Decarbonization & Climate Strategies

Decarbonization or climate strategies are an essential part of sustainable business strategies. In times of increasing risks due to climate change and soaring demand, sustainable companies are one step ahead.

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What is decarbonization?

A decarbonization or climate strategy is used to accelerate the reduction of carbon emissions and other GHG emissions. Decarbonization measures promote the shift to renewables and initiate the development of new product offerings.

 

If companies want to improve their sustainability performance or establish a more sustainable business, corporate climate action is needed. However, decarbonization serves not only as an essential measure for environmental protection, but also as risk reduction. In order to streamline the process towards carbon neutrality and net zero emissions, we use the following approach:

Related topics:

Corporate Carbon Footprint
Net Zero Strategy
SBTi Climate Targets
Climate Transition Plan (CTP)
TCFD Szenario Analysis
CDP Reporting
With decarbonization strategies, companies can reduce their carbon footprint
EY denkstatt’s decarbonization approach

Why decarbonization is necessary for your business

A decarbonization and climate strategy is not only an option, but an absolute necessity to meet regulatory requirements and grow successfully. Human emissions of CO2 and other greenhouse gases are a primary driver of climate change. Therefore, the Paris Agreement on Climate Change provides ambitious climate actions to reduce greenhouse gas emissions. Climate Action is one of the 17 SDG goals defined in the 2030 Agenda for Sustainable Development. Climate change leads to multiple risks across all countries, sectors and industries. The IPCC report continuously provides evidence of the massive impact of global warming.

Therefore, climate risk is already considered as a financial risk.
Decarbonization or climate strategies help to reduce it.

Competitive advantages and opportunities

Decarbonization is not only an important lever for sustainable business and your sustainability strategy. It is also one of the main topics of the green economy and therefore part of Corporate Social Responsibility (CSR) and Environmental Social Governance (ESG). Companies that have already taken the path toward decarbonization benefit from many advantages.

Save money

via reduced energy costs and carbon tax linked to the level of CO2 and other GHG emissions

Reduce risks

such as reputational, financial, and physical risks from climate change

Prepare for reporting requirements

from e. g., CSRD, TCFD or from clients (e. g., from CDP)

Get ready for strategic decisions on product and process development or investments in future technologies or new markets.

Decarbonize your business with EY denkstatt

Corporate Carbon Footprint (CCF)

Find out about the GHG emissions produced by your company’s operations
The CCF describes the total amount of greenhouse gases produced directly and indirectly through a company’s operations and activities. It is the ideal tool to detect inefficiencies, communicate your improvement efforts, set targets and optimize the climate performance of your organization.
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Product Carbon Footprint (PCF)

Get a deep understanding of your products’ climate performance
The Product Carbon Footprint (PCF) expresses the total amount of greenhouse gases caused directly and indirectly by a product over its life cycle, in CO2e. The PCF is necessary as a starting point for your improvements and also to enable the calculation of own footprint with primary data in the downstream value chain.

Net Zero strategy

Reach your Net Zero target along the value chain and profit from financial benefits as a green business
Net Zero stands for the objective of a balance between human-induced GHG emissions and the removal of existing ones. A Net Zero strategy provides the roadmap for companies to contribute to this goal. We help you to reduce as much emissions as possible and neutralize the residual ones!
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TCFD reporting

Assess the threats of climate change and take advantage of the opportunities for your business
The Task Force on Climate-Related Financial Disclosures (TCFD) is committed to supporting the disclosure of information related to climate change, improves the understanding of material risks and enables market participants to assess opportunities and threats resulting from a changing climate. Our experts give you the best support for implementing a TCFD reporting system.
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CDP reporting

Contribute to climate protection by processing and providing climate-relevant data
The Carbon Disclosure Project (CDP) aims to make a positive contribution to environmental and climate protection by processing and providing climate-relevant data. Our goal is for companies to address sustainability and climate challenges in a structured and holistic manner. Therefore, we are happy to support your company in dealing with the CDP programs climate change, water, forest and supply chain.
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SBTi target setting

Push your decarbonization journey on a sound scientific basis by using clear Net Zero targets
Science-based targets show your organization how much and how quickly you need to reduce your greenhouse gas emissions to be in line with the Paris Climate Agreement targets and the 1.5°C reduction path. Over a thousand organizations worldwide are leading the transition by setting emissions reduction targets. Hundreds of them have raised their ambition by committing to business ambition for 1.5°C.
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Climate transition plan (CTP)

Reach the top of your climate action
Get your ESRS E1-1 transition plan for climate change mitigation ready for CSRD conformity. A climate transition plan outlines your company's long-term roadmap to contribute to the 1.5-degree pathway of the Paris Agreement. A CTP helps you to identify climate-related risks and opportunities and initiates the green transformation of your business in a timely manner. The disclosure on climate transition plans is also a crucial component of the CSRD-
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Energy management and efficiency

Drive the change: face your energy potentials and improve your energy efficiency
Manage your energy consumption and enter the process of energy saving. Start the implementation of ISO50001 and/or 14001, including clear data management supported by databased-software solutions and in accordance with existing structures and business processes. Our service also includes support with (internal) energy audits in the context of EnMS and energy efficiency audits according to national law and in the context of your decarbonization strategy. Start implementing KPIs by using our patented SmartIndicator-Analysis for instance. We also offer best solutions for KPIs monitoring. Moreover, we provide the best support for constant improvements, measure-quantification and drive for change.

Renewable energy sources

Start the transition and power your business with renewables
We analyze the current load of electricity and heat to technically enable you to switch to the best solution for using renewable energy sources, for example, through heat pump combinations and waste heat recovery.

Carbon Capture & Storage or Utiliza­tion (CCS and CCU)

Join the mission for GHG removal from the atmosphere
The Paris 1.5°C target is not achievable with projects, that reduce GHG emissions only. Instead, the removal of CO2 from industrial exhaust gases is necessary to combat global warming. Technical innovation in Carbon Capture and Storage/Utilization is gaining momentum. denkstatt is involved in topic leadership in the form of current research projects.

Biological carbon removals

Neutralize the impact of your residual GHG emissions by storing carbon in ecosystems
We support our clients in the development or assessment of biological carbon removal projects. Businesses, that use the SBTi Net Zero targets can “neutralize” remaining emissions with projects that remove CO2 from the atmosphere by storing it in biomass or minerals for example. Larger amounts can be stored in soils, biochar or by enhanced weathering.

Reach out to our expert to find a solution that suits your company!

Constantin Saleta

International Service Leader Decarbonization

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FAQ

Frequently asked questions on decarbonization

Decarbonization works according to a clear procedure. The first step is to calculate the carbon footprint at the company or product level for Scope 1,2 and 3. To decarbonize, climate targets are then set within the company and mitigation measures are planned to reduce the carbon footprint. For Scope 1&2, low-carbon power generation becomes more important and the use of fossil fuels is reduced accordingly. Energy efficiency assessments and a shift to renewable energy sources also take place. For Scope 3, mitigation measures are more complex, as suppliers, partners, and customers need to be engaged, to implement measures to reduce this footprint. A typical hotspot can be found within Scope 3.1 – Purchased Goods and Services.

Companies that manage to reduce their upstream and downstream emissions (Scope 1 2 3 emissions) gain competitive advantages due to energy saving, the early switch to renewable energy sources and customized solutions in order to strengthen their business. Moreover, they shape the green transition and contribute towards achieving the goals of the EU Green Deal. Human emissions of CO2 and other greenhouse gases (GHG) are the primary causes of climate change. Sustainable development depends on climate action. Therefore, climate action (SDG 13) is one of the Sustainable Development Goals of the UN 2030 agenda.

Decarbonization efforts should follow a strict hierarchy:

  1. Avoid energy consumption
  2. Reduce energy consumption by increasing efficiency
  3. Cover remaining energy consumption with renewable energy sources
  4. Neutralize the unavoidable emissions

Climate change leads to multiple risks across all countries, sectors and industries. The IPCC report continuously provides evidence of the massive impact of global warming. Therefore, climate risk is already considered a financial risk. Decarbonization or climate strategies help to mitigate the risks, as companies can not only contribute to climate change mitigation but also prepare for or avoid risks. Learn now how TCFD can help you gain a better understanding of your risks related to climate change.

National legislation imposes strict obligations on companies to mitigate climate change and meet the Paris Agreement goals. In order to limit global warming to between 1.5 degrees Celsius and 2 degrees Celsius, the requirements and carbon tax costs will increase massively in the coming years. However, decarbonization measures affect all corporate divisions and the entire value chain. Due to the complexity of decarbonization and climate strategies, there is no time to lose.

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EY denkstatt: A new chapter begins

The denkstatt Group joins forces with UV. This means that we are now part of the UV network with 400,000 employees in 150 countries. Together, we are setting new standards in sustainability consulting, especially in the core countries of EY denkstatt Austria, Bulgaria, Romania, Hungary and Slovakia – for our clients and sustainable development across national borders.

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April 10, 2024
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