This week, we would like to share our notes on the Stories of Change 2022 report published by CDP (the Climate Disclosure Project). The report focuses on the implementation of successful environmental strategies in various companies, mainly talking about emission reduction initiatives. It was published in the context of COP27, with the intention of motivating companies to adopt sustainable business practices.
After analyzing different initiatives, CDP’s recommendations for the successful implementation of a climate strategy are:
- Introduce KPIs that measure GHG emissions for their management and reduction at the company level.
- Develop a list of ambitious, science-based sustainability targets, considering the direct and indirect impact of emissions.
- Involve suppliers in the strategy to build a sustainable value chain.
- Identify information needed to improve the company’s climate performance.
- Extend best practices for renewable energy consumption throughout all operations.
- Adopt a medium- and long-term perspective, considering climate change and its potential effects on all stakeholders.
Some examples of success stories included in the document are:
- Asahi Group Holdings. Food and Beverage, Japan. Their Scope 1 and 2 emission reduction targets for 2030 were approved by SBTi, becoming the first Japanese group to join RE100 (companies committed to 100% renewable energy use), they signed the Business Ambition for 1.5°C agreement and participated in the UN-backed Race to Zero global campaign. The Group also tackles plastic pollution with lighter packaging and the use of recycled PET, and follows TCFD recommendations.
- LÓreal. Manufacturing and Consumer Discretionary, France. Their global target for 2030 is to reduce their carbon emissions by 25% in absolute terms, 50% per finished product, and 50% of supplier emissions. They aim to achieve net zero emissions by 2050. By the end of 2021, they had already reduced their emissions by 87% compared to 2005, while their production increased by 37% over the same period, without relying on carbon emission compensation projects. They have also developed an environmental scoring system that provides a transparent assessment of each product, calculated using 14 impact factors at each stage of the product life cycle. This system is available on the websites of eight brands in 27 countries.
- Moody’s. Risks, USA. In 2022, they established a target of 90% reduction of Scope 1, 2 and 3 emissions, these targets were validated by SBTi. They have integrated this practice into their Supplier Code of Conduct with the goal of having at least 60% of their suppliers also SBTi certified. They are also founding members of the Net Zero Financial Services Provider Alliance.
The issue of climate strategy is becoming increasingly relevant for investors and creditors. It will be key to fund future growth, especially for organizations in industries that are highly exposed to climate change. If you are interested in analyzing how to manage this issue in your company, Miranda ESG would be happy to help you get started.
I hope you found this interesting. As usual, if there is anything we can help you with, or if there is an ESG topic you would like to know more about, please let us know.
CEO, Miranda ESG
Contacts at Miranda Partners