Companies Becoming Carbon Neutral
February 21, 2022
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We no longer need to convince the private sector. It seems that the Paris agreement has instilled the idea that not only countries, but also other interested parties must join forces to lower the global temperature in the long term, in the hope of limiting the increase in the average to 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 has changed and we can say that we all agree that we need to take the path to decarbonization.
But now the question seems to be how to get there and how quickly. And most importantly, how can we be sure that companies are doing enough, in proportion to their share of emissions?
One issue is that each interested party will account for their emissions based on their own evaluation methods and processes. So how can we compare it to other companies, locally or globally? Yes, transparency is important, so that we have access to the data and can compare the results, but it is necessary to adopt a system to visualize the current state of affairs and see the long-term improvement by comparing each other's objectives.
One system that is working to achieve this goal is the Science-Based Objectives initiative (Science Based-Targets), where the premise is quite simple: How much should we reduce emissions in time to comply with the Paris Agreement? Companies that adhere to this system are committed to basing their commitment on what scientific evidence tells us. That's the level of ambition we need to reach, it's the least we can do.
So in this case, there's no room for Greenwashing, for regression, for green marketing or lies. We all base our goals on the fact that we cannot afford to live on a planet where the temperature increases by more than 2 degrees. We simply will not endure such climate changes. We, the inhabitants of planet Earth, which goes beyond the human race.
So, which companies have joined the SBT in Mexico and have already set specific objectives? So far, we can count two: Coca-Cola FEMSA in May 2020 with objectives “well below 2 degrees” and América Móvil in July 2020 with objectives “with business ambition of 1.5 degrees”.
As for Coca-Cola FEMSA, its objectives are as follows for 2020:
“Coca-Cola FEMSA is committed to reducing absolute GHG emissions from scope 1 and 2 by 50% by 2030, starting with a base year 2015*. Coca-Cola FEMSA is committed to reducing absolute scope 3 GHG emissions by 20% from the purchase of goods and services and transportation and distribution by 2030, starting with a base year of 2015. Coca-Cola FEMSA is also committed to increasing the annual supply of renewable electricity from 8.7% in 2015 to 100% in 2030.”
“The objectives that cover greenhouse gas emissions from company operations (scopes 1 and 2) are consistent with the reductions needed to keep warming at “Well below 2°C”. The renewable energy acquisition objective that covers Area 2 emissions is consistent with the reductions needed to keep heating at 1.5°C.”
In the case of América Móvil, its objectives for 2020 are as follows:
“América Móvil is committed to reducing absolute GHG emissions from scope 1 and 2 by 52% by 2030 starting from a base year 2019. América Móvil is also committed to reducing absolute GHG emissions of scope 3 by 14% by 2030 starting from a base year 2019.”
“The objectives that cover greenhouse gas emissions from company operations (scopes 1 and 2) are consistent with the reductions required to keep warming at 1.5°C.”
Just a quick methodological note: Scopes 1 and 2 include direct emissions, while scope 3 includes indirect emissions, which are more difficult to mitigate, but can be done. In fact, according to a recent study of some 338 approved SBT companies, 25% of their combined emissions have been reduced since 2015, a total of 302 million metric tons of CO2 equivalent.
What happens if these companies don't comply with their SBT? They are being removed from the initiative, there is no obligation of course, but it is a voluntary system of complying with climate ambition.
Many companies are announcing their commitment to carbon neutrality: Santander, Pepsico, FedEx and L'Óreal, to name a few I've seen in the news recently. And if you look at their objectives and proposals, they all have different deadlines for committing to “carbon neutrality”: Pepsi and Fedex aim to meet their objectives in 2040; LóRéal in 2050 and, more ambitiously, Santander in 2020.
The important thing is not to compare how quickly each company is achieving it. We need to recognize the work involved in having policies that seek to mitigate beyond what governments are also promising and what other stakeholders are doing. But we also need to find a system that works and that will guide us to achieve these objectives. For the private sector, the SBTs initiative could be the Sherpa.
Resources
“4 key points to achieving carbon neutrality and avoiding greenwashing” IDB Blog.
“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 supports Banco Santander's carbon neutrality with the Oaxaca Wind Energy Complex”. https://www.milenio.com/content/acciona-respalda-neutralidad-carbono-banco-santander
“Recognized by the UN, L'Oréal Aims for Carbon Neutrality by 2050". L'Oréal. https://www.loreal.com/en/news/commitments/recognized-by-the-un-loreal-aims-for-carbon-neutrality-by-2050/
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