Capital Portfolio Planning and Abatement Performance Metrics in Focus for Carbon Working Group

The joint IPA-Industry Carbon Working Group (CWG) convened on August 22, 2023, for the second of two scheduled meetings this year, with participants from 28 member companies in attendance. The goal of this meeting was to progress two important topics to help members make portfolio-level decisions: incorporating sustainability targets into capital portfolio planning and developing carbon abatement performance metrics.

Incorporating Sustainability Goals in the Company Portfolio

Determining how to effectively incorporate sustainability targets into the ongoing business of long-range capital planning—as well as identifying, developing, and defining capital projects—is a growing struggle for many CWG member companies. Common questions IPA has fielded include: How do we identify and justify standalone sustainability projects? and How are sustainability goals included in stay-in-business and growth project objectives? In this session, we presented examples of several approaches IPA has observed and participants shared their experiences and practices with the group.

Specifically, we discussed how a Business and Engineering Alignment Meeting (BEAM) provides a valuable platform for many companies to bring sustainability into the room and challenge company priorities and value. Some project systems have even introduced a GHG Value Improving Practice (VIP) as a more formal mechanism to address these challenges. Ideally, companies should be addressing these questions even earlier in the project life cycle and making sure their portfolio management processes are articulating company expectations and providing the platform and rules of engagement to meet the company’s targets in their portfolio management processes.

Abatement Performance Metrics

IPA has been working with the CWG to frame a multi-company research study to establish abatement performance metrics, and much progress has been made since the topic was initially discussed at the January 2023 CWG meeting. Highlights include IPA’s growing internal data inventory of common abatement scopes, development of new operational and GHG performance data collection tools, and the many insightful 1:1 discussions IPA has conducted with CWG members to continue developing this initiative. In this meeting, the CWG aligned on the desired abatement calculation methodology and the next steps to kick-off the abatement performance metrics research study.

The Path Forward

Companies may differ in their ambitions and current pursuit of sustainability performance improvement and low-carbon scope selection, but all companies have to think critically about these topics and make tangible progress in the next few years. IPA and CWG members collectively have the data and knowledge to enable effective decisions. The goal is to continue working together to make sure we are solving the right problems, at the right time, to enable the right decisions.

For more information about the CWG’s efforts or to express interest in joining the ongoing work, complete the form below.