Posted in GreenBiz
January 4, 2022

4 factors to examine when setting sustainability goals for a business

GreenBiz

This article is sponsored by Shell Energy.

There are numerous reasons so many organizations across the globe are working to reduce their environmental impacts. These motives include, but aren’t limited to, meeting consumer demands, increasing efficiency, meeting regulatory requirements, adding brand value, attracting talent and creating new business opportunities. 

All of these point to the fact that practicing sustainability is a fundamental undertaking for corporations, not some short-term fad. In fact, researchers expect the renewable energy market alone to exceed $2.15 trillion by 2025

As the industry evolves, there is more accessibility to renewable energy solutions, which can be a double-edged sword for executives in the process of introducing or advancing sustainability efforts into their corporate cultures. On one hand, there are more options than ever. But conversely, achieving the best energy transition blueprint for your business can be complicated or even overwhelming. 

Consequently, here are four items business leaders might consider as they develop their path to setting and achieving their energy sustainability goals. 

1. Understand your energy use

Businesses need a solid understanding of where they stand before determining where they can go and how fast. For example, through comprehensive submetering and analytics, you can develop a deeper understanding of what is driving energy consumption and at what time of day.  

Once your organization has a clear energy consumption picture, you can identify and evaluate opportunities for improvement. This information empowers company leadership to develop sustainability goals with confidence. 

2. Set measurable long-term goals supported by an informed roadmap

When setting your sustainability goals, make sure you have the tools to measure progress. These tools can also help identify additional improvement opportunities and incremental phases of progression. 

In addition to carbon reduction and cost elements of energy sustainability goals, you should consider other drivers and ambitions. For example, we’ve seen businesses initiate solar power projects at their corporate headquarters because they wanted customers to see the panels. For them, visibility was more valuable than any potential cost savings.

When creating a plan for achieving your goals incorporate the technology available and what might be accessible in the future, your regulatory environment and commercial progression for each element. For example, if a company wants to achieve carbon neutrality by a certain date, and its operating multi-class internal combustion engine (ICE) fleets, what solutions are available and what others are anticipated? Transitioning to electric vehicles (EVs) could be one economically feasible near-term solution for a portion of the fleet. Might biofuels be an interim solution for other portions? How might hydrogen or compressed natural gas solutions align with goals and needs? Researching these potential solutions can help you understand the timeline and roadmap for meeting your goals.

3. Use a mix of near-term solutions to create momentum and mitigate risks

Even companies new to sustainability initiatives have a variety of options. They might start by looking for opportunities to optimize their energy use. Often, the most effective way to start becoming more sustainable is by reducing the amount of energy used. Typical entry-point energy solutions include:

Co-optimization Implementing multiple solutions can help to improve and accelerate energy cost and carbon intensity improvements. Returning to our EV example, behind-the-meter energy solutions can help you manage EV energy use. Processes such as smart charging, energy load management and dynamic power sharing often help prevent your demand charges from skyrocketing.

When contemplating renewable energy procurement, an organization should also consider a portfolio of diverse products and solutions. For instance, developing a mix of renewable energy credits (RECs) and Renewable Energy Virtual Power Purchase Agreement (VPPA) products across markets and locations can help to manage costs. These portfolios usually provide options to adjust the solution mix as technologies, regulations and markets evolve. Blending your options and taking advantage of innovation can help mitigate your financial risk and preserve optionality over the long run.

4. Keep abreast of evolving technologies, regulations and sustainability reporting practices 

Some businesses have the resources to monitor technological advancements in sustainability and manage such research and tracking. Others rely on trusted suppliers or advisers to help keep them informed of emerging technologies and their potential use cases. At Shell Energy, we provide guidance as part of our relationship, to assist our customers with achieving their ultimate goals. Tracking progression and anticipating timing of commercially viable solutions can help define and refine action plans through the energy transition journey.

Regulations will evolve through the energy transition. In response, it’s important to stay in tune with these changes and to adjust your plans accordingly. In addition, it’s wise to stay up to date with programs and incentives across the relevant markets.

It is also helpful to follow potential changes in sustainability reporting practices and protocols and to assess how they may affect both your goals and roadmap. For example, there is growing interest and ambition for moving past the measurement of MWhs and RECs to measuring the carbon intensity of the energy your business consumes. With this, there is impetus toward the development and use of carbon tracking tools. With progress, carbon intensity measurement will likely increase the granularity and sophistication of accepted practices and protocols. You will need to anticipate and incorporate these principles into goal definitions, sustainability roadmaps and action plans.

Another example is the building momentum around 24/7 renewable energy delivery. Again, with progression, this may drive the need to adjust your sustainability ambitions. Shell Energy’s wind and solar projects in North America add more than 1,000 GWh of carbon-free energy to the grid each year. Combined with our deep risk management capabilities, these assets position us well to help our customers progress toward more ambitious sustainability goals.

Similar to how we help our customers with technology trends, Shell Energy personnel bring understanding and insights regarding the evolving practices, protocols and regulatory landscape. We do this because we know the amount of resources that can be involved in learning about your energy use, let alone implementing the best practices for sustainability.   

Shell Energy can help you navigate the complexities of the energy transition. Discover how we can create a path to a better energy future together at ShellEnergy.com.  

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