Decarbonization: Your Company’s Roadmap to Reducing Emissions

The term decarbonization is a fundamental shift in how companies manage operations and climate impact. As more companies target net-zero, understanding and applying decarbonization strategies is now expected.

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This guide covers what decarbonization means, why it matters, and the practical steps and real examples that help companies lower emissions and stay competitive.

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What is decarbonization? Defining the core concept

Decarbonization is the process of reducing and ultimately eliminating carbon dioxide and other greenhouse gas emissions in company operations.

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At a company level, this means moving away from carbon-heavy materials and processes and switching to renewable sources.

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Decarbonization means making tangible changes, cutting fossil fuels, changing how products are made, and shrinking your company’s carbon footprint. Whether you see the term spelled “decarbonisation” or “decarbonization,” the goal is the same: significant carbon reduction in the value chain.

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True decarbonization is about real, permanent emission reductions, not simply offsetting. It requires meaningful shifts in how a company operates and makes decisions.

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Why decarbonization matters for your company

Decarbonization is now a business requirement, not just a sustainability goal. Key reasons include:

• Regulatory requirements: Governments are rolling out strict climate rules and carbon pricing. Proactive decarbonization keeps your company compliant and avoids penalties.
• Cost savings: Energy efficiency and renewables reduce operational costs and offer stable, long-term energy prices.
• Competitive advantage: Companies with clear climate strategies attract better customers, partners, and talent.
• Risk reduction: Cutting emissions reduces risks from supply chain disruptions, weather extremes, and shifts in demand.
• Investor trust: Clear decarbonization plans attract investors focused on long-term value.
• Innovation: Decarbonization often leads to new products, services, and more resilient processes.
  
  

How to achieve company decarbonization: A practical guide

Embarking on a decarbonization journey requires a structured approach. Here are key steps your company can take:

1. Measure Your Carbon Footprint: You can't manage what you don't measure. The first step is a comprehensive assessment of your company's emissions across Scope 1 (direct emissions from owned sources), Scope 2 (indirect emissions from purchased energy), and Scope 3 (all other indirect emissions in your value chain). Accurate carbon data is the foundation of any effective climate strategy.
2. Set Clear and Ambitious Targets: Once you understand your emissions profile, establish science-based targets (SBTs) for reduction. These targets should align with global climate goals (e.g., limiting warming to 1.5°C) and include both short-term milestones and long-term net-zero ambitions.
3. Prioritize Energy Efficiency: Implement measures to reduce overall energy consumption. This can include upgrading to energy-efficient equipment, optimizing building management systems (heating, ventilation, air conditioning), and improving industrial processes.
4. Transition to Renewable Energy: Shift your energy sources from fossil fuels to renewables like solar, wind, and hydropower. This can be achieved through on-site generation, power purchase agreements (PPAs), or purchasing renewable energy certificates (RECs).
5. Electrify Operations: Replace fossil fuel-powered equipment and processes with electric alternatives, provided the electricity is sourced from renewable or low-carbon sources. This includes electrifying vehicle fleets, industrial heating, and machinery.
6. Innovate Processes and Materials: For many industries, decarbonization requires innovation in manufacturing processes and the adoption of low-carbon materials. This might involve exploring alternative raw materials, redesigning products for lower lifecycle emissions, or implementing carbon capture technologies where emissions are hard to abate. See all the ways to decarbonize your product's carbon footprint.
7. Engage Your Supply Chain (Scope 3): For most companies, a significant portion of emissions lies within their supply chain (Scope 3). Collaborate with your suppliers to encourage them to measure and reduce their own emissions. Set sustainable procurement standards and work together on shared reduction goals.
8. Consider Carbon Removals (with caution): After exhausting all avenues for direct emission reductions, high-quality carbon removals can be considered to neutralize any unavoidable residual emissions. However, this should be a last resort and not a substitute for deep decarbonization efforts.

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Company decarbonization examples in action

Many companies are already making significant strides in their decarbonization efforts, offering valuable insights:

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Crocs, Inc

Crocs, Inc. partnered with Arbor to reduce the carbon footprint of their classic clog. Faced with the challenge of reducing carbon emissions in a measurable and verifiable way, Crocs, Inc. sought Arbor's expertise.

1. Arbor helped Crocs compare two of their shoes using comparable CFPs (Carbon Footprint of a Product), which were verified against ISO 14067. Using the Arbor Platform, we broke industry records in only 3 days for full carbon measurement and third-party verification in 1.5 days, allowing Crocs to focus more of their resources on reducing their overall GHG impact.
2. The analysis found that because of investments in sustainable materials, Crocs was able to reduce the CFP by 6%, leading to a 3% reduction in absolute emissions in their total inventory compared to a "business as usual" scenario.
3. Now, Crocs is using the Arbor platform to accelerate the net-zero impact of their products and, as a result, their organization. They are doing this by prototyping products in Arbor's platform to test the ROI of several of the options in this blog. This allows them to make the most effective decisions to decarbonize their entire supply chain and avoid making investments that don't move the needle.

Microsoft

Aims to be carbon negative by 2030, investing heavily in renewable energy, sustainable operations, and carbon removal technologies. They also implemented an internal carbon fee to drive accountability.

General Motors

Committed to carbon neutrality in its global products and operations by 2040, focusing on transitioning to electric vehicles and sourcing renewable energy for its manufacturing facilities.

Honeywell

Striving for carbon neutrality in its operations and facilities by 2035, having already achieved substantial emission reductions through energy efficiency projects and a commitment to renewable energy.

Alphabet (Google)

Has been carbon neutral since 2007 through high-quality offsets and aims for 24/7 carbon-free energy for all its data centers and campuses by 2030. They've also offset their entire historical carbon footprint.

Cemex

A major cement manufacturer is tackling emissions in a hard-to-abate sector by launching net-zero CO2 concrete (Vertua) and investing in carbon capture technologies.

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These company decarbonization examples illustrate that while paths may vary, a combination of strategic planning, innovation, and commitment can lead to significant emission reductions.

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Overcoming challenges in your decarbonization journey

While the benefits are clear, companies may face challenges:

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• Complexity of Scope 3 Emissions: Measuring and influencing emissions across a vast supply chain can be complex and require significant collaboration.
• Upfront Investment: Some decarbonization technologies and infrastructure changes require initial capital investment, though many offer long-term savings.
• Technological Maturity: For certain hard-to-abate sectors, some low-carbon technologies are still developing or scaling.
• Data Collection and Accuracy: Gathering comprehensive and accurate emissions data across all operations can be demanding.
• Navigating Compliance and Reporting: Keeping up with evolving reporting standards (like GRI or ISO requirements) and regulations needs attention.

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How Arbor can power your company’s decarbonization strategy

Successfully navigating the path to decarbonization requires robust tools and accurate data.

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Arbor is a carbon accounting platform that helps companies calculate and reduce emissions to reach net-zero.

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Here’s how Arbor supports your decarbonization efforts:

• Comprehensive Emissions Measurement: Arbor enables accurate calculation of your company’s carbon footprint across Scope 1, 2, and 3 emissions. Our platform also automates Product Carbon Footprinting (PCF), providing detailed insights into the lifecycle emissions of your goods.
• Actionable Insights: With features like Hotspot Analysis, Arbor pinpoints the primary sources of emissions within your operations and value chain. Our Prototyping capabilities allow you to model the impact of different design choices and material selections to strategically reduce your product's carbon footprint.
• Data You Can Trust: Arbor provides industry-leading, audit-grade carbon data. Our methodologies align with global standards like the GHG Protocol and ISO standards (14040, 14044, 14064, 14067).
• Streamlined Compliance: Arbor is a GRI-certified platform, simplifying your sustainability reporting and helping you meet evolving regulatory requirements with confidence.
• Scalable Solutions: Whether you have a few products or thousands of SKUs, Arbor’s platform is designed to handle complex data efficiently, helping your company make informed decisions for impactful decarbonization.

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Taking the next step towards a decarbonized future

Decarbonization is a clear path to sustainability, resilience, and a competitive edge. Start by measuring your company’s impact and setting practical, science-based goals.

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Use carbon data and collaborate across your supply chain for meaningful, lasting reductions.

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Ready to measure your emissions and accelerate progress?

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Measure your emissions with Arbor.

Talk to a carbon expert

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