With companies biofuel business like BP, Exxon and Ford racing towards net-zero carbon emissions by 2050, producers are feeling the urgency of adopting their own sustainability goals and programs. Prioritizing a sustainability plan can also be profitable for producers – helping manage risk, capitalize on tax and regulation-based credits, and satisfy the desires of environmentally-conscious consumers.
“As the retail industry continues to ask questions about the sustainability of the products they sell, fuel and shipping will be further impacted,” says Donna Funk, Pinion lead biofuels consultant. “Ethanol and other fuels will be viewed through the sustainability lens even more closely. This is a good thing, if producers can produce information that demonstrates environmental, social, and financial consciousness.”
Biofuel company finds a path towards sustainability
Pinion advisors recently conducted a materiality assessment for a biofuels client who was unsure of where to begin on their sustainability journey. The team worked through the assessment process, analyzing the producer’s priorities including environmental, social, and economic focus areas for their strategy. They worked to define sustainability for their specific operation and then aligned their metrics on those areas. They left the meeting with a clear focus on where they should focus in the next year, the next three years and where they simply shouldn’t waste their time or energy. They had a clear path forward.
What might this look like for your company? Pinion sustainability advisors outline the process below:
Step 1: Define sustainability for your biofuel business
Goals and targets will look different for everyone – a corn grower in Illinois will have very different goals than an ethanol plant in Iowa. There is no one size-fits-all approach when it comes to sustainability and climate-smart practices. “It’s like the process of defining your company’s mission or vision statement,” explains Funk, “Each ethanol plant will need to come up with their own unique definition that will inform their sustainability mission and measure their goals.”
Step 2: Identify key stakeholders
For your plan to be valuable, effective, and impactful, your company should identify the key stakeholders and understand their needs. This will enable you to set priorities and metrics that are unique to your business and those most greatly invested and impacted by it.
There are two critical groups to evaluate:
- Internal stakeholders: employees, leadership, and investors
- External stakeholders: customers, community members, and the industry at large
Step 3: Analyze your current performance and compliance
To understand where you want to improve, get a clear picture of where you are. What are your carbon emissions? Are you compliant with the latest state and national regulations? Understand where you are struggling and succeeding – this can help identify opportunities or pitfalls as you create a plan for change.
Step 4: Create goals and baselines
This is where a materiality assessment – a process of identifying the most strategic sustainability focus area of your business – comes into play. This process outlines what your organization should focus on immediately, in the short term and in the long term, giving you a roadmap to follow. It identifies correlating metrics to act as key performance indicators enabling you to calculate baselines, model potential goals, set achievable targets and plan your course of action to meet the needs of your key customers, investors, and supply chain stakeholders.
Pinion provides materiality assessments for biofuel business, as well as benchmarking, metrics, policy development, analysis, and reporting. Reach out to our sustainability team to help you define, develop, and measure a sustainability plan unique to your business needs and goals.