Embedding carbon budgeting into your organisation – the importance of group-wide buy-in.
We are in an era where organisations across all sectors are making bold net zero commitments, with very few productively and effectively mobilising their plans to deliver on them.
Within the housing sector, many are taking the approach to focus responsibility for the delivery of carbon reduction activities within Asset Management Directorates. This is a natural place for it to sit, as it is the housing assets where the most positive impact can be made – but should the Asset Management function hold sole responsibility for carbon reduction activities?
The Climate Change Committee’s 6th Carbon Budget highlights that behavioural change makes up a third of the challenge in the UK achieving their net zero pledge; as we all come to terms with the push for a greener future, it is crucial to understand our role. So, when it comes to corporate net zero targets, is it fair these are owned by a fraction of the organisation to deliver? For organisations to achieve their net zero targets, departments across the whole organisation will need to shift from the mindset that “it is not our problem – The Assets and Sustainability team can deal with it.”
Through our work with clients to date, we can see that the most positive impacts can be made when. We believe there is a cultural shift in mindsets, where all have ownership of these carbon targets and carbon is seen as a resource to be treated the same as finances. Carbon budgeting needs to have the same level of importance as finance to make net zero targets a corporate mission across the organisation. By ensuring everyone’s accountability from the top down and bottom up to work in line with a carbon budgeting framework.
Typically, a carbon budget is set organisationally and divulged across departments ranging from Assets to Housing, HR to Finance and Development to IT. Individual function carbon budgets are aligned to the level of emission reduction required across the whole organisation, and the sphere of influence and financial resources that each department has.
If designed correctly, carbon budgets should also tie into the financial approval process, making the right level of seniority accountable across the organisation. Therefore, allowing the ability to assign responsibility to granular teams to work to the targets set and deliver in line with the governance structure. The framework must also ensure that carbon budgets and reduction targets are standalone agenda items at Board level meetings and have prominence across an organisational governance structure.
Implementing this approach to delivering a carbon budgeting framework helps to drive cross-working and collaboration to achieve the targets, with less of a deflection of responsibility, whilst stimulating discussions around solutions and approaches required to hit departmental carbon budgets and targets.
Subsequently, these discussions can range from embedding carbon reduction-related targets into employee personal development plans, and carbon literacy training that encourages positive behaviour. Undoubtedly, the approach also helps to support how an organisation assesses the viability of a development scheme. It is crucial to be aware of and consider carbon reduction hurdles, such as moving from NPV and/ or cost-to-value ratio to include tonnes of carbon per m2 or £ spent. Establishing a comprehensive implementation plan alongside the carbon budget framework will ensure all individuals assume responsibility and ultimately guarantees the successful embedment of carbon budgeting throughout an organisation.
It is essential that housing organisations carefully consider the best approach to deliver their net zero targets and avoid the trap of “launch and leave” (where new initiatives are designed well but left on the shelve with limited focus). This approach significantly increases the likelihood of reputational damage through failure to deliver targets. Too often is it forgotten that net zero does not just mean cost, it means survival and the ability to tap into the triple bottom line.
So, whilst the Asset Management function may be an appropriate place to sit responsibility for the management of carbon reduction activities in, it is essential that all functions are bought into the approach and are held accountable for their own activities in achieving corporate targets.
Please get in touch with Annabel Gray, if you would like to learn more about designing a carbon budgeting framework for your organisation and begin the organisational-wide shift to reaching net zero today.
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