In 1970, people thought that by 2020 we would have flying cars. There are many reasons why this prediction didn’t come true. One of which is how we, as business folk and as a society, navigate climate change.

How we balance new technology with environmental responsibility will greatly influence our lives and those of future generations – and it matters more than the eye can see. The communities whose resources we all rely on are becoming more and more vulnerable – we need to urgently redefine human progress.

If you are in the flying car business – or any business – climate change affects you. Any business decision you make can leave a long-lasting, even permanent, footprint on the planet.

A strong sustainability plan not only boosts stakeholder confidence in your company – it can be the single most important thing you do to ensure you have a business in 10 years’ time. It’s not just about complying with environmental laws – it’s the foundation for sustainable growth, sound risk management, and long-term business resilience.

But it generates short-term gains, too. An increasing number of investors are more likely to fund a business with a solid sustainability plan compared to a business without one. It attracts new customers, gives you a competitive edge, and opens up a myriad of other benefits.

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What is a carbon reduction plan?

A carbon reduction plan is a strategy for companies to lower their carbon footprint, aligning with broader objectives to combat GHG emissions. These plans outline how to move from current energy use and emissions to a more sustainable future, aiming for net-zero emissions. The process starts with analysing current emissions to set a baseline for measuring progress.

Contents of a Carbon Reduction Plan – what is in a carbon reduction plan?

1. Commitment Declaration: This is a statement where the organisation commits to reaching net-zero emissions, including a target year for when they aim to achieve it.
2. Baseline Emissions Footprint: This is a calculation of the organisation’s current carbon footprint. It serves as a benchmark to measure future progress. To design your carbon reduction strategy and roadmap, you need to choose a baseline year (or period) to act as your reference point against which future emissions are measured. This is typically the latest and most recent ‘complete’ year, complete meaning where you have the most data. This is useful, because it allows comparison when you frame your targets.
3. Current Emissions Report: This report shows the organisation’s emissions for the most recent year. It needs to be updated and calculated within the last 12 months.
4. Emissions Reduction Targets: This includes specific goals for reducing emissions over the next five years, along with updates on how they are progressing toward previous targets.
5. Carbon Reduction Projects: This section lists the projects the organisation has already completed and those they plan to implement in the future. It can include environmental management practices such as energy efficiency improvements, waste management and recycling programs, sustainable procurement, and others.
6. Declaration and Sign-Off: Finally, a director must sign off on the plan to show it’s been officially internally approved.

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Why a carbon reduction plan matters

Achieving an 80% reduction in GHG emissions by 2050 is a significant challenge even for businesses in the UK committed to net zero. To tackle this, they’ll need a solid carbon reduction plan. This not only aligns with national goals but also reduces operational costs by cutting down on energy use.

For companies that produce a lot of carbon, it’s even more critical because of penalties for non-compliance. A good plan includes:

• A clear commitment to net-zero emissions.
• Detailed reporting of current emissions.
• Ambitious targets for reducing emissions aligned with scientific evidence.

Being committed to sustainability is now a must for securing major government contracts in the UK where businesses must comply with the Procurement Policy Note 06/21 (PPN 06/21). To compete for large government contracts, businesses must submit a carbon reduction plan for contracts over £5 million.

This rule requires public sector suppliers to aim for net-zero and explain their plans in a detailed Carbon Reduction Plan (CRP). If a company doesn’t have this, it’s excluded from the bidding process.

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Benefits of having a carbon reduction plan

No business exists in a vacuum. Think of a carbon reduction plan as a health check for your business. Au audit, if you like, of how likely you are to do well in the future considering macro-environmental factors. By placing sustainability as a core value, you invest in the long-term health of your business. Among other things, becoming more sustainable is about business efficiency – for example by making your operations more energy-efficient, embracing renewable energy, and fine-tuning your transportation logistics. These steps are key for cutting down carbon emissions and confidently moving toward net-zero goals.

Benefits of a Carbon Reduction Plan

1. Cost Savings: Using less energy means lower utility bills.
2. Cost Avoidance: Avoiding regulatory sanctions by ensuring compliance with laws and aligning to industry best practice.
3. Sustainability: Reducing carbon emissions helps improve the company’s environmental impact.
4. Compliance: Makes it easier to meet the reporting standards and legal requirements for major government contracts.
5. Corporate Reputation: Shows responsibility and improves public and shareholder perception.
6. Innovation: Encourages technological advancements and operational improvements.

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Key components of a carbon reduction plan

Carbon footprint analysis

Carbon footprint analysis is the lynchpin that anchors the carbon reduction plan. It captures critical data on Scope 1, Scope 2, and a selection of Scope 3 emissions—ranging from business travel to waste disposal from operations. For professional service businesses in the UK, certain Scope 3 categories may be non-applicable and, as such, should be documented and justified in the analysis.

It should not come as a surprise that emission reductions should come before considering carbon offsetting. Carbon offsetting should be used as the last strategy only for those emissions you can’t remove, reduce or capture. As a business, you have the responsibility to ensure the calculation of your carbon footprint is clear and transparent.

Carbon reduction targets

When setting targets you need to make sure you set clear, measurable, and achievable emission reduction targets – both neat-term and long-term – acknowledging the pressing need to curb GHG emissions immediately. These targets are integral components of a credible carbon reduction plan, supported by base calculations.

And as we talk about sustainability, public transparency and accurate monitoring are key to demonstrating commitment and progress to stakeholders.

Monitoring and reporting mechanisms

Monitoring and reporting mechanisms are the backbone of the accountability of your carbon reduction plan. Emissions need to be reported and recorded, adhering to specific science-backed protocols like the GHG Reporting Protocol. Scope 1 and Scope 2 emissions reporting is mandatory under Streamlined Energy and Carbon Reporting (SECR) requirements, while Scope 3 emissions reporting follows the Corporate Value Chain Standard.

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Should I validate my carbon reduction plan and targets?

Short answer – yes.

While you don’t have to follow external standards or get verified by outside schemes, using frameworks like the Science-Based Targets Initiative (SBTi) or the 17 UN Sustainability Development Goals (UNSDGs) can make your plan more credible and effective. External validation by an independent third party comes with additional business benefits like a significant boost in brand equity.

Your plan needs to be reviewed by the Board of directors or an equivalent management body. This ensures it is truly integrated into the organisation’s decision-making.

Plus, as we learned, public procurement rules like the Procurement Policy Note 06/21 require suppliers to evidence their commitment to reaching Net Zero by 2050. This includes publishing a credible Carbon Reduction Plan if they want to be in the running for major government contracts.

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Commitment to achieving net zero

A Carbon Reduction Plan is intrinsically tied to an organisation’s unwavering commitment to achieving net zero emissions. A commitment to net-zero emissions involves energy efficiency improvements, renewable energy investments, and transforming transportation frameworks among others. This not only meets compliance requirements but also enhances operational efficiency – and a more efficient business is a more profitable one.

Adopting ambitious carbon reduction targets, manifested through initiatives like renewable energy installations and switching to hybrid electric vehicles, directly addresses the urgent need to lower carbon outputs. Companies can gain a lot by fully committing to net zero emissions—not only in tangible cost savings, but also by playing a big part in reaching global environmental sustainability goals.

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Implementation of carbon reduction projects

Carbon reduction projects are action-oriented and strategically designed to deliver consistent GHG emissions reductions annually, steering the course towards Net Zero emissions by 2050. These projects are varied. They are targeting Scope 1, 2, and 3 emissions, and are anchored to specific milestone dates such as 2028, 2035, and 2040.

How does that look like? Actions may include region-specific measures, like normalising gas usage to the benchmarks established in metropolitans like London and Birmingham. In this sense, active carbon reduction projects signal an organisation’s commitment to meeting aggressive targets. And further- it shows the organisation recognises the severity and immediacy of the climate crisis.

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How to prioritise and deliver carbon reduction projects?

It all starts with a plan. But in a market where everyone from customers to suppliers increasingly prefers to work with sustainable businesses, what is far more valuable is having a proven track record of CSR.

Need help delivering a project or implementing a new policy? Our team of expert consultants will help measure, define and action your green projects shoulder-to-shoulder with you, maximising benefits along the way.

If you need to quickly rescue a failing project, we can get you back on track. Reach out and progress fast on your net-zero journey.