Fund research and development
There are many areas where the world has yet to figure out how to reduce emissions effectively, affordably and quickly, including aviation, shipping, fertilizers, livestock, steel and cement.
Companies that want to accelerate their path to zero emissions and maximize their impact on climate change must therefore also fund the necessary research, development and scale-up efforts at an early stage, whether through their own R&D departments, external research grants or investments in startups. is. .
Some companies do this in different ways. In 2020, for example, Amazon will have the $2 billion Climate Promise Fund to develop technologies and services that can help it and other companies achieve climate goals. It has invested in companies such as Infinium, which develops renewable electrofuels to clean up aviation; Beta Technologies, a maker of electric vertical take-off and landing aircraft; and CMC Machinery, which manufactures custom boxes for specific products, reducing waste and the need for plastic air cushions.
Each of these investments could potentially help Amazon reduce its materials and emissions while moving massive amounts of products around the world.
Microsoft is running a similar enterprise effort through its $1 billion Climate Innovation Fund.
Go beyond renewable energy credit
One of the largest sources of emissions for most businesses is electricity. But companies generally don’t clean up their power consumption by sourcing carbon-free electricity directly, as most have limited impact on the mix of resources on their local grid.
As a temporary solution, many simply buy renewable energy credits that provide additional revenue for wind, solar, geothermal or other clean energy projects. The basic idea is that the extra support helps build projects so that carbon-free electricity is generated that wouldn’t have happened otherwise. The credits can therefore be set off against the share of the total power consumption of a company that is not clean.
But while these credits can be beneficial in several ways, most notably signaling to utilities that there is a growing demand for clean electricity, it becomes more difficult to argue that they are effectively clearing the power consumption of a company that doesn’t actually have electricity from the plants in it. matter. Such projects often do not even operate on the same grids, or can produce electricity for all the hours that the companies use it.