Capgemini: why sustainability reporting matters
Why Sustainability Reporting Matters?
Dr James Robey, Global Head of Environmental Sustainability, leads Capgemini’s sustainability programme across 40 countries and is responsible for the delivery of a programme to help Capgemini’s clients save 10mn tonnes of CO₂e through leveraging technology. In this column, he shares insights into why sustainability reporting is important, and what he sees to be the emerging trends in this field.
Sustainability reporting has come a long way since the 1980s, when only a small handful of companies in specific sectors, such as oil and gas, declared their environmental performance. As reporting has emerged as a valuable management tool rather than a response to public outcry, reporting across all sectors and all types of organisation has become more sophisticated. Now, research indicates that at least three quarters of all mid-large organisations report on responsible and sustainable business practices.
Ten years ago, we marked the launch of our environmental sustainability programme with the formalisation of our first carbon reduction targets and we have been reporting since. We have always believed that targets can drive organisations to higher performance. We recently achieved our global five year-target carbon reduction target two years ahead of schedule and we now have our eyes set firmly on our 2030 30% Science-Based reduction target. (2018/9 Environmental Sustainability Report).
This progress is the culmination of innovative approaches and efforts from across the entire Capgemini Group to embed sustainability into our operations, behaviours and business practices, facilitated by a robust reporting and management process. In this context, I thought it was timely to consider why reporting is so important to us.
At the heart of our reporting cycle, we have several key principles:
Firstly, we ensure we have the right targets that are both material and ambitious, and which will drive innovation and impact.
Secondly, we need ‘good data’ that is complete, granular and accessible (I explored this in a previous article). We also try to ensure our reports are precise, concise and easily navigable. This is about making them readable while still containing a wide breadth of useful information for different stakeholders. For example, including detailed performance scorecards at the end of our report enables stakeholders keen to perform their own analysis on our progress based on the raw data.
Finally, we work to ensure our reports are authentic: that what we report on presents a true reflection of our organisation both in terms of what we stand for and what we have set out to achieve.
Why do we report?
Reporting has many benefits - from helping us increase our own understanding of our material issues to helping us benchmark against others and track our own performance. It is an annual checkpoint of our progress against all that we set out to do. This also invites discussions with our senior executives on whether we have achieved enough. Are we doing the right thing? Should we do more? These questions in turn influence our long-term management strategy.
Reporting strengthens our stakeholder engagement.
The reporting process, as well as the publication of the report itself, is also a valuable tool. It facilitates communications with external stakeholders, such as our investors, clients, or even potential new employees. However, for us the most critical part of our report is the internal conversations it provokes. It reminds us how many people and teams are involved in our sustainability journey. We estimate that over 100 people were involved in just the creation of our latest report content, with thousands across the global business actively involved in driving the agenda forward. Each year, the report leads to the beginning of many new conversations and partnerships.
Reporting drives internal efficiency
Our approach to reporting brings a discipline to our sustainability and responsible business practices. It ensures we are aligning these activities with our business purpose and values.
Critically, our reporting shows if our activities meet our agreed objectives. If gaps are highlighted, the programme team engage with internal stakeholders to refocus on the desired outcomes. By constantly making sure our progress is on track, we can continuously adapt our programme to address emerging material issues, ensuring appropriate targets are in place.
Our reporting process builds trust for our business
Reporting increases engagement, accountability and transparency, which ultimately fosters trust. Trust is critical for any organisation, and this is particularly true today where Edelman’s Trust Barometer shows year on year that trust is an ever-increasing issue. True transparency requires true and honest conversations and an approach to reporting that highlights both achievements as well as the challenges we are facing.
What next for reporting?
If the 1980s were characterised by the emergence of environmental accountability, and the 1990s into the new millennium saw the rise of reporting against a wider scope to meet increasing recommendations of reporting frameworks, then what can we expect next for reporting?
At Capgemini, we recently published our second Integrated Report which sets out our move to reporting on the shared value we create for investors, employees, suppliers - as well as communities and the environment. This process is helping us define and deliver our purpose as a business.
With ever growing expectations from stakeholders, sustainability reporting is not without challenges, not least the question of whether it’s possible to meet the needs of all stakeholders through a single publication. That said, I personally believe that regular annual reporting will continue to be of significant value by providing one clear, structured and easily accessible source of information.
However, I am also anticipating a trend away from publishing only one, static annual report. I expect this approach will be augmented with more flexible, multichannel approaches to reporting moving forward. I would envisage that over time, we will see information more dynamically hosted on corporate websites, in a range of accessible formats. From engaging and interesting accounts of best practices to engage and inspire, to spreadsheets of environmental and other performance data ready for analysts to interrogate in any way they desire. I would also like to believe that the number of different standards and frameworks will reduce to enable sustainability practitioners to spend more time on the quality of their reporting and considerably less on reporting the same information in many different ways.
Carbon dioxide removal revenues worth £2bn a year by 2030
Carbon dioxide removal revenues could reach £2bn a year by 2030 in the UK with costs per megatonne totalling up to £400 million, according to the National Infrastructure Commission.
Engineered greenhouse gas removals will become "a major new infrastructure sector" in the coming decades - although costs are uncertain given removal technologies are in their infancy - and revenues could match that of the UK’s water sector by 2050. The Commission’s analysis suggests engineered removals technologies need to have capacity to remove five to ten megatonnes of carbon dioxide no later than 2030, and between 40 and 100 megatonnes by 2050.
The Commission states technologies fit into two categories: extracting carbon dioxide directly out of the air; and bioenergy with carbon capture technology – processing biomass to recapture carbon dioxide absorbed as the fuel grew. In both cases, the captured CO2 is then stored permanently out of the atmosphere, typically under the seabed.
The report sets out how the engineered removal and storage of carbon dioxide offers the most realistic way to mitigate the final slice of emissions expected to remain by the 2040s from sources that don’t currently have a decarbonisation solution, like aviation and agriculture.
It stresses that the potential of these technologies is “not an excuse to delay necessary action elsewhere” and cannot replace efforts to reduce emissions from sectors like road transport or power, where removals would be a more expensive alternative.
The critical role these technologies will play in meeting climate targets means government must rapidly kick start the sector so that it becomes viable by the 2030s, according to the report, which was commissioned by government in November 2020.
Early movement by the UK to develop the expertise and capacity in greenhouse gas removal technologies could create a comparative advantage, with the prospect of other countries needing to procure the knowledge and skills the UK develops.
The Commission recommends that government should support the development of this new sector in the short term with policies that drive delivery of these technologies and create demand through obligations on polluting industries, which will over time enable a competitive market to develop. Robust independent regulation must also be put in place from the start to help build public and investor confidence.
While the burden of these costs could be shared by different parts of industries required to pay for removals or in part shared with government, the report acknowledges that, over the longer term, the aim should be to have polluting sectors pay for removals they need to reach carbon targets.
Polluting industries are likely to pass a proportion of the costs onto consumers. While those with bigger household expenditures will pay more than those on lower incomes, the report underlines that government will need to identify ways of protecting vulnerable consumers and to decide where in relevant industry supply chains the costs should fall.
Chair of the National Infrastructure Commission, Sir John Armitt, said taking steps to clean our air is something we’re going to have to get used to, just as we already manage our wastewater and household refuse.
"While engineered removals will not be everyone’s favourite device in the toolkit, they are there for the hardest jobs. And in the overall project of mitigating our impact on the planet for the sake of generations to come, we need every tool we can find," he said.
“But to get close to having the sector operating where and when we need it to, the government needs to get ahead of the game now. The adaptive approach to market building we recommend will create the best environment for emerging technologies to develop quickly and show their worth, avoiding the need for government to pick winners. We know from the dramatic fall in the cost of renewables that this approach works and we must apply the lessons learned to this novel, but necessary, technology.”
The Intergovernmental Panel on Climate Change and International Energy Agency estimate a global capacity for engineered removals of 2,000 to 16,000 megatonnes of carbon dioxide each year by 2050 will be needed in order to meet global reduction targets.
Yesterday Summit Carbon Solutions received "a strategic investment" from John Deere to advance a major CCUS project (click here). The project will accelerate decarbonisation efforts across the agriculture industry by enabling the production of low carbon ethanol, resulting in the production of more sustainable food, feed, and fuel. Summit Carbon Solutions has partnered with 31 biorefineries across the Midwest United States to capture and permanently sequester their CO2 emissions.
Cory Reed, President, Agriculture & Turf Division of John Deere, said: "Carbon neutral ethanol would have a positive impact on the environment and bolster the long-term sustainability of the agriculture industry. The work Summit Carbon Solutions is doing will be critical in delivering on these goals."
McKinsey highlights a number of CCUS methods which can drive CO2 to net zero:
- Today’s leader: Enhanced oil recovery Among CO2 uses by industry, enhanced oil recovery leads the field. It accounts for around 90 percent of all CO2 usage today
- Cementing in CO2 for the ages New processes could lock up CO2 permanently in concrete, “storing” CO2 in buildings, sidewalks, or anywhere else concrete is used
- Carbon neutral fuel for jets Technically, CO2 could be used to create virtually any type of fuel. Through a chemical reaction, CO2 captured from industry can be combined with hydrogen to create synthetic gasoline, jet fuel, and diesel
- Capturing CO2 from ambient air - anywhere Direct air capture (DAC) could push CO2 emissions into negative territory in a big way
- The biomass-energy cycle: CO2 neutral or even negative Bioenergy with carbon capture and storage relies on nature to remove CO2 from the atmosphere for use elsewhere