Carbon Credentials, the World Business Council for Sustainable Development (WBCSD), and representatives from WBCSD member companies participating in the New Energy Solutions project recently published new guidelines for an integrated energy strategy.
The guidelines explain how a company can build an integrated energy strategy that will set out how to achieve energy, financial and environmental objectives by considering the energy used in its own operations and across its value chain.
Why is it needed?
As the energy system evolves to become smarter, more interconnected, more decentralised and lower carbon, companies that have the capabilities to adapt to this transformation will benefit the most. Companies will need to actively engage with their supply chain and customers on the topic of energy resources so that they can create advantages by developing new capabilities, exploring new business models, capturing new revenue streams and finding energy and cost efficiencies.
“Companies who take a strategic and integrated approach to energy sourcing and management and understand how they fit within the evolving energy system can become more efficient, more circular and low-carbon. They can also gain a competitive advantage in terms of managing costs and climate impact,” said Maria Mendiluce, Managing Director, WBCSD.
For there to be any chance in meeting the objectives of the Paris Agreement and the SDGs then organisations must play their part by having integrated energy strategies with ambitious emission reduction targets. Failing to consider decarbonisation in business decisions increases the risk of disruption to business operations and reputational damage in the future.
What businesses can do
Businesses must continue to be at the forefront of the fight against climate change. With British Politics having been dominated by Brexit over the last few years, this commitment by the government is a timely reminder that although our collective attention may be diverted, the climate crisis continues. What is required is clear and decisive leadership in order to initiate systemic change, with resources allocated help businesses deliver this change successfully, through prioritising energy efficiency, technological innovation and wide-reaching engagement programmes.
This is why we set a science-based target and continue to work with our clients to enable a zero-carbon economy. Has your organisation engaged on science-based targets yet?
A traditional energy strategy lays out a plan for achieving a company’s financial and environmental objectives as they relate to energy. It’s inward looking and usually only focuses on a company’s own operations.
In contrast, an “integrated” energy strategy looks at a company’s energy use in its own operations as well as across its energy-related value chain. It describes how a company works internally and with upstream and downstream stakeholders and defines how all energy-related inputs and outputs become more efficient, more circular and low-carbon. An integrated energy strategy will act as a roadmap to take a company from being a passive energy user to a proactive player.
The guidelines explain the six elements that are vital for an effective integrated energy strategy. They contain the activities and solutions that will enable you to realize your company’s vision and capture new energy-related business opportunities.
The guideline suggests a five-step process to develop, implement and continually improve an integrated energy strategy. The process, key questions and outcomes are explained for the strategy development phase.
The guideline also defines five tests to assess whether it has the characteristics that you should be aiming for.
- Outward looking: Does your integrated energy strategy define your role in the energy value chain and how you are collaborating with upstream and downstream stakeholders from your company’s wider value chain?
Does your integrated energy strategy take into consideration the environmental and social impacts of your energy use?
- Ambitious: Is your integrated energy strategy consistent with a scenario of 1.5°C temperature increase above
- Comprehensive: Does your integrated energy strategy cover the consumption of energy from all sources, all business activities and across your value chain?
- Aligned: Does your integrated energy strategy align with your corporate strategy and leverage the strengths of your company?
Does your integrated energy strategy support your company’s sustainability strategy?
- Collaborative: Have you built your integrated energy strategy through well-structured collaboration with stakeholders from within your company and with your wider value chain?
In the course of 2019, WBCSD’s New Energy Solutions project will build on these guidelines by developing follow-on principles that explain how to work with upstream and downstream stakeholders on: reducing energy consumption through energy efficiency, sourcing low-carbon energy and investing in natural climate solutions.
In parallel, the project will be publishing a portfolio of business cases to help companies understand emerging energy solutions.