Once we determined the carbon footprint and understood where the various areas of impact were coming from and their relative size, we next turned our attention to the consideration of target setting. More specifically, setting potential targets to aim for through various mitigating initiatives. Here we encountered something that in hindsight might have been expected; there was reluctance to set specific reduction targets at this point in the larger process.
Consistent with the broader sustainability arena, the reluctance is largely based on a lack of experience and/or confidence establishing firm targets that one can reasonably hope to attain. As a related factor, where firms historically do not pursue business initiatives with an eye toward minimizing their environmental impacts, there isn't a good understanding of the actual impact that can be realized through any specific type of initiative. The more appealing route therefore is to develop a base of understanding of the extent mitigating initiatives can lead to and THEN establish targets that such initiatives can help deliver.
This is not an unreasonable approach for most firms as they are not under extensive pressure to establish such targets. Stakeholders are largely focused on whether or not firms have a good understanding of the environmental impacts of their respective business operations and generally understand that this is a critical prerequisite. Further, in light of the increasing emphasis on the auditability of sustainability programs and achievements, firms are understandably concerned with making public claims/projections that may not be realistic.
Despite the absence of specific targets, mitigating strategies and initiatives were identified. Where a major contributor to the carbon footprint for this specific client was driven by their electricity consumption, mitigation strategies emerged in the Facilities and IT areas. Facilities has various opportunities to reduce power consumption (e.g., updated lighting, more efficient cooling, improved weatherproofing and the like) as does the IT area (e.g., increased virtualization, consolidation of servers, better balanced cooling in the data centers, desktop power management, to name a few).
Certainly, one can identify a myriad of possible mitigating initiatives to consider. However, there are at least three major challenges here. The first is ensuring that the fixed budgetary funds available will deliver the level of ROI considered acceptable and realistic. The second and perhaps even more critical challenge is ensuring the proposed initiative(s) not only lead to desired mitigation of environmental impacts but also support affected business operations. Finally, establishing the optimal portfolio of initiatives to pursue can be challenging; particularly in those environments where many initiatives across a number of strategies are under consideration. Clearly, each of these challenges raise important questions of their own.
When we speak of ROI we need to actually understand the components this metric consists of. What IS the return and how will it be measured? If we're focusing on reduction of electricity consumption do we have a specific dollar amount in mind? What is the environmental impact reduction for each megawatt avoided? On the flip side, what is the actual investment that will lead to the anticipated benefits? Is the R (as determined in terms of dollar savings, environmental impact, perhaps business growth potential) worth the I? Complicating matters further, what is the TCO of a given initiative?
The second major challenge is critical and can be equally difficult to evaluate. Will a potential initiative actually support business objectives while also lead to a reduction in environmental impacts or are we at risk of accomplishing the latter while adversely impacting the former? The use of virtual meeting technology is a good example. This technology can certainly reduce the need to travel and the environmental impacts such travel entails. But it may be counterproductive in those cases where there is a high premium on face to face meetings of core business activities.
The third major challenge can be particularly difficult. Sophisticated modeling algorithms exist and are being integrated into EEMs such as the one we worked with here. These can help firms determine what the optimal combination of initiatives under consideration lead to. This outcome can be based on explicit, tangible,criteria such as target carbon reduction to be attained within a given overall budget. However, such optimization algorithms are not as effective when trying to introduce less tangible objectives into the mix of selection criteria (e.g., extent of market share that may be captured, degree of client satisfaction that will be realized, etc.). Here it is clear that careful scrutiny must be applied to the mix of initiatives under consideration before making a final determination of what to pursue or not.
In summary, knowing one's environmental impact as represented by a carbon footprint is a key prerequisite to setting of mitigation targets and the specification of strategies and initiatives that help attain those targets. As covered here, one need not set specific mitigation targets immediately but can work towards that end by first understanding which options one can pursue, what the relative cost and mitigation impact of such options are, and then establish an approach comprised of various initiatives to pursue. Based on the experience gained through this process firms can then progress to the setting and publishing of explicit targets that are subsequently pursued much like other business objectives are.
Speaking of "publishing", the 4th installment in this overall thread will cover the area of reporting.
Stay tuned.
