Companies are increasingly aware of their energy sources, and a YouGov poll released yesterday found that more than half of executives (52%) expect their products to be low carbon by 2028. The Manufacturer asks, is this a realistic target?
In fact, one in five executives predict that with strong emission reductions and ‘science-based targets’, 100% of their products could be low carbon within a decade.
The Science Based Targets initiative – a collaboration between CDP, the UN Global Compact, World Resources Institute and the World Wide Fund for Nature – is being adopted by companies to help drive down their greenhouse gas (GHG) emissions.
Targets are considered “science-based” if they adhere to the level of decarbonisation required to keep global temperature increase below 2°C.
The low carbon notion aligns with the Paris Agreement, a deal signed in 2016 by every country – apart from Syria and Nicaragua who’ve now signed, with the US having dropped out since – and is a global action plan to avoid climate change by limiting global temperature to below 2°C.
Speaking to The Manufacturer, Dexter Galvin, global director of corporations & supply chains at CDP, said: “We think that one of the biggest risks companies face over the next couple of years, is increased regulation as a result of the Paris Agreement.
“The world committed to carbon reductions through the agreement and as a result of that we will see many different jurisdictions introducing their own regulations to help meet those targets.”
Environment was seen by the companies surveyed – who have all either set or planned to set science-based targets – as the second biggest factor influencing business growth over the coming five years, after technological change and ahead of economic policy.
Kellogg Company: Science-based target case study
Kellogg company, the world’s second largest snack brand, which include family favourites Pringles and Cornflakes, has committed to science-based emission targets.
The company, which manufacturers in 18 countries and markets in more than 180, have committed to a 15% reduction in emissions (per tonne of CO2 produced) by 2020 from 2015 rates.
Kellogg also has pledged to reduce by 20% absolute value chain emissions by 2030 from 2015 rates.
The company has a long-term target of a 65% complete reduction in emissions by 2050 from 2015 rates, and it is to reduce by 50% absolute value chain emissions by 2050.
The company is reportedly already taking positive steps towards the targets; the brand now has fuel cell technology at its waffle-making facility in San Jose, a first for the snack supplier.
Galvin said the science-based targets will be “a very significant shift in business models for large corporations”, and he explained he does believe these low carbon aims are possible: “In most cases we have seen it is indeed achievable, in many industries the technology already exists to reduce carbon.
“This is not coming from a sustainability or environmental team, this is coming from a senior leadership team. In these cases the CEO would’ve signed off on their targets and it will have been discussed extensively at board level, they would’ve looked into scenarios of how the target would be achieved.”
Eight out of the 10 companies surveyed said the biggest benefit of low carbon targets is brand reputation, while 63% said the commitment helps to drive innovation.
He explained that investors are now moving to support companies to reduce emissions and to push them to be more ambitious. However, some investors are only concerned with short-term profits; Galvin added, “We are seeing more and more larger investors wanting to see companies develop targets inline with the science of climate change. A lot more of our investors signatures at CDP are actually using science-based targets as a proxy for good business practice now.”
Of the 185 respondents from 37 countries, nearly a third claim that science-based targets could deliver bottom line savings to their business.
However, Galvin said that time is limited to solve the problem of climate change, “We need serious action by 2020, we need to see a significant downward shift in global emissions and if we don’t start to see that, we are going to be in quite a bit of trouble as a society.
He concluded: “The fact we are seeing senior level executives in large global corporations expecting that their company’s products are going to be low carbon in ten years time is a really good sign.”
Alternative energy options
The UK has been considering its energy options for sometime, from turbine, to LED lighting and nuclear sources.
The £1.3bn Swansea Bay Tidal Lagoon was rejected last month (June 2018) by the government on grounds of “value for money”, which chair of Swansea Bay Tidal Lagoon, Keith Clarke said made a “mockery” of the government’s Industrial Strategy.
The project could’ve offered sustainable, locally-produced electricity and powered 155,000 Welsh homes for the next 120 years.
Britain has been investing further into its nuclear sector, with a £200m Nuclear Sector Deal announced by the government at the end of last month (June 2018) set to drive down the costs of nuclear energy.
Manufacturers are also looking to other ways to save energy and make their businesses more efficient.
For example, stainless steel product manufacturer, Fabdec has invested in LED lighting across its operations, which has improved energy efficiency by over 70%; this latest advancement in energy innovation will allow Fabdec’s workforce to experience proven health and well-being benefits too.
Further energy innovation in manufacturing