Today, stakeholders demand enterprises reduce carbon emissions and become more sustainable. Soon, however, reducing carbon emissions will no longer be something enterprises do to delight investors or meet customers’ standards – it will be required by law.
So, how do enterprises set, reach, and measure emissions goals to reduce their environmental footprint? To discuss the enterprise movement toward net zero carbon emissions, Zayo Director of ESG & Sustainability Sondra Smith joined Elizabeth Hunter, Director of ESG & Social Impact at Ciena, and John Gomes, Partner at Bain & Company on a recent Zayo-hosted webinar moderated by Zayo Vice President of Technology Aaron Werley. Read on for insights from the discussion.
Understanding Net Zero Emissions
The first step to reducing emissions and becoming more sustainable is to treat sustainability as a critical component of day-to-day operations instead of an afterthought. “I see sustainability as a lens with which you can do business,” Hunter shares during the webinar, “It shouldn’t be an add-on.”
To strive toward net zero emissions, it’s important to first establish what “net zero emissions” means.
Net zero emissions is the current gold standard of emissions target-setting that requires companies to take operational initiatives to reduce emissions to reach science-based targets without the aid of market instruments like carbon offsets.
Companies like Ciena and Zayo set science-based targets – goals aligning with the Paris Agreement goal to keep global warming to 1.5 to 2 degrees Celcius from pre-industrial levels – that align with the three emissions scopes.
Scope 1 emissions are direct emissions that come from things your organization can directly control. For example, emissions from your company’s vehicle fleet. Scope 2 emissions are emissions from the energy you buy and consume. For example, the electricity you purchase to light your office buildings. Scope 3 emissions are the furthest from your organization’s control – indirect emissions from the suppliers you use and the consumers of your products. For example, the emissions from the manufacturing processes of your suppliers.
Gaining an understanding of your emissions from each scope is step one in working toward a net-zero emissions goal.
[Watch the Webinar: Toward a Sustainable Future: Net Zero by 2030]
How to Measure Emissions
Now that you have an understanding of where your emissions may come from, it’s time to measure them. While this is no simple task, building this muscle today will put you in a more competitive position later when regulations demand compliance.
“Today’s organizations are not structured to measure emissions,” John Gomes explains, “We have mechanisms to measure financial data and performance data, but not emissions.”
As a result, methods for measuring emissions often involve piecing together disparate parts of a complex puzzle, sometimes making estimates to fill in the gaps.
Smith suggests companies start with what data they have on hand. It’s easiest to start measurements with scopes 1 and 2 because these measurements are the easiest to track down. However, the process is still fairly manual, involving calculations for even the easiest-to-gather data points. Utility bills, the number of offices, warehouses, ILAs, and the distance traveled by fleet all factor into the emissions equation.
In the long term, Gomes hopes the stopgap emissions calculation solutions in place today will be replaced by automated measurement tools like sensors on vehicles to measure the fuel used and the emissions associated with the consumption. “The thinking is we’ll have mechanics to measure emissions directly,” Gomes shares.
For now, internal and external partnerships are the key to measuring emissions as accurately as possible. “It’s a lot of work to do all this measurement,” Hunter explains, “You’re going to need friends in your organization to help you with this.”
Ciena in particular has established environmental steering committees to understand the sources of emissions from various aspects of its footprint – things like e-waste, office waste, on-site emissions, and electricity. This breakdown makes measuring emissions more manageable for Ciena. Hunter also suggests building relationships with your finance and data reporting teams to make sense of the data and validate it once you’ve gathered it.
Partnership and a disciplined approach help us reach a more accurate understanding of our scope 1 and 2 emissions, but calculating scope 3 emissions comes with its own set of challenges. Even though scope 3 emissions account for 87% of Zayo’s total emissions, it has been harder to arrive at this number accurately since the data comes from various outside sources.
The key here is to find suppliers who report emissions data and build relationships with all suppliers to create a formalized process for gathering that data. Hunter suggests creating a formal supplier engagement process to get more accurate data and rely less on assumptions and estimates when formulating your overall carbon footprint.
Although measuring emissions can be as much of a challenge as reducing them, measuring and reporting emissions gives stakeholders a level of assurance that you’re doing the right thing.
And it’s not just the right thing to do:
- In Europe, it’s required.
- In the US, these measurements will soon be regulated with the SEC’s climate disclosure rule on the horizon.
- Several states already mandating greenhouse gas emissions reporting.
- It’s the first step to carbon reduction. That can have meaningful business impacts, such as employee and customer retention, and increased opportunities for customers who demand such action.
Setting Emissions Reduction Goals
When it comes to setting emissions reduction goals, targets should be science-based, time-oriented, and aggressive. Government and regulatory bodies set high benchmarks guided by targets defined by countries around the world following the collective goal of maintaining the temperature between 1.5 to 2 degrees Celsius of pre-industrial revolution levels.
Zayo’s goal is to reduce scope 1 and scope 2 targets by a little over 97% by 2030 from a 2020 baseline – something the Science Based Target initiative (SBTi) noted as one of the most aggressive targets they’ve seen. Smith believes that’s a good thing, sharing, “If you don’t draw the line in the sand somewhere, you’re just going to keep pushing it out. So we wanted to be aggressive because it holds us accountable to meet those targets. And if we can do it, why can’t others?”
Zayo’s aim is to set the standard for the telecommunications industry. We continue to explore new ways to reduce our emissions and we couldn’t do it without the insistence of our leaders and stakeholders. “This is a culture shift,” Smith adds, “The only way to do it is for your leadership and all your stakeholders to be behind you in this journey.”
Now is the time for leadership to get on board with net-zero emissions initiatives. The wave of sustainability regulations is a warning – it’s best to establish the guidelines and processes for measuring and reporting emissions now so your organization isn’t scrambling to put them in place when it’s required later.
“Whoever has an aggressive move and a path to driving green operations now will have a competitive advantage and will drive the industry five or 10 years from now when we will be forced to do it right,” Gomes predicts.
How Ciena and Zayo are Reducing Emissions Today
With measurement guidelines and robust reporting in place today, Zayo and Ciena are taking steps to reduce emissions and reach aggressive targets.
Zayo is approaching emissions reduction by scope, starting with scopes 1 and 2 – the emissions most directly within our control. We started with our vehicle fleet, phasing out older, less efficient vehicles and replacing them with hybrid vehicles. For scope 2, we’ve purchased Renewable Energy Credits (RECs) to further our goal of using 100% renewable energy. We worked closely with John Gomes and his team at Bain to check the return on investment for our initiatives and check emissions reductions for each.
We’re also making updates to our network infrastructure to reduce emissions. We’ve partnered with Juniper to replace our IP core with 400G-capable, high-capacity, and high-efficiency fiber transmission technology, saving us 90% in space and 88% in power consumption. We’ve also recently set a world record for the longest single terrestrial 800G Wavelength with Nokia, boosting efficiency and saving money, power, and space while reducing points of failure.
Ciena has approached emissions reductions by tackling the largest sources of emissions first. They analyzed efficiency in their operations, buildings, and commuting and travel, and also transitioned to 100% renewable energy to offset scope 2 emissions. They’ve taken on energy efficiency projects like adding solar films to windows in labs, saving them energy and costs on heating and cooling. They now also use more recycled content in packaging, reducing the weight and size of packaging for material and cost savings
Above all, they seek to reduce emissions through product innovation. Knowing their products are the largest source of their emissions, Ciena seeks to reduce space, power, and materials consumed in customer networks. Their Wave Logic 6 product, for example, now delivers 1.6Tb of capacity while reducing power per bit by over 50% from the previous generation.
Both Zayo and Ciena are reducing scope 3 emissions, as well. We seek providers who make emissions targets as much of a priority as we do and move away from suppliers who aren’t willing to join us on our sustainability journey. In the same way customers set expectations of us, we’re setting expectations of our suppliers.
We’ve developed a code of conduct for suppliers that requires them to meet emissions standards. By strengthening relationships with suppliers to figure out emissions data, you aren’t piecing it together from guesses and estimates. Finally, formalize the process for supplier engagement to gather more accurate data.
The “Why” of Sound Environmental Stewardship
It’s important to take steps today to become more sustainable. Your business will feel the immediate benefits:
- You’ll save money through improved efficiency and reduced energy consumption
- You’ll mitigate risk by adapting to regulatory changes with agility
- You’ll strengthen your brand as a leader in corporate responsibility
- You’ll attract and retain customers who increasingly expect you to take these steps
- You’ll attract and retain talent with action that reflects the values of your employees
Most importantly, it’s the right thing to do