The 7C Decarbonization Model

Some organizations are carbon intensive, using large amounts of energy and materials to do what they do.

Everyone is interested being more efficient and cutting costs, especially given how prices have swung wildly over the last few years.

The amount of uncertainty in the world doesn’t seem to be reducing, which makes price volatility something that could stay with us for a while.

So can you also do something about the amount of stuff you consume?

It’s surprisingly hard to calculate the real impact of operations.

We’re often dealing with huge and messy sets of data and creating some order from the chaos is the first step to being able to manage it.

We need lean and effective data management processes and systems that can get data from a range of sources and help us figure out where the efficiencies are hiding.

And getting this data is crucial for the next step.

We’re getting increasingly better at understanding how to work out our carbon emissions.

Once you have an inventory of emissions sources, consumption and appropriate factors, you can calculate emissions across your value chain.

These have to be accurate and auditable.

And the processes need to be repeatable because we’ll be doing this every year for the next half century.

But what do you do once you have some numbers?

Or, taking a step back, why do you need carbon numbers at all?

Surely having cost and usage information is enough to get on with managing the business?

Or does change need a little more of a push?

Unless you’re a firm created specifically for these new markets (think renewables and electric vehicles) the main driver for action is a change in the law.

Countries around the world are bringing in legislation to get their firms to start working on net zero plans, and companies are responding.

Rules like SECR, TCFD, CSRD and a host of other acronyms mean that organizations of all stripes have to figure out what they’re emitting, set targets for reducing their emissions that are aligned with the science and come up with plans to meet those targets.

But you’re not going to be able to deal with all this complexity on your own.

Decarbonization is not something that one person or one department is going to get done.

It needs support across the organization from a number of functions – from legal and procurement to operations and finance.

It also needs an ecosystem of suppliers and partners that work with you to get things done, from building business cases to designing and installing emissions reduction projects.

It also unlocks the next crucial step.

It’s not easy to find funding to support decarbonization projects.

They can have long payback terms, over five years in many cases, although some projects like LED lights have very quick ones.

We have to learn how to make compelling cases for investment.

A lot of that comes down to understanding different sources of capital and how to access them – from grant funding to self-financing projects.

But what is it that really creates a commitment to action?

All organizations exist within a wider context of customers, regulators, investors, employees, prospective employees, analysts and non-governmental players.

Leaders are being asked what they’re doing in their organizations about climate change.

The questions come during investor meetings, in procurement tenders, and in analytical reports in the media.

This community of stakeholders is playing a more and more important role in pushing for change.

If you’re someone trying to make a difference in your organization the 7C Decarb Model is a useful framework to help with thinking about what needs to be done.

You can use it as a checklist to make sure that all the elements are in place.

You can also use it to assess the maturity of your decarbonization journey.

The basics are about cost, consumption, carbon and compliance. That’s the bare minimum.

Collaboration is the big one – it makes change possible.

And that’s where capital comes in to unlock projects and create an impact that is recognized by the community.

Cheers,

Karthik Suresh