Listen to Episode One Here!

This episode is the first in our series on setting and achieving net zero carbon goals. What are net zero goals and why are they important for businesses to focus on? How can your company establish a plan to achieve net zero goals and what are the steps needed to get there? Join the Sona team as we talk strategy and tactics for setting and meeting net zero carbon goals across industries.

View the transcript below!

Sona Energy’s approach to helping organizations meet Net-Zero goals

1. Set up a team who: 
   1. Cares
   2. Has budget
   3. Has authority and backing from leadership
      1. If leadership isnt serious, the team isnt serious
2. Rolling energy efficiency program
   1. Define metrics energy efficiency projects need to meet to get approved.  Approve all energy efficiency projects that meet those metrics.  
   2. Don’t stop – continuous commissioning
3. On-site renewable energy
   1. Capital purchase or Power Purchase Agreement (PPA)
4. RECs / virtual PPA (vPPA)
   1. Remember Additionality
      1. Nuclear RECs…that Nuclear power plant was built decades ago…before RECs were even a concept.  RECs did NOT support the creation of the renewable power source; therefore, RECs from this source aren’t really doing anything
5. Annual review of progress, set new goals, continuous improvement

Show Notes:

Science Based Targets Initiative

https://sciencebasedtargets.org/

https://sciencebasedtargets.org/resources/files/Net-Zero-Standard.pdf

Greenwashing through Climate Goals

Page 35 of this report from Science Based Targets initiative: ​​

“2021 was also a year of renewed scrutiny and skepticism over corporate climate action. Greenwashing by some corporate actors, including a proliferation of net-zero pledges that are not always backed by robust science-based decarbonization plans, has undermined public trust and the credibility of private sector claims. Based on the UN Global Compact-Accenture CEO Study, 57% of CEOs believe they are making sufficient efforts to limit the global rise in temperature to 1.5°C. Yet, only 2% of these CEOs have validated their science-based targets in line with a 1.5°C trajectory.“

Scope 1,2,3 Emissions

https://www2.deloitte.com/uk/en/focus/climate-change/zero-in-on-scope-1-2-and-3-emissions.html

• Scope 1 emissions— This one covers the Green House Gas (GHG) emissions that a company makes directly — for example while running its boilers and vehicles.

• Scope 2 emissions — These are the emissions it makes indirectly – like when the electricity or energy it buys for heating and cooling buildings, is being produced on its behalf.
• Scope 3 emissions — Now here’s where it gets tricky. In this category go all the emissions associated, not with the company itself, but that the organization is indirectly responsible for, up and down its value chain. For example, from buying products from its suppliers, and from its products when customers use them. Emissions-wise, Scope 3 is nearly always the big one.

Other Links: 

https://www.spglobal.com/esg/insights/problematic-corporate-purchases-of-clean-energy-credits-threaten-net-zero-goals

https://www.bloomberg.com/graphics/2022-carbon-offsets-renewable-energy/

Podcast Transcript

The Clean Energy Chronicles with Sona Energy Solutions – Episode 1

JS: Hello and welcome to The Clean Energy Chronicles with Sona Energy Solutions. My name is Julia Segal, Marketing Associate at Sona Energy, and I’m also here today with Eric Arroyo, Sona’s VP of National Accounts.

EA: Hey, Julia. Hey everyone. My name is Eric Arroyo, and we are excited to kick off our podcast series on all things clean energy.

JS: Today’s episode is the first in our series on setting and achieving net zero carbon goals. Net Zero goals are the commitments by many countries, cities, businesses, and institutions to reach net zero greenhouse gas emissions. Eric, why are these goals important to focus on right now?

EA: Well, transitioning to net zero is no small feat. To lessen the impacts of climate change and preserve our planet as livable and safe, global temperature levels need to be stabilized.

JS: And for the companies setting these goals, they’re contributing to the net zero model. Companies and organizations cannot technically be net zero themselves, but essentially the strategies they develop and the targets they set contribute to the larger, global net zero goals.

EA: Yeah Julia, the term greenwashing is thrown around and I think that’s what you’re getting at. Greenwashing is when a company makes a misleading claim that their products and services are helping the environment, or that their practices are sustainable, when in reality, they’re not. It’s a marketing tactic to make a profit.

JS: Yeah, and it’s definitely important to distinguish between the companies who are actually making climate strides and taking action.

EA: Vodafone, Coca Cola and Microsoft are a few of the companies taking the lead and pledging to be net zero. Vodafone is committing to be net zero for their own operations by 2030 and to eliminate all scope three emissions by 2040. Coca Cola has similar net zero emission goals and Microsoft has an ambitious plan to be completely carbon negative by 2030 and by 2050, will remove all of the carbon the company’s emitted in the environment since it was founded in 1975. These companies outline that the purpose of these goals is to improve energy efficiency and renewable energy supply, and also support socioeconomic development in their communities.

JS: These are definitely hefty goals, but what these companies are doing well is they’re clearly outlining their approach. They’re publicly describing the steps that they’re taking and why they’re taking them.

EA: Yeah, and being clear on purpose is important and just one part of the equation for companies looking to pledge a net zero commitment. Now we’re going to bring in Sona’s VP of Business Operations, Chris Kaiser, to talk strategy for meeting these goals.

JS: Hey, Chris, thanks for hopping on. Can you talk a bit about how companies can start taking the steps towards meeting net zero goals?

CK: Sure, thanks for having me. There’s several steps a company needs to set up a team in order to set net zero goals. And then there’s a strategy that team can work towards in order to achieve the goals. So the first step is really setting up a team that cares about reaching a goal, that has budget authority, and has backing from leadership in order to meet those goals. Without strong leadership backing, then net zero goals can really turn into just greenwashing.

After a team has established, the popular strategy is starting with energy efficiency, because you always want to reduce a company’s energy before they can move on to more ambitious targets, such as renewable energy. Renewable energy can be achieved by doing it on site where they’re installing things like solar PV on their property. And that can either be on a company’s roof or on a parking canopy in their parking lot, or in land that is adjacent to company’s property.

If a company doesn’t have adequate property or access, or is not in the right geography to make renewable energy achievable on their own site, the companies can then look at things like renewable energy credits, power purchase agreements, or virtual power purchase agreements to achieve renewable energy attributes that can count toward their net zero goals.

So we see a combination of energy efficiency and their own facilities, and then renewable energy either at their facility or off site through a combination of a different structure that can give them renewable energy attributes. Once they’ve targeted the energy efficiency and the renewable energy aspects, they want to implement those projects. And then after implementing those projects, at the end, do a summary, then review, revisit the success of those projects and continue to set ambitious goals that they’ve met the goal or continuing every year to see what other projects both on the energy efficiency side, and then the renewable energy side they can implement to achieve their goals.

JS: That’s great. I mean, I think a lot of what you’re saying too, is how important it is for these companies to be establishing these goals and systems for themselves from the start, and especially that the leadership is in place to really kind of be pushing that forward. Is there any strategy along the way for these companies to know if they’re kind of on target with their net zero goals?

CK: Yeah, a big aspect of all this is figuring out how they’re going to track this progress. There’s a lot of initiatives out there. One of them is science-based targets initiative. And they really have a great roadmap for just how companies can track energy consumption data, energy efficiency data, and then things like renewable energy, because tracking, it becomes a job in and of itself. So the scientific target initiative is a great resource and we can post some other resources in the podcast notes on our website to give some tools out on how companies can just track and report on the data that they’re collecting and goals that they’re trying to target.

JS: And, wondering if you could also speak a bit to where you see any errors with certain companies in trying to set these goals for themselves. Any flaws with where they’re going wrong?

CK: Sure. Yeah, I could, we could probably write a book on the topic or create a podcast series just on this item in and of itself. But I think what Eric touched on with greenwashing is really a symptom of the disease, right, and the disease is, leadership at these companies know that they often have to do something to appease either their investors or their customers, so they just try to do a quick and dirty approach to achieving net zero. And that’s what ultimately ends to greenwashing.

It really starts with leadership, setting up a team that has authority and preferably budget to actually implement the project and the strategy and tactics on how to achieve those goals. Because without the backing of leadership, and without a strong interior team, none of the rest really matters.

Outside from getting the team right, ensuring that that team has the technical resources in order to achieve those goals, whether they’re going to be internal or often, they’re going to have to hire consultants and project engineers and companies that can help them implement these projects, or help them procure renewable energy in the marketplace is a very important aspect. And oftentimes, it’s not just one company that this net zero team is going to work with, they’re probably going to have a group of companies that are going to help them achieve these goals. So setting up the team, and then making sure that that team has the technical resources is two of the most important aspects of achieving these goals.

And then finally, what I’ll say, setting continuous improvement as an ongoing principle in that, you know, sometimes companies might set unambitious goals because they know they can hit them. And then they hit them and they, you know, might say, oh, great, hey, we’re done, look. You know, they’ll do a splashy marketing campaign, and pat themselves on the back. But the reality is that their goals probably weren’t ambitious enough to begin with. So if a company reaches its goals early, well, they’re not done. They need to set more ambitious goals for the future and have a culture and strategy of continuous improvement, to always make sure they’re reaching their goals, and then exceeding their goals and then setting new goals.

JS: And I think some of these resources that you mentioned earlier really help with establishing what those goals should be and kind of walking these companies through how many years they should be looking ahead into these sort of projects. How do you find that the standards for setting certain goals vary by industry? How are some of these companies determining what their net zero goal should look like?

CK: Yeah, that’s a great question. Going back to the science-based targeting initiatives, they talk a lot about, and Eric touched on earlier, scope one, two and three emissions. And it’s a little bit outside the scope, no pun intended, of this podcast to get into the difference between scope one, two, and three. But it basically goes into where in a company’s lifecycle or impact do they want to focus on? Is it just their facilities? Is it their entire supply chain? And how far do you go into that supply chain? You know, if you’re a company that makes bread, are you going into the farmers in the field that are growing the wheat? And then are you going all the way into the stores that are selling the bread and are you looking at all the emissions associated with that entire supply chain of the bread? Or do you only want to focus first on your own company facilities, so that your own bakeries, where you can have the most direct impact and then, over time, you know, maybe it’s a different goal, you look at the further supply chain. So really making sure you can define the scope of what the company wants to focus on, and then expand or contract from there. For someone interested in the topic and diving in a little bit more, just research, you can Google scope one, two, three, emissions, also on the science-based target initiative website, they have some great information into the scope one, two, three emissions, and how to incorporate those in defining the goal.

JS: You mentioned some different offsite renewable strategies. Can you talk a bit more about those?

CK: Sure. So if a company can’t do renewable energy on site, and most companies can’t, or the amount of renewable energy they can do on site is small in comparison to their total energy consumption, they’re going to look to off-site strategies. And I mentioned a couple renewable energy credits also known as RECs, power purchase agreements, PPAs or VPPAs, which are virtual power purchase agreements.

So this is another very large topic that we’re probably going to future episodes be diving into. But I can just talk briefly on the renewable energy credits because I know a lot of companies today are relying on those to meet their net zero goals. And a pitfall that we all often talk about and we notice that companies are doing, is buying RECs that may or may not have additionality. And so additionality is this concept of are the RECs that a company is purchasing, resulting in additional renewable energy assets coming online on the grid.

So for instance, if a wind power plant was built in Texas 20 years ago, and someone sets a net zero goal, you know, this year, and then next year in order to meet that goal, they buy renewable energy credits from that wind power plant in Texas, regardless of where their company operations are, are they really incentivizing action to add more renewable energy on the grid? And I think most people who study this topic will say, well, no, that that wind power plant was built a long time in the past. So the RECs that that are spinning off from that wind power plant aren’t really incentivizing more renewable energy. So we’ll put more information on our website in the podcast notes and we’ll spend future podcast episodes digging a little bit more into this. But you know, when we work with our customers, who might have net zero goals, or just want to do more to save energy, or produce more renewable energy, we always advise them to make sure that their actions are actually incentivizing projects, they’re actually going to make a difference, and reduce carbon emissions or greenhouse gas emissions or whatever that they’re trying to achieve. So great topic for next time but if someone’s interested in this topic, you could start by googling renewable energy credits, and additionality and that’ll kind of start leading them down the rabbit hole on some of this topic and then we’re going to cover this topic on future episodes.

JS: Alright, thanks so much, Chris. And thanks, Eric. That’s all for today’s episode. Thank you for tuning in. And be sure to check out our website for those resources and also the transcript from today, www.sonaenergy.com. And we’ll also have the episode link up on our LinkedIn page. So make sure to follow along and stay tuned for the next in our series. We’ll see you next time!