Organizations must take proactive steps to address climate change, both in terms of mitigation and adaptation. These efforts require a common language and understanding among stakeholders, so carbon reduction strategies can be effectively implemented. Activity-based models are one way that businesses can map out potential carbon reduction opportunities. They describe human activities and decision-making over a timescale under the assumption of continuous repetition.
They provide insight into how organizations can shift their practices towards reducing carbon emissions and increasing environmental sustainability.

Developing an organizational culture centered around climate resilience is essential for businesses to succeed in this endeavor and it is part of mapping out activity-based models. Doing so helps organizations to develop long-term plans for carbon reduction targets that will endure over multiple years, rather than just short-term solutions.

Activity-based models and their impact

One example of an activity-based model is that of urban transportation planning with the goal of balancing both efficiency (demand for transportation alternatives) and environmental impact (from type of transport chosen, distance traveled, etc.).  By laying out transportation scenarios and potential trade-offs (example: car-free streets vs. flexible commute times), we can assign a measure of environmental benefit to each scenario.  But looking at transportation as a human activity goes one-step further. Activity-based modeling requires defining the range of possible decisions by the users (commuters) and the response to potential carbon reduction scenarios which will affect traffic patterns. The goal is not to push users to eliminate scenarios (choose not to commute into work at all, for example); rather, to analyze what triggers a commuter’s need for transport and study what would affect that.

Activity-based models can also be deployed to better emphasize the reuse and recycling of materials to reduce carbon emissions. This type of carbon management exercise leverages existing technologies, such as basic 3D printing and more innovative carbon capture solutions, to limit carbon dioxide production from manufacturing processes and to encourage more sustainable practices directly by the users (for example, manufacturing personnel in a plant and supply chain managers).

Additionally, activity-based models help companies to adjust their strategies over time as environmental conditions change. Ultimately, they provide a toolbox to test both mitigation and adaptation practices by providing insight into potential carbon reduction strategies that are available today and those that are emerging along the way.

With a better understanding of what activities are the most carbon intensive, companies can make strides towards reducing their collective carbon footprint and reversing climate change as a function of time of policy action.

The narrative of climate risks and opportunities

In his book Don’t Even Think About it – Why Our Brains are Wired to Ignore Climate Change, George Marshall, a prominent expert in climate change communications, argues that human beings may be in denial about the scientific evidence of climate change and its consequences on daily life. Many feel overwhelmed by the complexity of environmental issues, unable to fully comprehend the effects of carbon emissions and other factors on our planet's climate. This difficulty in understanding has meant that many businesses lack adequate tools or frameworks to discuss their own carbon footprint or potential carbon reduction strategies. As such, most companies tend to focus on boilerplate statements and legal disclaimers without providing concrete solutions for their carbon emission problems.

Physical climate-related events and environmental disasters are the ones that most often come to mind. But as we move from insurance planning for catastrophic events to the sphere of more frequent and steady changes in environmental conditions that populations around the world are witnessing, we also need to consider the emerging risks associated with the transition of living and working conditions that these changes create, in both economic and social terms. Building a culture around climate resilience means addressing both direct and indirect impacts of those subtle changes and clearly articulating the scenarios that a business is considering when placing climate change as an organizational priority.

It is essential that businesses develop a language which allows them to accurately reflect their environmental footprint, as well as near-term and longer-term impacts on organizational resilience on extreme weather events. Only then can companies properly gauge how potential carbon reduction strategies will affect customers, employees, business partners, and the overall ecosystem, and how they are looking to adjust to ensure a smooth transition for all.

Let’s not forget that carbon emissions’ reduction is key in the fight against climate change. This requires a language that can be understood by all stakeholders involved with businesses – from employees to customers to business partners – so they can properly communicate their current state and the carbon reduction strategies they are advocating.

Activity-based models can help organizations of all sizes understand which roadmaps they should pursue in order to achieve this goal. By doing so, businesses can ensure the long-term success of their climate strategies and drive real-time responsiveness.

Learn more about these models and sustainable business practices in my book, The Impact Challenge.
About the Author

ALESSIA FALSARONE, SASB FSA, is a sustainable finance expert and a fellow of the Aspen Institute Business and Society Program. Her work bridges the gap between sustainability, financial innovation and risk management. A sought-after commentator for media outlets and contributor to academic programs, Ms. Falsarone is a member of high-level advisory groups that promote environmental and climate finance, including the G20 Environmental Ministerial, the London Stock Exchange, the Sustainability Accounting Standards Board (Value Reporting Foundation) and the UN Principles for Responsible Investment. In recognition of her innovative vision for business and society, she has received an Honoree Award from the Women’s Venture Fund and the 2021 Global Leadership Award by the SheInspires Foundation in the UK.

She is an alumna of Stanford University, the MIT Sloan School of Business and Bocconi University. Ms. Falsarone holds certified director status with the National Association of Corporate Directors. An avid advocate of sustainability in business education, she has contributed to educational initiatives on the topic at the Asian University for Women, the Society of Corporate Compliance, the Swiss Sustainable Finance Initiative, the United Nations, the World Bank, Stanford University and University of Chicago, including delivering training on climate risk and green finance in Asia Pacific and Latin America.

Follow me

Leave a reply

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}