Scope 3 emissions can be more than 11 times larger than a company's direct emissions
In the dynamic world of corporate responsibility, tackling climate change has emerged as a paramount challenge. The spotlight is on managing Scope 3 emissions, which are indirect emissions linked to a company’s activities but not under its direct control. It’s like trying to solve a puzzle with pieces scattered all around – a complex but vital task.
A Look at the Global Emissions Trend: Let’s rewind and look at the bigger picture. In the past 70 years, global carbon emissions have skyrocketed, increasing almost eightfold. More worrying is the planet’s average temperature rise since 1980, with most of the warmest years recorded in the past decade. To combat this, a global goal has been set: reduce carbon emissions by 45% in the next 20 years from 2010 levels. This target is not just ambitious; it’s crucial for our sustainable future.
Businesses worldwide are not just observing from the sidelines; they’re actively participating in climate action. As part of the RE100 initiative led by Climate Group, over 400 companies have committed to using 100% renewable energy. In the food sector, companies have set objectives to reverse forest loss and land degradation by 2030. Financial institutions, managing assets worth a staggering $8.7 trillion, have taken a stand against deforestation by pledging not to invest in businesses contributing to this global issue.
However, turning pledges into action is where the real challenge lies. For instance, companies must now track the deforestation impacts of ingredients like soya, palm oil, cocoa, and coffee – ingredients commonly used in consumer goods and retail businesses. It’s not just about making commitments; it’s about making real, measurable changes.
Scope 3 Emissions: The Hidden Giant: According to CDP (Carbon Disclosure Project), Scope 3 emissions can be more than 11 times larger than a company’s direct emissions; in particular, upstream Scope 3 emissions account for more than 50% of all emissions in sectors such as fashion, chemicals, and retail. Yet, only about 41%t of companies report these emissions, and a mere 14% have included them in their targets. This gap underscores the need for more transparency and action in addressing these indirect emissions.
Companies such as AstraZeneca, Atlassian, and Philips are pioneering efforts to tackle these challenges. Atlassian, for instance, aims for 65% of its suppliers to set science-based targets by 2025 but currently stands at 6.9%. Philips is working towards a goal of getting 50% of its suppliers to meet similar targets by 2025.
In Denmark, companies like TDC NET and Arla Foods are leading by example. TDC NET has developed innovative tools to assess the carbon intensity of its products, while Arla Foods is promoting sustainable farming practices by incentivising farmers with higher prices for eco-friendly products.
Striking the Right Balance in GHG (Greenhouse Gas) Target Setting: Companies are adopting varied approaches to setting greenhouse gas emissions targets. Some, driven by visionary leadership, set ambitious goals and inspire their teams to reach them, leveraging the momentum of bold ambitions. Others adopt a more cautious approach, investing time to ensure their targets are accurate and achievable. The optimal strategy lies in balancing these extremes, acknowledging the rapidly evolving expectations and the urgency of climate action.
To conclude, the journey towards effective decarbonisation, particularly concerning Scope 3 emissions, is intricate and multifaceted. Companies like AstraZeneca, Atlassian, Philips, TDC NET, and Arla Foods are not just committing to change; they are actively pursuing it. This collective movement towards reducing emissions is transforming not just business operations but also contributing to a global effort for a more sustainable and resilient future. As more companies join this mission, the narrative of corporate environmental responsibility becomes richer and more impactful, driving positive change in our world.
