Report outlines increase in companies signing up to low carbon pledge.
Ireland’s largest businesses are making steady progress on meeting net zero targets for greenhouse gas emissions despite global upheaval and uncertainties, a new report published today states.
The report prepared by PwC, in partnership with Business in the Community Ireland (BITCI), states that progress is being achieved by companies setting Science-Based Targets as part of a drive to move to net zero. Four years ago, BITCI launched its Low Carbon Pledge, with 47 companies signed up. That number has now grown to 70.
The report states:
70% of the Pledge Signatories are well progressed to setting Science-Based Targets (SBTs) by 2024, with the majority set to achieve their SBTs by 2030 or earlier.
66% have set a public net zero target, up from 42% last year, with the biggest challenge being cost.
Just over a quarter (26%) of respondents in the Low Carbon Pledge report have set their scope 1 and 2 net zero ambitions to 2030 or earlier; just 12% have set this for scope 3 emissions.
The report, Business Working Together for a Low Carbon Future, outlines the progress being made towards decarbonisation. Leading Irish businesses continue to take a primary role in the transition to a low carbon economy. The report was launched by Eamon Ryan, T.D., Minister for Environment, Climate, Communications and Transport.
Indicating more businesses are addressing climate change, 70 Irish companies have now signed the Pledge, up from 64 last year and 47 Signatories in 2019, the first year of the report. The Signatories span 11 sectors, with professional services firms, agribusiness/food & drink and financial services being the top three largest sectors represented.
Embedding Science-Based Targets (SBTs) in a company’s strategy is crucial. The Pledge requires that all Signatories commit to setting SBTs no later than 2024, and, significantly, review and assess indirect and supply chain emissions. This must include their entire carbon footprint (Scope 1, 2 & 3) and be in line with the Paris Agreement and the latest IPCC* findings. The ultimate goal of the Pledge is to achieve carbon neutrality and these targets are the first step towards a net zero world by 2050.
The report highlights that The Pledge Signatories continue to progress towards a low carbon economy.
70% of the Pledge Signatories are well progressed to setting Science-Based Targets (SBTs) by 2024, up from 68% last year. This includes over four out of ten (41%) who have set and approved SBTs and a further 29% who have formally committed to setting these targets. It is important to note that the majority of those who have not yet set SBTs have set emission reduction targets, which is an important step towards setting SBTs. The majority of respondents are set to achieve their SBTs by 2030 or earlier.
Whilst last year’s Low Carbon Pledge report was set against the challenging backdrop of the COVID-19 pandemic, this year’s report is set against another major challenge - the war in Ukraine. The war demonstrates the impact of global geopolitical risk and shocks on national energy security and should be viewed as providing policymakers (and businesses) with further justification for accelerating investment and delivery of the renewable energy future.
Other key findings in the report include:
42% of Pledge Signatories confirmed that business model resilience was the main driver for signing the Low Carbon Pledge. Reputation followed closely (23%). Other drivers included: stakeholder pressure, corporate and social responsibility and policy and regulation. Some cited signing up because it was simply the right thing to do.
Very significantly, 66% of the Pledge Signatories have set a public net zero target, up from 42% last year. This compares to just 31% of respondents in PwC Ireland’s 2022 CEO survey who said they had made a net zero commitment. Over a quarter (26%) of respondents in the Low Carbon Pledge report have set their scope 1 and 2 net zero ambitions to 2030 or earlier, but just 12% have set this for Scope 3 emissions. The biggest challenge to setting a net zero target, according to the Signatories, is ‘Cost’ (29%) followed by ‘Lack of technology’ (26%) and ‘No analysis done’ (23%).
35% of Signatories are making use of carbon offsets. Of these, 95% use offsets as part of their net zero strategy. Such offsetting is primarily focused in the transport/logistics and professional services sectors.
Over four out of five (81%) of the Signatory companies publicly report non-financial data, which is slightly above the portion (74%) that are obligated to do so. 70% of this year’s Signatories received external verification of their emissions data, up from 65% last year. Climate Disclosure Project (CDP) is the most popular reporting framework among Signatories (61%). Ensuring that the verification of emissions data is robust is critical and is the best method to mitigate against the risks associated with inaccurate, incomplete and inconsistent reporting.
The report notes that despite efforts of governments around the world, Green House Gas (GHG) emissions continue to increase. Without strengthening climate policies, GHG emissions are projected to lead to a median global warming of approximately 3.2°C by the end of this century.
The growing geopolitical uncertainty around the world may impact negatively on the journey towards net zero – the report highlights that there is a growing gap between ambition and action at the global level. At the same time, challenges remain to make meaningful change, mainly around the need for guidance (on base line calculations, reporting, standards etc), value chain (scope 3 emissions) engagement and just and fair transition that leaves no-one behind. Moving beyond net zero to a nature positive ambition will be important for businesses that want to ensure their strategy and operating model is future-proof. While there is a significant response to the net zero challenge, the nature agenda requires metrics and targets for improvement and reduction. The 2022-2025 Business in the Community Ireland Strategic Action Plan will focus its efforts and action on helping companies achieve this ambition.
The case studies identified in the report clearly signpost some of the key elements that companies should consider when setting their SBTs. Companies profiled this year are: Bank of Ireland, Cairn Homes, Dublin Bus, Keelings and Vodafone.
Speaking at the report launch, Eamon Ryan, T.D, Minister for Environment, Climate, Communications and Transport, said: “Now more than ever we need to close the ambition, emission, power supply and credibility gaps to truly drive urgent and just climate action at every level. As societies and economies bounce back from the pandemic so too have our carbon emissions. We are also now living through extraordinary times with spiralling global energy costs and inflation primarily caused by the invasion of Ukraine. The message has never been clearer; we have to move away from expensive and emitting fossil fuels, for our energy and economic security, but also so that we can meet our ambitious climate targets. This decade is our final opportunity to peak and slash emissions. Decisive business and political leadership can help us get to net zero much sooner than 2050. I call on you to engage in the movement led by Business in the Community Ireland. This is a crucial step toward the transformational change required."
Tomás Sercovich, CEO, Business in the Community Ireland (BITCI), commented: “The scientific community has used every possible opportunity to warn us of the irreversible changes we are causing to the planet and our livelihoods. That is why our targets must be based on science. We are making steady progress towards our ambition to have science-based emission reduction targets set no later than 2024. This is a mission we cannot afford to fail and we cannot leave anyone behind. Business must act and business must lead.”
Kim McClenaghan, Partner, PwC Ireland Energy, Utilities & Sustainability Practice Lead, said: “Companies should define comprehensive and ambitious strategies to achieve net zero that are consistent with the Paris climate agreement. It is very encouraging to see the progress of leading Irish firms and their clear commitment towards decarbonising their businesses. However, the majority must quickly move from statements of intent to mapping out clear decarbonisation pathways and formally signing up to SBTs.”
The report notes 5 key recommendations: Establish your true baseline; Understand your operating environment; Set ambitious targets; Report and verify; Engage your finance department and Continuous engagement with your suppliers and subcontractors.
While 70 companies have joined up to the Pledge, 69 Signatory companies’ data was analysed for purposes of this latest PwC report on the BITCI Low Carbon Pledge. These companies are:
A&L Goodbody, Abbvie, ABP Ireland, Accenture, Actavo, AIB Group, Aldi, Allianz, An Post, Arup, Axa Insurance, Aviva, Bank of Ireland Group, Bidvest Noonan, Boots, Britvic Ireland, BT, Grant Thornton, HEINEKEN Ireland, Hovione Ireland, Iarnród Éireann (Irish Rail), Irish Distillers, Irish Water, Janssen Pharmaceutical Sciences UC, Johnson & Johnson Vision Care, KBC Bank Ireland, KSG, Keelings, KPMG, Lidl Ireland, Marks & Spencer (Ireland) Ltd, Momentum Support, Mercury Engineering, Musgrave Group, Cairn Homes, Cook Medical, College Proteins Group, Compass Group Ireland, Cisco, Dawn Meats Group, Deloitte, DePuy Synthes, DHL Supply Chain, Diageo Ireland, Dublin Bus, Eir, EirGrid plc, Enterprise Rent-a-car, ESB Group, EY (Dublin), Fujitsu Ireland, Gas Networks Ireland, Ornua, Permanent TSB, PM Group, PwC, RTÉ, Sky Ireland, Sodexo Ireland, SSE Ireland, Stryker Ireland, Tesco Ireland, Three Ireland, Ulster Bank Ireland DAC, Veolia, Verizon, Virgin Media Ireland, Vodafone Ireland, William Fry.
As of June 2022, 70 companies have signed up to the BITCI Low Carbon Pledge, further to the above mentioned companies RSA Insurance and 123.ie have recently committed to the Pledge and their data will be included in next year’s report.
Case studies included in the report are: Bank of Ireland, Cairn Homes, Dublin Bus, Keelings and Vodafone. The case studies seek to highlight the challenges faced in different sectors and how companies have successfully addressed these hurdles.
The Low Carbon Pledge, now in its fourth year, is led by the Low Carbon Sub-group of the BITCI Leaders’ Group on Sustainability chaired by Mark Foley, CEO EirGrid and Denis O’Sullivan, MD Gas Networks Ireland.
BITCI’s Low Carbon Pledge is Ireland’s only collective commitment by the private sector on climate action and is recognised in the Government’s Climate Action Plan. The Pledge provides leadership, sets a collective ambition and drives practical action on the climate crisis. It is aligned with international best practice aimed at mobilising businesses towards a net zero emissions future.
Science Based Targets (SBTs) provide a clearly-defined pathway for companies to reduce greenhouse gas (CHG) emissions, helping prevent the worst impacts of climate change and future-proof business growth. Targets are considered ‘science-based’ if they are in line with what the latest climate science deems necessary to meet the goals of the Paris Agreement - limiting global warming to well below 2°C above pre-industrial levels and pursuing efforts to limit warming to 1.5°C.
*The Intergovernmental Panel on Climate Change (IPCC) is the United Nations body for assessing the science related to climate change.
A carbon offset is a reduction in carbon dioxide emissions in order to compensate for emissions made elsewhere.
Scope 1,2 and 3 emissions - explainer:
Scope 1: Direct GHG emissions occur from sources that are owned or controlled by the company. This segment comprises four principal emissions sources: process, stationary, fugitive and mobile.
Scope 2: Indirect greenhouse gas emissions from consumption of purchased electricity, heat or steam.
Scope 3: Other indirect emissions. Figure 2 displays the 15 categories of scope 3 emissions, as outlined by the Greenhouse Gas Protocol.
Founded in 2000, Business in the Community Ireland (BITCI) are the leading advisers on sustainability and corporate social responsibility. BITCI works with companies on all areas of sustainability from transitioning to a low carbon economy to creating inclusive and diverse workplaces. Visit www.bitc.ie
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