Carbon Working Group Tackles Social Responsibility and Abatement Performance Metrics in 2023

The first 2023 bi-annual meeting for the Joint IPA-Industry Carbon Working Group (CWG) was held January 24, 2023, with participation from most of the 35 member companies. The CWG brings together companies from all industrial sectors to connect corporate sustainability goals with the capital projects that can make those goals happen. The CWG provides an opportunity to hear concerns and make this corporate-to-projects connection happen effectively.

The goal of this CWG session was to align on the group’s objectives for 2023 and to define and progress two main topics: social responsibility Best Practices and abatement performance metrics.

Social Responsibility

Capital project developments bring economic and employment opportunities to communities, but they also bring change and potential risks. Social responsibility forces businesses to examine how decisions and practices affect their customers, clients, employees, and local communities. How well companies/project teams engage with local communities and other stakeholders sets the stage for future success or long-term problems—including failure—for an asset.

It is important to note that IPA’s goal in this area is not to drive a company’s corporate social responsibility strategy but to understand how it influences decisions related to capital projects. IPA has been collecting social responsibility data on megaprojects for almost a decade now. During the January CWG meeting, the goal was to highlight the database IPA has developed over the years and to understand what key outcomes are driven by these practices.

Some of the social responsibility Key Performance Indicators (KPIs) we have seen include the number of jobs created, CAPEX invested in local infrastructure development (schools, roads, etc.), local skills developed, and training provided. Local content requirements are often used as a metric as well. These data can help us understand the success of social responsibility efforts.

Abatement Performance

Low carbon scope selection is a structured process to identify and assess alternatives to avoid or reduce emissions from a certain baseline. Industry has applied different frameworks in the past to improve performance in other areas, such as cost, without losing functionality. These took the shape of Competitive Scoping or Lead Scoping or Value Improving Practices. Low carbon scope selection is a similar process but with the goal to reduce emissions.

IPA’s goal in this journey is to assist sites and assets in choosing the optimal decarbonization alternatives to meet their future targets. Optimal solutions are usually those that achieve the lowest greenhouse gas (GHG) emissions and highest net present value (NPV). However, depending on the context, several other criteria are used in the screening process, including technical feasibility; space and topsides weight considerations; operability limits; nearby infrastructure; system reliability; and prior experience of the industry, owner, and contractors.

IPA introduced a high-level development pathway for progressing this topic. The first phase is to provide baseline performance metrics for common abatement alternatives. The metrics evaluated for each alternative will be cost (CAPEX and OPEX), schedule, and GHG-reduction potential.

The Path Forward

Companies may differ in their ambitions and current pursuit of social responsibility and low-carbon scope selection, but all companies will 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 next step is to work together to make sure we are solving the right problems, at the right time, to enable the right decisions.

Please fill in the form below for more information about the CWG’s efforts or ways to participate in the ongoing work.

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