The pitfalls of the "Net" in Net-Zero

Bloomberg is out with yet another negative article on voluntary carbon emissions management focused on RECs. This is the second this year, and in some ways a 20-year crusade by the author. If you read this article and don't know where to start, here are five simple tips for scope two decarbonization:

The pious shall repent: Notice Exxon or Shell are not slammed in the article? If you take voluntary action, recognize you are setting yourself up for the "man bites dog" trope of journalists. You will get attacked. Set yourself up for success by acknowledging that at the forefront so your organization is not surprised by articles like this. You can also be confident that you are not alone. The underlying research paper examined 6,000 CDP filings!

Buy bundled renewables where you can: The criticism of RECs (where the electricity is unbundled from the attributes), has gained a lot of steam, with some legitimate criticism of additionality in low priced markets like Texas. Where you can, buy bundled renewable electricity, and in an open electric market reach for RPS quality instruments if budget allows.

What the article fails to mention is that very few companies have this option -- they are bound by monopoly utility service and that is why they reach for RECs. So if you have to buy RECs, buy them in the same electricity markets you consume electricity, acknowledge their flaws and set goals for onsite or longer term renewable agreements.

Report both locational and market based emissions The thrust of the underlying criticism is the old age critique of using market based methods for your emissions ("Indulgence! You Cheated,"). Several reporting standards already mandate reporting locational emissions, or the indirect emissions without regard to any REC, renewables or green power purchases. Reporting both shows your voluntary action in context and also highlights the authentic long term progress you are making without the use of market instruments. It also helps focus attention on the attributes of the power rather than trying to box with the persistent additionality critiques in the shadows.

Consider an analogy from plastics -- we all try to reduce single use plastic bottles, and recycling is far from perfect, but we still recycle!

Get rolling on Energy Efficiency Energy efficiency is the cute puppy of climate action -- nobody hates puppies. Your CFO or asset manager also likes energy efficiency. Unlike RECs, energy efficiency is a positive IRR, often in the double digits. For tenants, call your landlord! 15% of Gridium projects this year involve tenants and landlords collaborating to get deeper energy efficiency. Notice how Lowe's is used as the counterpoint in the article as the authentic climate champion.

Don't talk to Business Week Most organizations trying to do the right thing get blindsided by articles like this and its painful to see leaders in our industry attacked who have 30 years of authentically pushing for energy efficiency and renewables. Don't go into attack interviews like without media training and and maybe just let someone else take the call?

What are your thoughts on the article? How has your organization tried to address scope two emissions?