5 Steps to Creating a Climate Mitigation Strategy

In October 2021, the United Nations (U.N.) held a global climate change conference (COP26) where over 5,200 businesses pledged to meet net-zero carbon targets by 2050. Yet, only 18 percent of CEOs reported having the clarity to operate their firms in line with the 1.5 degree Celsius warming trajectory.

As a business leader, it can be difficult to know where to start and how to make an impact on such a far-reaching, pressing issue.

“It may be easy for managers to fall into the trap of thinking that one business’s impact isn’t big enough to be worth doing,” says Harvard Business School Professor Forest Reinhardt, who teaches the online course Business and Climate Change alongside HBS Professor Michael Toffel, “or taking the perspective that it’s someone else’s responsibility to act—the government should take care of it, or consumers need to drive demand. But the lesson all business leaders can take from this course is that every firm can have an impact.”

To help you get started, here’s a primer on climate change and five steps to creating an actionable climate change mitigation strategy.

Related: Listen to Professor Reinhardt discuss climate change and the tragedy of the commons on The Parlor Room podcast, or watch the episode on YouTube.

What Is Climate Change?

Climate change refers to long-term shifts in temperature and weather patterns. Although some changes in Earth’s climate are natural, most are anthropogenic—or caused by humans.

Human activity has disrupted Earth’s natural regulatory systems—namely, the greenhouse effect, carbon cycle, and water cycle—by emitting more greenhouse gas into the atmosphere than can be naturally absorbed.

The four naturally occurring greenhouse gases are:

• Carbon dioxide (CO₂)
• Methane (CH₄)
• Nitrous oxide (N₂O)
• Water vapor (H₂O)²

Ways in which humans—and businesses in particular—generate excess greenhouse gases include:

• Burning fossil fuels to generate electricity
• Producing cement, steel, and iron for construction
• Waste management, such as landfills and trash incinerators
• Transportation, including cars, trucks, planes, trains, and ships
• Clearing land for agriculture
• Raising livestock
• Industrial processes like refrigeration and air conditioning

Because of these processes, businesses have a major impact on climate change and its effects, including higher average global temperatures and extreme weather events like storms, heat waves, temperature fluctuations, and rising sea levels, which cause flooding.

“Climate change is one of the world’s biggest societal challenges,” Reinhardt says in Business and Climate Change. “Companies will have to play an active role if we, as a society, are to have any realistic hope of managing the challenges presented by climate change.”

Related: How Climate Change Affects Business Strategy

5 Steps to Developing a Climate Change Mitigation Strategy

1. Identify Motivations

The first step to creating a climate change mitigation strategy is addressing your motivations.

“Some firms mitigate in anticipation of potential regulations, such as energy efficiency standards, carbon pricing systems, or technology mandates and bans,” Toffel says in Business and Climate Change. “Preparing for pending regulatory requirements like this can ease a company’s transition to future regulation.”

Getting ahead of regulatory requirements can qualify your company to weigh in on the regulatory planning process and help reduce your risk of a difficult transition with enforced requirements.

Other motivations for climate mitigation include:

• Aligning with your company’s values and contributing to its culture
• Supporting recruiting and retention efforts to attract sustainably minded employees
• Bolstering brand voice
• Encouraging engagement from customers who care about environmentally ethical consumption
• Labeling your brand as an industry leader

Listing your motivations before diving into the planning process can provide a guiding purpose throughout your efforts.

Related: Making the Business Case for Sustainability

2. Measure a Baseline Carbon Footprint

Carbon footprint is a term used to describe the total amount of greenhouse gas emissions—typically measured in metric tons—associated with an individual, a company, or a product. It can either measure carbon dioxide emissions or carbon dioxide equivalent, which aggregates all greenhouse gas emissions into one metric.

Identify Emissions Sources

To measure your organization’s baseline carbon footprint, start by identifying its emissions sources. In Business and Climate Change, Toffel explains the categorization method the Greenhouse Gas Protocol—a standardized global framework—presents:

• Scope 1: Emissions produced onsite by sources your company owns or controls
• Scope 2: Emissions generated offsite to create electricity, steam, and heating and cooling energy
• Scope 3: All other offsite emissions are categorized into Scope 3 Upstream and Downstream:
  • Scope 3 Upstream emissions are those associated with a product’s supply chain
  • Scope 3 Downstream emissions result from post-manufacturing activities, including distribution, use, and disposal

Conduct a Life Cycle Assessment

If calculating a specific product’s carbon footprint, you can conduct a Life Cycle Assessment to visualize emissions sources at each of its five life stages:

1. Sourcing: Where do the raw materials come from?
2. Manufacturing: What processes do you use to make the product?
3. Distribution: How do you disseminate the product to retailers and end users?
4. Use: What’s involved in the processes of using the product?
5. End-of-life: What happens to the product when you’re done using it?

Gather Data and Calculate Your Carbon Footprint

Next, gather emissions data.

“While identifying emissions sources and establishing the boundaries of measurement is important, it’s just the start of assessing a carbon footprint,” Toffel says in Business and Climate Change.

Inventory how much greenhouse gas each emissions source discharged over a set timeframe. Next, convert each into its carbon dioxide equivalent using its emissions factor, a numeric estimate of the quantity of greenhouse gas emissions a process or an activity produced.

Multiply the emissions amount by the emissions factor to calculate the carbon dioxide equivalent for the period. Finally, add up the carbon dioxide equivalents for each emissions source to determine your company’s carbon footprint.

3. Analyze Mitigation Options

After calculating your organization’s carbon footprint, identify and analyze your mitigation options.

Brainstorm how to replace the identified emissions sources with lower- or no-emission alternatives. Welcome innovative ideas, as climate mitigation is still a relatively young field. You can also hire a sustainability consultant for guidance on feasible options.

Once you have a list of mitigation options, analyze them using a marginal abatement cost curve.

“A marginal abatement cost curve enables managers to compare projects in terms of cost-effectiveness and effect on emissions reduction,” Reinhardt says in Business in Climate Change.

Using the tool, prioritize projects based on which will have the biggest impact on emissions reduction and be most cost-effective. It’s not always the case that the most expensive options provide the largest emissions reduction. Keep in mind that some climate change mitigation activities are government-subsidized, making them less costly to pursue.

4. Set Emissions Reduction Targets

Once you’ve decided which mitigation project to pursue, set clear goals. How will you determine success and measure progress?

According to Business and Climate Change, three popular types of mitigation targets are:

1. Percentage reduction targets: Set a goal to reduce greenhouse gas emissions by some percentage by a target year relative to a baseline year
2. Net zero targets: Commit to reducing greenhouse gas emissions to as close to zero as possible and then completely offset any remaining emissions by purchasing carbon credits
3. Science-based targets: Set science-based targets per the Science Based Targets Initiative (SBTi) that align with the Paris Agreement’s goal to limit temperature rise to 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial levels

No matter your target, setting it requires four elements:

1. Activity scope: What projects and activities does it include?
2. Baseline year: What timeframe will you compare the target carbon footprint against?
3. Target year: What date will you achieve it by? Do you have shorter-term milestones?
4. Target value and type: What’s the numeric metric you aim to achieve? For example, “reduce carbon dioxide equivalent by 50 percent” or “reduce carbon dioxide equivalent by 10 metric tons per square meter of land.”

5. Implement Mitigation Activities

Finally, implement your prioritized mitigation activities. Track progress toward your target and ensure you hit the necessary milestones along the way.

If your original strategy doesn’t yield your anticipated results, don’t be afraid to reevaluate and pivot.

“The mitigation planning process isn’t really linear,” Toffel says in Business and Climate Change. “Instead, it can be viewed as a continuous improvement process with iterations of measuring, analyzing, implementing, and evaluating mitigation activities.”

Gain the Knowledge to Enact Change

As you approach your climate change mitigation journey, remember that there’s always more to learn. By enrolling in a course like Business and Climate Change, you can gain the scientific foundation—as well as the tools and nuances—to inform your strategy for navigating this global challenge.

You can also learn directly from business leaders who’ve faced climate change firsthand and use their experiences to shape your organization’s mitigation efforts.

With the right motivations, targets, and baseline, you can help mitigate climate change’s effects.

Do you want to learn more about adapting to and mitigating climate change? Explore Business and Climate Change—one of our online business in society courses—and download our free e-book on how to become a purpose-driven, global business professional.