with policy advocacy, vendor negotiation, and peer collaboration, the above strategies can represent a comprehensive approach to reduce the largest source of emissions globally.
Carlisle and its decarbonization partner, 3Degrees, have helped clients ranging from Rivian to Proterra understand and address the impact of their transportation-related emissions with a range of solutions customized to meet their unique business needs and sustainability goals.
Harry Hollenberg, Managing Director of Carlisle & Company
Carlisle & Company is the leader in aftersales strategy and insights, partnering with a range of highly engineered clients to solve their most complex business problems, drive growth, and create value.
Dan Kalafatas, Chairman of 3Degrees and former Carlisle & Company Manager
Dan serves as the chairman of 3Degrees’ board of directors, focusing on the company’s long-term corporate strategy and strategic initiatives.
Peter Weisberg, Director on the 3Degrees Carbon Markets Team, shares key trends, benefits, and considerations for organizations leveraging RNG certificates to address their operational emissions.
Watch the video
In the first blog in our Journey to Zero series, we discussed how a growing number of organizations are setting climate goals, such as net zero, carbon neutrality, or goals approved by the Science Based Targets initiative (SBTi). We also reviewed the first two of four key action areas to help companies get started on their journey to net zero emissions: Business Strategy Integration and Operational Reductions. There was some important groundwork laid in that article, so I encourage you to go back and give it a quick read if you missed it.
In this second and final blog of the series, we’ll be diving into the next two action areas, Value Chain Reductions and Remaining Emissions, and wrapping up with some thoughts on prioritizing your company’s net zero efforts.
Value chain reductions
Most companies will find that their value chain — or Scope 3 — emissions constitute the majority of their GHG emissions. Value chain emissions are derived from sources upstream or downstream of your organization’s operational boundary but are still within your scope of influence. More specifically, supply chain emissions within the value chain commonly represent the biggest share of a company’s emissions footprint.
For example, a consumer packaged goods company might discover that a significant amount of its emissions are generated by fertilizer used during the manufacturing of its food products, since the fertilizer emits the powerful warming gas nitrous oxide.
Tackling value chain emissions can be complex and requires robust planning — and the carbon reduction impact is typically significant. For this reason, a plan to address Scope 3 value chain emissions is a critical component to any climate strategy. Common steps in a value chain action plan include:
- Conducting a Scope 3 emissions screen and hotspot analysis or a product-level life cycle analysis (LCA) that maps all sources of emissions from a specific product
- Engaging suppliers to obtain primary emissions data
- Developing a strategy to engage suppliers in carbon reduction initiatives, such as converting to renewable energy use
- Creating a system of recognition and/or rewards for suppliers that are successful in their GHG reduction efforts
Last but not least, an organization’s net zero strategy is not complete without a plan to address the emissions that remain after all other internal reduction measures have been implemented.
Even companies that are highly successful in reducing their GHG footprint across all three emissions scopes will have some remaining emissions that need to be addressed in order to reach their climate goal. This is where carbon credits — also known as carbon offsets or verified emissions reductions or removals (VERs) — come in. Incorporating carbon credits into a larger GHG reduction effort enables organizations to compensate for unabated Scope 1 and 3 emissions today, while making progress towards longer-term goals like net zero.
It’s not always easy for companies to determine the best path forward with respect to carbon credits. The carbon market is evolving quickly, and there is not yet a standard for exactly how carbon removals will be used to meet long-term net zero goals (though one is currently being developed). While there are differing opinions on the role of carbon credits in achieving climate goals, there’s common consensus that a corporate-level net zero claim must balance all residual emissions with removals from the atmosphere or ocean.
As a result, many buyers are starting to shift towards carbon removal versus avoided emissions projects, and removals tend to be front and center in the dialogue around the future state of net zero. That said, carbon removal technology is still relatively nascent, and there is a fair bit of uncertainty: What will be considered an appropriate carbon removal credit to meet the still-being-crafted standard? How should organizations think about projects that offer short-term versus long-term durability?
Given this evolving landscape, a company can begin to integrate investments in carbon removal projects today as a small part of its current portfolio, alongside carbon avoidance projects. It’s important to recognize that implementing a carbon credit strategy is not a replacement for doing the hard work of emissions reductions but should be a complement to a longer-term internal reduction strategy. Support for high-quality, third-party verified carbon projects that avoid emissions in the near term is an important tool in guiding an organization’s path towards longer-term climate goals.
Prioritizing net zero efforts
Together, these four action areas form a comprehensive framework of corporate action. Keep in mind that these efforts should overlay with bigger-picture thinking about understanding the climate crisis and the role your company can play in shaping and supporting a net zero economy on a global scale. Which brings us full circle to the original question: What’s your company’s climate opportunity?
If you’re interested in learning more about how you can support your company’s journey to net zero, I encourage you to visit our new Net Zero Resource Center to download an infographic that covers all four action areas, watch a quick video, and view other helpful resources.
There are several categories of carbon credit projects. To determine how to best address your organizational emissions through the purchase of carbon credits, it is vital to understand the differences between the various project types.
Download this helpful infographic to understand the unique attributes of avoided emissions and carbon removal projects and their carbon storage potential.
To address the growing climate crisis, more organizations than ever before are setting climate goals, such as net zero, carbon neutrality, or SBTi goals. But committing to reach net zero emissions and executing on climate goals are two very different things. In this first article of a two-part series, we’ll discuss how organizations can embrace this climate opportunity, and outline the first two of four key action areas to help companies get started on their journey to zero.
Regardless of where you are in your journey, the question at the heart of your net zero strategy should be: What is your organization’s climate opportunity?
While short-term, programmatic goals are important (more on that later), it’s critical to determine how you can leverage your company’s superpowers to help create a net zero world and thrive in it. While the climate emergency requires organizations to implement rapid and deep decarbonization initiatives across all three scopes of emissions, it also presents a unique opportunity for them to innovate around products and services that can support and propel faster decarbonization, creating real value for customers, employees, and shareholders. A great example of this is the dramatic shift the transportation sector has undertaken towards electrification.
Your organization’s climate superpowers may not be immediately apparent. Creating programmatic goals can help illuminate your unique climate opportunity, while also taking immediate action to reduce your greenhouse gas (GHG) emissions. Let’s take a deeper look at each of the following key action areas:
- Business Strategy Integration
- Operational Reductions
- Value Chain Reductions
- Remaining Emissions
Business Strategy Integration
Like any other important business initiative, an organization’s decarbonization efforts should be fully integrated into its existing business strategy. Getting started will require climate intelligence on topics such as:
- Benchmarking competitive actions and goals
- Reporting and climate disclosures
- Customer and shareholder expectations
- Annual greenhouse gas (GHG) inventory
Cumulatively, these pieces of information can help you clearly articulate your business case for action, which needs to be well-articulated, supported by emissions data, and shared in the language of your most important stakeholders.
To develop your business case, a common starting place is benchmarking. What are your peers doing with respect to net zero goals? How do your organization’s climate actions stack up?
Another starting point is conducting a risk assessment and disclosure of climate risk to investors. The most common climate risk reporting framework is the TCFD framework, which refers to the Taskforce for Climate-Related Financial Disclosures, the organization that put forth recommendations on how and what to report as part of climate risk.
Underpinning all of these efforts is a need for robust climate understanding and stakeholder education. A “climate boot camp” for stakeholders may include topics such as definitions of common climate commitments, high watermark activities of leaders, a crash course in greenhouse gas accounting, and identification of your climate risks and opportunities.
Finally, any foundational work needs to include an annual GHG emissions inventory. Including important data on key emissions hotspots is required in order to set a meaningful strategy.
The most effective climate strategies take all these actions together and weave them into an organization’s current business strategy to complement and support its mission, vision, and values.
Operational reductions refer to actions an organization can take to address their emissions from activities such as:
- Electricity purchased to operate office and manufacturing facilities where fossil fuels are burned to make the electricity
- Direct burning of fossil fuels, like gallons of gas purchased to fuel company cars or natural gas used in a co-gen plant
These operational emissions, known as Scope 1 and 2 emissions, are a common starting point for reductions. Many companies also consider some Scope 3 emissions, such as those from employee commuting and company travel, as part of their operational boundaries.
To accomplish these emissions reductions, companies often find quick wins from energy efficiency projects, installing rooftop solar, and purchasing renewable energy. Renewable technology is available today and can be a valuable source of near-term action since companies have direct control over their electricity procurement.
In part two of this blog series, we’ll cover the remaining action areas: Value Chain Reductions and Addressing Remaining Emissions. In the meantime, feel free to visit our new Net Zero Resource Center to download an infographic that covers all four stages, watch a quick video about beginning your journey to net zero, and view other helpful resources.
For Okta, an innovative San Francisco-based identity company, addressing its impact on the climate is a foundational component to one of its three Environmental, Social, and Corporate Governance (ESG) pillars. While the company understood the need to confront its greenhouse gas (GHG) emissions, Okta was at the very beginning of its decarbonization journey and, like many other organizations starting out, wanted to make an impactful first step. In August of 2020, Okta completed its first GHG emissions assessment which allowed it to measure its emissions, establish baselines, and begin to define renewable energy and carbon reduction goals.
With this information, Okta approached 3Degrees to help develop a plan to procure renewable energy to address its energy consumption, while also having a positive effect on the community.
Over the past 15 years, 3Degrees has supported The California Bright Schools Program with the procurement of more than 173,000 MWhs of solar RECs from school districts throughout California. Taking into account its desire for community impact, purchasing RECs from California schools proved to be a perfect fit for Okta.
The Bright Schools Program was born out of a vision for school districts to proliferate solar energy adoption and save general fund dollars, while providing clean energy education for students and teachers. This program, implemented through the California Energy Commission, helps identify the most cost-effective energy saving opportunities and supports the installation of photovoltaic solar systems on schools across the state.
The Milpitas Unified School District (MUSD), just southeast of San Francisco, is a great example of how schools are benefiting from solar development. As a participant in the Bright Schools Program, the Milpitas Unified School District is estimated to save $12 million over the portfolio’s lifespan. The district has also created an additional revenue stream through the sale of renewable energy certificates (RECs) generated by the system, which 3Degrees has been purchasing since 2009.
How we helped
Working closely with Okta, 3Degrees assessed the company’s purchase criteria and developed a portfolio of renewable energy options that would meet its energy requirements and desire for additional co-benefits. Through the purchase of RECs generated from the Bright Schools Program’s solar network, Okta was able to demonstrate its commitment to the environment and the community. The purchase helped Okta meet its renewable energy goal for 2020, while also making a positive impact on California schools.
“Every organization should be taking action on climate change, as it adversely affects our people and planet. At Okta, we’re early in our journey, but we’re committed to doing our part and reducing our Greenhouse Gas (GHG) emissions. We’re implementing energy efficiency efforts to reduce consumption at our offices — and for energy we consume, we’re investing in renewable energy projects with positive environmental and social impacts. We value our partnership with 3Degrees and their expertise in this area.”
— Alison Colwell, Director of ESG and Sustainability, Okta
Okta’s initial purchase was large enough to address its entire Scope 2 emissions footprint in the United States. By supporting the Bright Schools Program, Okta was able to create a meaningful connection for its employee stakeholders and highlight the tangible benefits of its efforts.
Okta’s purchase is an example of how organizations can go beyond “checking the box” with their renewable energy purchases and support projects with strong co-benefits, demonstrating that even a first step can also be meaningful to stakeholders and impactful to communities. Acknowledging that this is just the beginning of its journey, Okta is already looking ahead at options to address its international Scope 2 emissions, as well as ways to address its indirect Scope 3 emissions.