Carbon Credentials insight: European businesses need science-based climate change targets
Richard Tarboton, Director of Strategic Services at Carbon Credentials, a data savvy carbon and energy management company, discusses the need for concrete scientific targets among business leaders and the impact such targets are already having on brands like Unilever, Diageo and Tesco.
The recent and most comprehensive study to date into climate change by the Intergovernmental Panel on Climate Change (IPCC) made headlines around the world.
The IPCC report was the most extensive warning yet on the risks of rising global temperatures, with leading international scientists saying it was the final call to save the world from climate catastrophe.
Indeed, we only had to look at the past summer to see just how temperatures are rising as a result of climate change. Along with the UK’s record-breaking summer there were record temperatures across four continents, including Japan recording its warmest day ever at 41.1°C and northern Africa's Sahara Desert seeing a record high with 51.3°C, the highest temperature ever reliably recorded on the African continent.
In 2015 the Paris Agreement was pledged by nearly 200 countries on tackling climate change and a commitment to keep global warming below 2°C. The IPCC was also invited to report in 2018 on the impact of global warming of 1.5°C and of the related emissions. The report, which drew on over 6,000 references, was clear: if we allow temperatures to rise above 1.5° the risk of catastrophic disasters will further increase. The next five to 10 years will be critical to avoid the worst effects of climate change and prevent environmental, social and economic damage. Could this be the last time to act, before it’s too late?
If businesses ignore the consequences of global warming and don’t recognise their contribution, future European and international business operations are likely to pay the price with more extreme weather affecting the entire supply chain.
Global businesses have a key role in helping to transition to a low carbon economy and to align targets with countries’ commitments to prevent world temperatures rising dangerously above 1.5°C. If each and every business commits to reduce their emissions to the level required to keep the world’s temperatures to within the maximum warming limit then we can avoid catastrophic impacts from climate.
However, if your business cannot commit to reduce its emissions in line with IPCC recommendations, then you are effectively saying that other businesses must make up for your shortfall. How will you perform versus your competitors and how will your customers and shareholders view this? Could this be a source of future competitive differentiation?
As in the words of Kene Umeasiegbu, Head of Environment at Tesco: “the release of the IPCC’s Special Report on 1.5°C reinforces the importance for all companies to align their efforts and raise their ambition to help avoid dangerous climate change and create a sustainable future.”
The good news is that nearly 500 businesses across the world have now committed to set Science Based Targets (SBTs). SBTs clearly demonstrate a company’s commitment to a low carbon future and reflect the level of action needed globally to help the world align with the Paris Agreement commitments. They provide businesses with a roadmap to make the necessary cuts in greenhouse gases and transition to a low-carbon economy.
With global brands such as Unilever, Diageo and Tesco committing to SBTs, these organisations are being regarded as responsible leaders, innovators and influencers who are also gaining the benefits of improved brand reputation and competitive advantage, including potentially reduced energy costs, better office and working environments and improved staff motivation and wellbeing.
Setting a science-based target involves understanding how much a business must reduce its emissions to deliver its contribution to limiting the increase in the world’s temperatures to within 1.5°C or 2°C.
Our client, Tesco, became the first corporate worldwide to align science-based targets with an ambitious 1.5°C target to become zero carbon by 2050. Within 12 months the supermarket giant revealed that it had already reduced emissions by 13% in 2017 against its 2016 baseline.
This work comprised a combination of methodologies to model absolute and intensity targets under both 1.5°C and 2°C scenarios in comparison to Tesco’s previous 2050 zero carbon ambition. By using rigorous assessment, robust analytics and practical recommendations, Tesco understood the costs, benefits and feasibility of setting its SBTs which enabled it to set credible, realistic and achievable targets.
The best practice approach at Carbon Credentials is to work with our clients to set more ambitious targets to do better than a 2°C limit and to reduce their emissions to limit temperatures to within a 1.5°C increase. This elevated ambition is to reduce the risk of reaching 2°C, and to account for the fact that unfortunately not all businesses will achieve the required target reduction – but these companies’ lack of action potentially puts climate change at greater risk.
This expertise involves calculating the level of emissions reductions that a business needs to achieve and then developing and implementing a plan to source renewable energy, introduce efficient technologies, and create a shift in employee behaviour.
To kick start the process, business chiefs need to debate at board level the rate of emissions needed across an organisation relative to its sector, understand what its competitors are doing and align future targets to fit within the business purpose. Develop a clear business case of the benefits and risks of setting a SBT versus not setting one, and ensure all areas can be supported by experts in carbon energy performance and management.
Achieving SBTs requires participation from all areas of the business, so early input and buy-in from key stakeholders needs to be across the board. Work closely with colleagues, senior decision-makers, suppliers, investors and customers from the outset and consider how SBTs align with company values.
The role a business plays in the supply chain is critical too as no single business will achieve its target in isolation. It has to be a joint, collaborative effort, but the sooner a business leader starts this journey the more competitive a business can become in driving the efficiencies and transformation that will be required.
Being visionary and setting long-range science-based targets could help your organisation to adapt to future business changes and mitigate business risk. As all too clear from IPCC’s report, setting ambitious targets will not only be good for the planet, but will also be good for your employees, your brand and bottom line.
Drax advances biomass strategy with Pinnacle acquisition
The Group’s enlarged supply chain will have access to 4.9 million tonnes of operational capacity from 2022. Of this total, 2.9 million tonnes are available for Drax’s self-supply requirements in 2022, which will rise to 3.4 million tonnes in 2027.
The £424 million acquisition of the Canadian biomass pellet producer supports Drax' ambition to be carbon negative by 2030, using bioenergy with carbon capture and storage (BECCS) and will make a "significant contribution" in the UK cutting emissions by 78% by 2035 (click here).
This summer Drax will undertake maintenance on its CfD(2) biomass unit, including a high-pressure turbine upgrade to reduce maintenance costs and improve thermal efficiency, contributing to lower generation costs for Drax Power Station.
In March, Drax secured Capacity Market agreements for its hydro and pumped storage assets worth around £10 million for delivery October 2024-September 2025.
The limitations on BECCS are not technology but supply, with every gigatonne of CO2 stored per year requiring approximately 30-40 million hectares of BECCS feedstock, according to the Global CCS Institute. Nonetheless, BECCS should be seen as an essential complement to the required, wide-scale deployment of CCS to meet climate change targets, it concludes.