Organizational Governance

Climate Action Plans:
How Do We Know If We’re Making Real Progress?

In our experience, it’s challenging to proceed from knowing your company’s emissions profile to crafting a climate action plan to reduce it. Successful companies will adopt the right mix of strategies for them — which is where the bigger challenge comes in.

Sponsored Content | / This article is sponsored by Cuningham | By Paul C. Hutton | Published 2 years ago | About a 7 minute read

A climate action plan (CAP) is a set of strategies that guide efforts for climate-change mitigation. Many CAPs have recently been developed by cities, states, nations, companies and organizations. In fact, the Zero Energy Project currently lists 414 cities and counties as having such plans.

Despite these numerous commitments, the global greenhouse gas (GHG) emissions picture is alarming. After a 5.8 percent decline in 2020 due to COVID, GHG rebounded 4.8 percent in 2021, leaving us almost exactly where we were. With further growth in GHG emissions in 2022, we will reach yet another all-time high and the planet will be heading for climate catastrophe. How do CAPs relate to design of the built environment, and are they a useful tool in achieving real GHG reductions?

The City of Denver, where I work, adopted a CAP in 2018. The City’s goals are 40 percent GHG emissions reduction by 2025, 65 percent reduction by 2030, and 100 percent by 2040. Denver has chosen to concentrate on four priorities:

Optimizing energy efficiency in buildings
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Decarbonizing the electricity grid
Enabling next-generation mobility
Improving waste management

The largest-scale governmental entity of all, the UN Secretariat, published its CAP in September 2019. The plan commits the organization to ongoing climate neutrality for its global operations. Its three priorities are intensification of existing efforts, innovation and outreach.

The American Institute of Architects (AIA), of which I’m a member, declared an urgent climate imperative for carbon reduction in July 2020. As the largest design-focused organization in the world, the AIA has established three clear, simple goals for its members:

Mitigating the sources — Establish the relevance and importance of the building sector and architectural practice in climate mitigation solutions
Adapting to the impacts — Design buildings and communities to anticipate and adapt to the evolving challenge of climate change
Catalyzing architects to act — Lead meaningful change and contribute to climate solutions in partnership with our global community

Cities, states, countries and other governmental organizations are not alone in adopting CAPs; private companies and publicly held corporations have kept up. It is hard to find a company that does not have stated goals around environment, climate or carbon emissions. Fewer companies, however, have fully developed CAPs — especially those using science-based targets. And many that do have CAPs struggle to make serious reductions in their actual GHG emissions, as opposed to simply buying offsets.

Starting with measurement and assessment

Most CAPs start with an objective review of GHG emissions, subdivided into the now well-understood Scopes 1, 2, and 3. A brief recap of the Scopes is:

1 – GHG emissions directly from operations that are owned or controlled by the reporting company
2 – Indirect GHG emissions from the generation of purchased or acquired electricity, steam, heating, or cooling consumed by the reporting company
3 – All indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions.

Most companies measure and seek to reduce their scopes 1 and 2. For typical companies, the majority of scope 1 emissions will be natural gas used in buildings or fuel for vehicles. The majority of scope 2 emissions is typically electricity used in buildings. The key word in the scope 1 definition is “control.”

To what extent do reporting companies that are tenants in a commercial building control the use of natural gas for space and water heating? They may be able to change thermostat settings or reduce hot water use; but they do not select and maintain the equipment that burns that gas, nor do they design the walls and windows of that building that determine heat loss. A reporting company that seeks to reduce its scope 1 but does not own its own buildings has limited influence. The best option in that case may be to request utility data when leases are being negotiated and seek buildings with more efficient operations.

Once a company has completed a GHG assessment, the more challenging concern is which targets to set and how to achieve them. Most companies align their targets with one or more national or international standards and usually seek to achieve them by the end of a decade. A well-known corporate goal is Microsoft’s ambition to be carbon negative — including offsetting all of its past emissions — by 2030.

Science-based targets

The Science Based Targets initiative (SBTi) is an independent organization that assists the private sector by setting and achieving science-based GHG emissions reductions. Its partners include the UN Global Compact, the World Resources Institute, World Wildlife Fund, and the CDP. SBTi offers guidance to companies based on the size of the organization and the type of the business. For large companies with a significant global impact, this is a great option to consider. Smaller companies may not find the SBTi a good fit — opting instead for a simpler approach in which they calculate their own Scopes 1, 2, and 3 GHG emissions; or hire a consultant to assist them in this task, and then set their own targets.

Fortunately, standards for GHG emissions calculations are well-established and many consultants offer such services. In our experience, the tougher challenge is how to proceed from knowing the emissions profile to crafting a CAP to reduce them. Companies can develop strategies to reduce their Scope 1 and 2 emissions over time, and many are doing so.

Scope 3 challenges

Scope 3 is more difficult because it is not under the company’s direct control. Scope 3 emissions are typically generated by a company’s suppliers through its use of goods and services from other companies. Examples are air travel, cleaning supplies and merchandise. One company’s Scope 3 emissions are another company’s Scope 1 and 2. Scope 3 is important because these emissions can represent as much as 80 percent of a company’s total GHGs.

Companies with significant clout, such as Walmart, can exert pressure on suppliers to reduce their emissions and thus their own Scope 3 emissions; but most smaller players lack the leverage to effect such change. Smaller companies should ask potential vendors for emissions profiles and select them based on this criteria. Over time, this approach — if adopted by enough companies — will reduce global emissions through the power of the “invisible hand” of the market.

Cuningham’s experience

At Cuningham, we have been calculating our Scopes 1 and 2 — and much of our Scope 3 emissions — since 2018. We saw it fall dramatically during COVID and are estimating the degree to which it will increase again in 2022. In this timeframe, we have implemented minor reductions and offsets. We expect our GHG emissions to stabilize at approximately 3.66 metric tons CO2e per employee per year. The chart below illustrates the GHG drop due to COVID and our expected rebound.

Our science-based target is to reduce our emissions from that 2022 benchmark year over year until we reach net-zero carbon for our internal operations by 2030 — we believe that is the latest year to reach net zero that provides a realistic chance of limiting global temperature rise. We need to reduce our footprint by 12.5 percent per year until 2030. Key strategies in this effort will be:

Reduce leased office space and seek space in net-zero energy buildings
Limit travel to jobsite and client meetings, using virtual platforms
Continue trend toward paperless offices
Work with transportation providers in the airline, rental car, and rideshare sectors that offer zero-carbon options
Incentivize employees to utilize public transit or zero-carbon transportation options

Even as we reduce GHG emissions from internal operations, we will use offsets to reduce our carbon footprint more rapidly. Offsets are complicated and controversial; there is much concern that over-reliance on offsets leads to lack of real progress. We recommend companies carefully consider the options. After much research, Cuningham is pursuing this blend of offsets to reach net-zero carbon impact sooner than 2030:

Airline offsets for air travel
Uber Green and/or Lyft for rideshare services
National Car Rental LEV use
Planting trees at our project sites to offset paper use
Installing solar panels at our projects to offset office utility use
Investing in a reputable offset company such as Climate Vault for remaining GHGs.

Cuningham will monitor the effectiveness of each of these reduction and offset strategies and refine our CAP every year. We strongly believe that we can achieve net-zero carbon for our internal operations well before 2030, and remain hopeful to make it happen sooner.