Decarbonization Steps for Sustainable Business

Why Decarbonization Has Become an Urgent Agenda for Businesses

In 2023, the Net Zero Stocktake report from Oxford University revealed that more than 90% of global GDP is now under net zero emissions targets by mid century (Oxford Net Zero, 2023). However, only a small number of companies have clear and measurable decarbonization strategies. This means that despite rising awareness, many businesses still do not know where to start.

Decarbonization is not just a green trend. It is a long term business strategy that determines the sustainability of company operations amid climate risks, market expectations and increasingly strict global regulations. To understand actionable steps, let’s break them down one by one.

1. Measuring the Company’s Carbon Footprint

The first step in decarbonization is understanding how much emissions the company generates. This process is conducted through carbon footprint assessment covering three main scopes:

• Scope 1: Direct emissions from operational activities, such as fuel consumption.
• Scope 2: Indirect emissions from electricity consumption.
• Scope 3: Emissions from the supply chain, transportation, and customer activities.

Using CarbonIQ Carbon Accounting Emission Platform from Jejakin or the Greenhouse Gas Protocol standard helps companies obtain accurate data to determine emission reduction priorities.

2. Setting Measurable Emission Reduction Targets

After identifying the major emission sources, companies need to set reduction targets aligned with the Science Based Targets Initiative (SBTi). These targets ensure that business commitments support global efforts to limit temperature rise below 1.5°C.

Targets are generally divided into two categories:

• Short term: Annual emission reductions through operational actions.
• Long term: Transformation toward a fully low carbon business model.

Companies such as Unilever and IKEA are successful examples of integrating net zero targets into their business strategies and supply chains.

3. Optimizing Energy Efficiency and Utilizing Renewable Energy

One of the most immediately impactful steps is improving energy efficiency. This includes replacing equipment with energy efficient alternatives, using automated sensors in offices, and transitioning to electricity from renewable sources.

Investing in renewable energy not only reduces emissions but also has the potential to lower long term operational costs. Many companies now use Power Purchase Agreement (PPA) schemes to secure stable supplies of green energy.

4. Managing a Low Carbon Supply Chain

Decarbonization does not stop within the organization. Around 70% of corporate emissions typically come from the supply chain (Scope 3). Therefore, involving suppliers in decarbonization efforts is crucial.

Some actions that can be taken include:

• Assessing supplier emission performance.
• Providing training or support for partners aiming to reduce their carbon footprint.
• Collaborating with vendors who hold sustainability certifications or standards.

Building long term collaboration enables companies and partners to grow together toward a greener supply chain.

5. Integrating Green Technology and Innovation

Technology plays a key role in accelerating the transition toward low carbon business practices. This includes digitizing emission data, utilizing Internet of Things (IoT) to monitor energy consumption, and adopting nature based solutions such as Jejakin’s digital tree planting projects.

Digital innovation also enhances transparency. Blockchain based platforms, for instance, enable publicly verifiable emission reporting, thereby increasing investor and customer trust.

6. Reporting and Communicating Progress Transparently

Decarbonization commitments need to be supported by consistent and credible reporting. Sustainability reports based on GRI (Global Reporting Initiative) standards, as well as guidelines from OJK and TCFD (Task Force on Climate related Financial Disclosures), help companies demonstrate concrete efforts in managing climate risks.

Transparency is not only an obligation but also a reputation strategy. Consumers and investors are increasingly attentive to how businesses take responsibility for the environment.

Toward a Low Carbon Business Future

Decarbonization is a long term journey, not an instant effort. With measurable steps, collaboration, and technological support, businesses can contribute to a healthier planet while creating new, sustainable competitive advantages.