What was once a climate commitment is now a competitive advantage. With companies excelling in growth, profitability, and ESG, generating an annual Total Shareholder Return (TSR) premium of 2 percentage points over purely financial counterparts, the business case for decarbonisation has never been clearer. Yet only 9% of companies can measure their emissions comprehensively, while 86% still rely on manual spreadsheet calculations. The gap between intention and execution remains vast, but the path forward doesn’t have to be overwhelming.
Here are eight practical steps to transform your decarbonisation strategy from aspiration to action, designed for sustainability and finance professionals ready to drive meaningful change at scale.
1. Start with the data you have, improve later
Perfectionism kills progress in carbon accounting. Rather than waiting months for pristine data, establish your baseline using whatever information you currently have available. The key is to quickly calculate your baseline using available data and estimates where necessary. This provides an initial overview of your main emission hotspots and helps prioritise improvements in data collection.
Consider implementing a data quality hierarchy approach. Assess your current data using quality indicators to understand strengths and limitations. For high-emission sources with poor data quality, focus your improvement efforts there first. For smaller emission sources, industry averages or proxy data can suffice initially.
When setting your base year, specify clear reasons for choosing that particular year. For companies reporting Scope 2 emissions, select a year where both market-based and location-based data are available to ensure consistent future comparisons.
Remember: collecting, assessing, and improving data quality is an iterative process. Start now, improve continuously.
2. Don’t forget to include Scope 3 in your calculations
Scope 3 emissions represent the elephant in the sustainability room. These indirect emissions from your value chain often constitute over 90% of a company’s total emissions, making them critical for any serious decarbonisation effort.
The 15 categories of Scope 3 emissions provide a systematic framework to organise and understand the diversity of activities within your corporate value chain. Key areas typically include purchased goods and services, business travel, and waste generated in operations.
Digital emissions deserve special attention
For companies with significant IT operations, digital services represent a substantial and often overlooked emissions source. This is where specialised platforms like Fruggr become invaluable.
Fruggr makes the hidden environmental and social impacts of digital services visible through automation, methodical digital Life Cycle Assessment (LCA) coverage, and engagement tools.
Fruggr’s strength lies in its ability to track emissions across the complete digital lifecycle-from hardware manufacturing to software operation to end-of-life treatment. When combined with comprehensive carbon accounting solutions like Plan A, organisations gain full-scope emissions tracking that feeds seamlessly into their overall Scope 1-3 inventory.
The comprehensive approach to Scope 3 enables companies to understand their full emissions impact and focus efforts where they can have the greatest impact. This understanding becomes crucial when regulators increasingly require Scope 3 disclosure, particularly when these emissions exceed 40% of total emissions (source).
3. Leverage digital tools to save time and improve accuracy
Manual spreadsheet management is a major bottleneck in corporate sustainability programmes; carbon accounting platforms eliminate it by streamlining how sustainability teams work.. As Nathan Bonnisseau, co-founder at Plan A, notes: “If that team can divide by 80 the time to get a complete report, then they have that much more time available to strategise around this data.”
Modern carbon accounting solutions provide several key advantages:
1. Automated data mapping: Systems recognise different emission types and accurately map them to appropriate scopes and categories as defined by the GHG Protocol.
2. Integrated emission factors: Comprehensive databases regularly updated by dedicated teams, covering dozens of countries worldwide.
3. Certified methodologies: Platforms certified for GHG Protocol compliance ensure quality outcomes and regulatory compliance.
4. Advanced analytics: Dashboards for analysing emissions across different scopes with tailored reporting capabilities.
4. Set ambitious yet achievable reduction targets
Effective target setting requires balancing scientific necessity with business reality. Science-based targets provide the framework for this balance, ensuring your commitments align with limiting global warming to 1.5°C.
Establishing the foundation
Before setting targets, senior management commitment at the board/CEO level is essential.. This commitment ensures changes in behaviour throughout the organisation, the establishment of internal accountability systems, and the allocation of adequate resources.
Your target framework should include:
1. Near-term targets: 5-10 year GHG mitigation targets aligned with 1.5°C pathways.
2. Long-term targets: Pathways showing emissions reductions to reach net-zero by 2050 or sooner.
3. Clear boundaries: Defining which scopes, geographic areas, and GHGs are included.
Critical considerations for target integrity
Carbon credits must not count as emission reductions toward science-based targets. Under emerging regulations like ESRS, GHG emission reduction targets shall not include any GHG removals or carbon credits as means of achieving targets.
Target setting capabilities within comprehensive carbon management platforms enable companies to model different decarbonisation pathways, forecast future emissions based on planned actions, and identify gaps between net-zero pathways and current targets before they become problems.
5. Prioritise decarbonisation over carbon offsetting
The sustainability landscape has shifted dramatically away from offset-first strategies. Direct decarbonisation delivers immediate and verifiable emission reductions within your organisation’s operations, building authentic stakeholder trust while avoiding greenwashing risks.
Why decarbonisation-first matters
Simple yet effective decarbonisation actions deliver measurable results quickly. Electrification of vehicle fleets leads to notable emission reductions as soon as previous fleets are replaced. Similarly, replacing commutes and business travel with low-carbon alternatives and updating to energy-efficient equipment integrates seamlessly into routine business operations.
Regulatory frameworks increasingly emphasise direct emission reductions. The EU Taxonomy prioritises activities that directly contribute to climate change mitigation through the avoidance or reduction of greenhouse gas emissions. Transformation plans must outline how installations will become sustainable, clean, circular, resource-efficient, and climate-neutral by 2050.
Building transparent communication
Decarbonisation-first strategies enable organisations to communicate the degree of environmental performance of their economic activities transparently. This transparency supports the translation of long-term climate transition objectives into tangible business strategies.
When offsetting becomes necessary for residual emissions, maintain complete transparency about methodologies, permanence, and additionality. The key is positioning offsets as a complement, never a substitute for direct emission reductions.
6. Build the case for decarbonisation by modelling its ROI
Financial stakeholders respond to clear return on investment calculations. Building a compelling business case requires modelling ROI factors such as risk mitigation, carbon pricing, access to funding, increased business opportunities, and improved client reputation.
Quantifying financial benefits
Modern decarbonisation platforms enable organisations to model monetary, emissions, and business activity forecasts for different reduction scenarios. Key financial factors to model include:
1. Capital expenditure (capex) requirements for decarbonisation initiatives
2. Operational expenditure savings from energy efficiency and process improvements
3. Net present value (NPV) calculations for long-term investments
4. Payback periods for initiatives like renewable energy transitions and fleet electrification
Organisations implementing comprehensive decarbonisation strategies can understand the potential costs of inaction versus investment in adaptation and mitigation through robust climate risk assessments.
Access to preferential financing
Companies with sustainable business activities benefit from institutional investors, retail investors, and banks interested in green investments. Large banks increasingly offer better interest rates for loans funding sustainable activities, creating direct financial incentives for decarbonisation investments.
Financial institutions committing to align with Paris Agreement goals increasingly use portfolio GHG accounting as the basis for analysing decarbonisation scenarios and setting emission-based targets.
This shift means companies with clear decarbonisation pathways gain competitive access to capital.
7. Engage your suppliers in your decarbonisation journey
Supply chain emissions average 11.4 times larger than direct emissions from operations, making supplier engagement critical for meaningful decarbonisation. As Lena Engel from TÜV Rheinland Consulting emphasises: “Most companies’ emissions originate in their supply chains, especially Scope 3, which can represent up to 75% of their overall footprint.”
Systematic supplier engagement approach
Effective supplier engagement starts with completing a full Scope 3 GHG inventory following the GHG Protocol Corporate Value Chain Standard. This enables ranking suppliers according to their portion of total emissions to achieve the desired Scope 3 coverage.
Beyond emissions impact, consider additional factors when prioritising suppliers:
1. Leverage and influence over suppliers
2. Strategic status within your operations
3. Supplier GHG programme maturity
4. Climate and environmental risk levels
Building collaborative relationships
Successful supplier engagement requires cross-functional support. Include senior leaders, sustainability teams, procurement, compliance, product teams, and finance in your engagement strategy to ensure comprehensive organisational alignment.
Provide suppliers with practical support through capacity-building options including workshops, one-on-one coaching, expert office hours, and e-learning opportunities. Consider financial incentives like better financing terms or faster order payouts to accelerate participation.
Supplier engagement targets should require suppliers to cover specific percentages of emissions to set science-based, aligned Scope 1 and 2 targets at a minimum, with Scope 3 targets if these exceed 40% of their total emissions.
8. Increase the frequency of your emissions monitoring for continuous improvement
Traditional annual reporting cycles create dangerous blind spots in decarbonisation progress. Frequent monitoring helps better assess the effectiveness of decarbonisation efforts and allows for timely strategy adjustments rather than waiting years to understand your position.
Implementing dynamic monitoring systems
Establish monitoring frequencies aligned with emission source characteristics:
1. Continuous monitoring for critical emission points with high variability
2. Monthly tracking of key emission sources to enable timely interventions
3. Quarterly reviews of overall progress against reduction targets
4. Annual comprehensive assessments for formal reporting and compliance
Develop comprehensive monitoring plans that include procedures for collecting data from each GHG source, frequency specifications for each emission source, data quality assessment procedures, and defined responsibilities for measurement and collection.
Showcasing early successes
Regular monitoring enables recognition for early voluntary action and supports showcasing and celebrating early successes to increase company-wide engagement. Document baseline emissions thoroughly to demonstrate genuine improvements, highlight interim achievements in sustainability reports, and use monitoring data to show progress against science-based targets.
Modern carbon accounting platforms provide automated insights and analysis without needing manual prompts, transforming reactive monitoring into proactive management. These systems generate insights to evaluate emissions and plan decarbonisation initiatives while maintaining audit trails and centralised data management for regulatory compliance.
Taking action: Your decarbonisation journey starts now
The path from carbon accounting to meaningful decarbonisation doesn’t require perfection-it requires commitment and systematic execution. Companies that integrate these eight steps will build higher-quality supplier relationships, enhance efficiency and transparency across their value chain, and create credibility with key stakeholder groups, including investors, customers, and employees.
The businesses winning in this transition recognise that proactive supply chain decarbonisation positions companies to lead in sustainability and future-proof their operations rather than waiting for regulatory pressure.
Your decarbonisation journey transforms from an overwhelming challenge to a competitive advantage when supported by the right combination of technology, expertise, and systematic execution. You can get in touch with our partner Plan A to discover how their carbon management platform can accelerate your transition from carbon accounting to measurable decarbonisation impact.
