Business going carbon neutral

The question is no longer why should we commit? Nor why should we care? The conversation changes, and now we can begin to say we all agree to take on the path towards decarbonization.

We don’t need to convince the private sector anymore. It seems the Paris Agreement has brought home the idea that not only countries, but other stakeholders must join forces in order to bring down world temperatures in the long run, with the hopes of limiting the rise in average between 1.5 and 2 degrees Celsius before the turn of the century. 

The question is no longer why should we commit? Nor why should we care? The conversation changes, and now we can begin to say we all agree to take on the path towards decarbonization.

But now the question seems to be, how to get there and how fast? And more importantly, how can we be sure businesses are doing enough, proportional to their share of emissions?.

One issue is that each stakeholder will account for their emissions basing it on their own methodologies and process of evaluation. So how can we compare it to other businesses, at the local or global level? Yes, transparency is important, so that we have access to data and can compare results, but a system needs to be adopted in order to visualize the present state of affairs and see improvement in the long-term comparing each other’s goals.

One system that is working towards this goal is the initiative Science-Based Targets (SBTs), in which the premise is quite simple: How much should we reduce emissions in time to meet with the Paris Agreement Accord? Companies that join this system have committed to base their commitment on what scientific evidence is telling us. That’s the level of ambition at which we must be, it is the very least we could do.

So in this case, there is no space for greenwashing, for backsliding, for green marketing or lies. We all base our targets on the fact that we cannot afford to live in a planet where the temperature rises beyond 2 degrees. We will simply not endure such climatic changes. We, the inhabitants of planet earth, which goes beyond the human race.

 

So which companies have adhered to the SBTs in Mexico and have already set concrete targets? So far, we can account for two: Coca-Cola FEMSA in may 2020 with targets “well below 2 degrees” and América Móvil in July 2020 with targets “at business ambition for 1.5 degrees”. 

 

When it comes to Coca-Cola FEMSA, their targets are as follows for 2020: 

“Coca-Cola FEMSA commits to reduce absolute scope 1 and 2 GHG emissions 50% by 2030, from a 2015 base year*. Coca-Cola FEMSA commits to reduce absolute scope 3 GHG emissions 20% from purchased goods and services and upstream transportation and distribution by 2030, from a 2015 base year. Coca-Cola FEMSA also commits to increase annual sourcing of renewable electricity from 8.7% in 2015 to 100% by 2030.”

“The targets covering greenhouse gas emissions from company operations (scopes 1 and 2) are consistent with reductions required to keep warming to “Well-below 2°C”. The renewable energy procurement target covering scope 2 emissions is consistent with reductions required to keep warming to 1.5°C.”

 

In case of América Móvil, their targets for 2020 are as follows:

“América Móvil commits to reduce absolute scope 1 and 2 GHG emissions 52% by 2030 from a 2019 base year. América Móvil also commits to reduce absolute scope 3 GHG emissions 14% by 2030 from a 2019 base year.”

“The targets covering greenhouse gas emissions from company operations (scopes 1 and 2) are consistent with reductions required to keep warming to 1.5°C.”

 

Just a quick methodological note: Scope 1 and 2 include direct emissions whereas scope 3 includes indirect emissions, which are harder to mitigate but it can be done. In fact, according to a recent study of around 338 companies with approved SBTs, 25% of their combined emissions were reduced since 2015, a total of 302 million metric tons of CO2 equivalent.

What happens if these companies do not meet with their SBTs? They are removed from the initiative, there is no obligation of course, but it is a voluntary system of climate ambition enforcement. 

Many businesses are announcing their commitment to carbon neutrality: Santander, Pepsico, FedEx and L’Óreal just to name a few that I’ve seen in the news recently. And if you see their goals and proposals, they all have different deadlines to commit to “carbon neutrality”: Pepsi and Fedex aim to meet their targets by 2040; LÓréal by 2050 and more ambitious, Santander by 2020. 

What’s important is not to compare how fast each company is getting there. We have to acknowledge the work that implies to have policies that aim to mitigate beyond what governments are also pledging and what other stakeholders are doing. But we also have to find a system that works and that guides us towards reaching these goals. For the private sector, the SBTs initiative might just be the Sherpa.

 

Resources

“4 key points to achieving carbon neutrality and avoiding greenwashing” IDB Blog.

https://blogs.iadb.org/sostenibilidad/en/4-key-points-to-achieving-carbon-neutrality-and-avoiding-greenwashing/

“Companies taking action”. Science-Based Targets. https://sciencebasedtargets.org/ 

“Business ambition for 1.5C”. Science-Based Targets. https://sciencebasedtargets.org/business-ambition-for-1-5c 

“Understand the methods for science-based climate action”. https://sciencebasedtargets.org/news/understand-science-based-targets-methods-climate-action 

“PepsiCo Plans to Be Carbon Neutral By 2040—Is it Enough?” Live Kindly. https://www.livekindly.co/pepsico-carbon-neutral-2040-enough/

“FedEx pledges to go carbon-neutral by 2040 with EV delivery vans and more”. Road Show. https://www.cnet.com/roadshow/news/fedex-carbon-neutral-ev-delivery-vans/

“Santander commits to becoming carbon neutral in 2020”. Santander. https://www.santander.com/en/press-room/press-releases/santander-commits-to-becoming-carbon-neutral-in-2020 

“Acciona respalda la neutralidad en carbono de Banco Santander con el Complejo Eólico de Oaxaca”. https://www.milenio.com/content/acciona-respalda-neutralidad-carbono-banco-santander 

“Recognized by the UN, L’Oréal Aims for Carbon Neutrality by 2050”. L’Óréal. https://www.loreal.com/en/news/commitments/recognized-by-the-un-loreal-aims-for-carbon-neutrality-by-2050/ 

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