The idea of climate change is not a new one. Since the 1960s, the scientific community has warned of significant climatological changes due to industry and human activity, and businesses have been engaged with ecological issues for decades. In recent years, however, the need for profound change has become acute. Mere engagement with environmental issues is not enough, and much more needs to be done if we are to avoid the multiple impacts of climate change.

Basically, when it comes to climate change “but we have always done it that way” is the wrong answer.

The Global Risk Landscape

We can quantify risks in different ways, but two of the most effective metrics are likelihood and impact. Research from the World Economic Forum places Climate Action Failure in second place on their list of the Top Five Risks by Likelihood for 2020, second only to Extreme Weather a consequence of climate action failure. On their list of the Top Five Risks by Impact, however, Climate Action Failure sits at number one, ahead of Weapons of Mass Destruction, which is in second. Viewed in a likelihood/impact matrix, Climate Action Failure is the greatest risk we face today.

What are the financial implications of this? By the end of 2021, it is estimated that up to $45 trillion worth of global assets will be at risk from climate change. Non-action on climate change is expected to cost 200 of the world's largest firms $1 trillion in total. These are not empty projections — in 2018 alone, natural disasters caused economic damage worth $165 billion, half of which was uninsured.

Responses to Risk

Businesses have already begun to implement strategic shifts in their projects and rising to the challenges presented by climate change. As governmental regulation intensifies, and as the public begins to engage fully with the issues we face, project work is evolving. This evolution needs to meet the needs and expectations of all stakeholders, from government bodies and investors, through to financial institutions, insurance providers and the customers themselves.

To achieve this, any future project work that requires financing needs to include a climate change assessment. This involves the complete analysis of physical risks — including short-term acute risks and longer-term dangers — the quantifying of emissions, and the outlining of alternatives that can drive down the project's carbon footprint and reduce the overall carbon intensity of the resulting product.

Project Focused Solutions — The Future of Carbon Reduction

The future of carbon reduction will be based upon data and analysis — you cannot reduce your carbon if you cannot measure it. This means objective judgements, free from bias, are required, along with traceable, repeatable, and verifiable analysis. Emissions information must be delivered in a timely manner so that action can be taken, and analysis needs to be conducted according to explicit methodologies and process boundaries that provide direct comparisons.

Industry understanding, knowledge, and expertise must underpin all of this. It is not enough simply to measure emissions — businesses need to be able to identify the factors causing these emissions, understand them, and work to reduce them.

How is rhi Working Towards a Change

There is no need to reinvent the wheel here — instead, what is required is a fresh perspective and a positive attitude towards change. So, how is rhi applying this to support global carbon footprint reduction?

Focusing on Energy

We tailor our tools and databases to the energy sector. This is a critical sector in the battle against carbon emissions, and it is also our area of expertise.

A Four-Tiered Approach

In all our project work, we are adopting a four-tiered approach, giving us the opportunity to identify project aims, refine these aims, and then execute them. This involves:

• Tier 1: Establishing default factors according to project parameters, such as fuels, materials, services, and product types.
• Tier 2: Establishing project benchmarks according to equipment type, fuel characteristics, and consumption estimates, as well as quantity and transport of materials.
• Tier 3: Applying specific factors for equipment, fuel, and material types.
• Tier 4: Measurement and analysis, supported by Wood’s ENVISION direct emissions monitoring tool.

Alignment Across Full Project Life cycle

We apply our approach across the full project life cycle, utilising our tiered structure across the design, construction, operation, and decommissioning stages of the project.

Solution-oriented Goals

Drawing upon our expertise in the industry and our methodical approach, rhi aims to deliver real, workable, and cost-effective solutions. These solutions are geared towards reducing costs by pricing the cost of carbon avoided and supporting clients in meeting carbon intensity reduction targets.

Analysing and Assessing Across Different Scopes

Project carbon emissions are categorised across three main scopes.

• Scope 1 is for all direct emissions from assets owned or controlled by the project.
• Scope 2 covers indirect emissions from the supply of power and heating.
• Scope 3 refers to emissions from elsewhere in the value chain. This is further divided into upstream — emissions from materials, fuels, equipment, and services purchased — and downstream; emissions from products produced.

Our Approach

We are developing a package of seven different tools, designed to assist clients in quantifying the carbon footprint across the entire project life cycle. These tools work to combat:

• Direct emissions - scope 1.
• Indirect emissions - scope 2.
• Embedded carbon in purchased fuels and materials — upstream scope 3.
• Construction and site build emissions across all scopes 1 and 2 and upstream scope 3.
• Emissions from product usage, covered by downstream scope 3.
• Transport emissions - scopes 1 and 2.
• Reduction in greenfield land, land-use changes, and marine carbon stock and sink impact.

rhi’s Role in the Future of Carbon Reduction

With this approach and with our toolkit, rhi work to assist clients to achieve their climate change ambitions. This will include supporting companies during the global transition to net-zero carbon and embedding decarbonisation across the entire project life cycle. The old ways of dealing with carbon are not enough — but the new way is within our grasp.

For more information, please contact mail@rhi-group.com