Clearing the air

Clearing the air

Science-based targets help businesses understand and reduce their impact on the environment.

The months-long Covid-19 pandemic has taken a terrible toll on economies and the wellbeing of people worldwide, but it's certainly not the only threat humanity faces.

With so much attention and energy being devoted to the pandemic, many people have taken their eye off the longer-term existential threat posed by the climate crisis.

If there was any silver lining in the Covid cloud, it was that restrictions imposed by governments to contain the pandemic -- in the form of border closures, flight cancellations and lockdowns -- led to drastic changes in energy use and declines in global carbon dioxide emissions.

Research published in May in the journal Nature Climate Change showed that daily global CO2 emissions plunged by 17% by early April compared with 2019 levels. The weeks-long curtailment of economic activity in China led to a 25% reduction in the country's carbon emissions.

Air quality also improved. Residents of cities such as Beijing marvelled at how blue their skies had become. Data from the Centre for Research on Energy and Clean Air (Crea) showed that China's average PM2.5 levels fell by 33%, while nitrogen dioxide (NO2) levels dropped by 40% from the same period last year.

However, after lockdowns were lifted, China's CO2 emissions shot back up, rising 4-5% year-on-year in May, together with NO2, PM2.5 and sulphur dioxide (SO2) readings. The result was a surge of air pollution past pre-coronavirus levels. It was driven by industrial emissions after coal-fired power generation, cement manufacturing and oil consumption got back on track.

Generating electricity from renewable sources is a priority for businesses.

MEASURE AND MANAGE

Business sits at the heart of the solutions required to reverse the climate emergency. But first, they need to know exactly how their activities are affecting the climate -- as the old saying goes, something cannot be managed if it cannot be measured. In this case, measurement tools are required so that science-based targets can be set.

"Being able to address climate change as a business, first you need to understand how to measure the impact your business has on the environment," says Rainbow Cheung, senior manager for sustainability at Salesforce Asia Pacific, a cloud-based company specialising in customer relationship management (CRM) services.

Targets adopted by companies to reduce greenhouse gas (GHG) emissions are considered "science-based" if they are in line with the level of decarbonisation required to limit the rise in global temperature well below 2 degrees Celsius, and with the ambition of getting to 1.5C or lower.

The targets are championed by the Science Based Targets initiative (SBTi), a collaborative effort involving the Carbon Disclosure Project (CDP), a UK-based monitoring group; the UN Global Compact; the World Resources Institute (WRI) and the World Wildlife Fund (WWF). It helps businesses set ambitious but achievable targets by independently assessing and offering resources, workshops and guidance to reduce barriers to adoption.

Worldwide, a total of 924 companies -- including some global household names like Tesco and Coca-Cola -- are currently participating, with 427 having set their targets. Three Thai companies have signed on: PTT Global Chemical and NR Instant Produce Co Ltd have expressed their commitments, while Fortune Parts Industry Plc has moved to the next stage by setting its targets.

"Science-based targets are a way to alleviate some of the negative impacts by focusing on deep decarbonisation," said Paola Delgado, corporate engagement manager of the SBTi, at a recent online forum organised by various UN organisations.

For example, she explained, to measure greenhouse gas emissions, most companies across the world use the Greenhouse Gas Protocol, which has become a global standard for measuring, managing and reporting emissions.

The Greenhouse Gas Protocol categorises emissions into three scopes. Scopes 1 and 2 cover all the direct and indirect emissions from internal operations including fuel combustion on-site such as company facilities and vehicles, as well as electricity purchased and used by the company.

"The building and construction sector accounts for almost 40% of greenhouse gas emissions worldwide," says Esther An, chief sustainability officer of City Developments Ltd. SUPPLIED

Scope 3 emissions represent all other indirect emissions from the entire value chain of which the company is a part. Such activities -- from sources not owned by the company but linked with it through the supply chain and other ways -- typically are the greatest share of the carbon footprint. For example, they can include emissions associated with business travel, employee commuting, waste and water, and investment.

Committed companies must meet the criteria for setting a science-based target. The target boundary must be company-wide, covering all emissions included in the GHG Protocol, and must cover Scope 1 and 2 emissions. The commitment timeframe must cover a minimum of five years. Companies are also required to disclose their greenhouse gas emissions on an annual basis.

The commitment might seem daunting to some companies, especially at a time when keeping costs under control has become a priority. However, technology is making measurement easier and cheaper.

Salesforce last year launched Sustainability Cloud, which is a carbon-accounting tool that helps businesses to analyse their emissions coming from energy usage and employee activities, offering a 360-degree view.

"Sustainability Cloud helps our customers tackle climate change more effectively and accelerate their efforts toward low carbon emissions and ultimately carbon neutrality," Ms Cheung told Asia Focus by email.

"Businesses can also use these insights to show their commitment to being a carbon-conscious company to their customers, employees, potential investors and other stakeholders," she added, pointing out that the data will help "businesses to identify potential risks and start making changes".

Drought and other extreme weather events are expected to worsen.

LEARN FROM THE DOERS

The energy sector is at the front line of this complex issue. It is by far the largest source of emissions, accounting 73% of the worldwide total. The energy sector consists of transport, electricity and heat, buildings, manufacturing and construction, and other fuel consumption.

"The building and construction sector accounts for almost 40% of greenhouse gas emissions worldwide," said Esther An, chief sustainability officer of City Developments Ltd, a Singapore-based real estate company. It is the only company in Southeast Asia listed on the CDP's annual "A List", a recognised standard for corporate environmental transparency.

"The science-based target initiative really helped to improve transparency and also helped us to step up even more stringently on our carbon management."

Companies with a resilient business model and improved climate indices have outperformed their counterparts during the pandemic, she added.

"The GHG emissions from electricity usage are the highest," said Hiromitsu Hatano, manager of the sustainability management division at Ricoh. The Japanese multinational imaging and electronics company aims to commit to net-zero greenhouse gas emissions and 100% renewable electricity by 2050.

Ricoh is a recycling-oriented company that has been gradually promoting the electrification of factory equipment and conversion to electric vehicles. But there are still challenges, said Mr Hatano.

"Our supply chain is very long, so the scope 3 emissions are much higher than those of scope 1 and 2. Therefore we have started to support suppliers' decarbonisation activities."

"You can have good things to report only if you have taken strong action," says Anirban Ghosh, chief sustainability officer of Mahindra Group. SUPPLIED

As a cloud company, Salesforce has to acknowledge that its direct environmental impact includes emissions associated with high electricity consumption at data centres, said Ms Cheung, highlighting that the company is focusing on sourcing clean and renewable energy.

Besides using its own Sustainability Cloud to measure its carbon footprint across all operations, Salesforce also commits to reduce Scope 1 and 2 emissions by 50% in 2030. It has advanced the commitment by setting a goal to reach a science-based target in line with a global temperature rise of 1.5C or less.

Once businesses get started on their journey toward the targets, some find that they can exceed their own expectations.

"It is possible to achieve more than what was originally thought. This leads to steadily increasing ambition," said Anirban Ghosh, chief sustainability officer of Mahindra Group, an Indian conglomerate operating in cars, tractors and manufacturing industries, whose 20 companies have committed to achieving science-based targets.

Mr Ghosh highlights the importance of the commitments and reporting. Both "are actually mutually reinforcing", because "you can have good things to report only if you have taken strong action", which is driven by ambitious public commitments.

Besides making a determined commitment, "empowering colleagues to identify areas for climate action and implement projects that are great for planet profit" is also important because it is a way to activate the "ambition loop", he added.

"To accelerate climate change action, all stakeholders must be involved," Ms Cheung said, noting that businesses must commit to making decisions that benefit all stakeholders, and not just shareholders, by staying transparent about the actions.

Mr Ghosh pointed out that technology is a key solution to help businesses achieve their climate goals. After all, it is impossible to replace existing practices without offering alternatives.

Mr Hatano said switching to electricity from renewable sources is the most important step. "But since the availability of renewable energy is different from region to region, it's necessary to change the short-term approach depending on the regional options."

The Sustainability Cloud tool helps businesses measure their impact, says Rainbow Cheung, senior manager for sustainability at Salesforce Asia Pacific. SUPPLIED

POLICY PUSH

National and intergovernmental organisations play a significant role in order to foster an inclusive and smooth transformation to a low-carbon economy.

The European Union (EU) is doing its part through the European Green Deal. It is "a new growth strategy aims to transform the EU into a fair and prosperous society with a modern resource-efficient and competitive economy where there are no net emissions of greenhouse gases in 2050", said Giuseppe Busini, a deputy head of the delegation of the EU to Thailand at the online forum.

The Green Deal is a wide-ranging strategy, covering a large number of sectors: clean energy, sustainable industry, building and renovation, farm-to-fork strategy, sustainable mobility, and biodiversity.

Shaping external policies including trade policies and market forces is also important as they have a crucial role to play to achieve the transition to sustainability, said Mr Busini.

The EU, as a strong advocate of multilateralism, has realised that if it implements policies at home, they are likely to have an impact elsewhere.

"Sustainable policies will only be successful as long as they are adopted and implemented by both the European Union and the rest of the world too," Mr Busini added.

Science-based targets focus on "deep decarbonisation", says Paola Delgado, corporate engagement manager of the Science Based Targets initiative. SUPPLIED

The Philippines, meanwhile, has been looking to link climate change and basic human rights.

Last year, the National Commission on Human Rights announced the findings of a groundbreaking inquiry that linked the activities of the "Carbon Majors" -- a label applied to 47 of the world's biggest fossil fuel firms -- to human rights impacts on climate change.

The commission began its work in 2016, soliciting responses from giants such as Chevron, ExxonMobil, BP, Shell, Total, BHP Billiton, Suncor and ConocoPhillips about their alleged role in causing death and financial loss as a result of climate-induced disasters in the Philippines.

The main purpose of using an inquisitorial process to conduct an inquiry was not to establish legal liability but rather to look into the reality of climate change, said commissioner Roberto Eugenio T Cadiz. That way, he said, the inquiry could elaborate on responsibilities of all parties, including governments and private enterprises, and how they contribute to global warming caused by human activity.

Legal liability or responsibility oil the part of businesses is not clearly established under international laws; however, there should be domestic laws in the countries where they are situated to hold all businesses liable, Mr Cadiz suggested.

Even without the laws, he said, businesses have "a moral obligation to adhere to certain standards". For example, they should have a clear target as part of their due diligence compliance, should minimise their carbon footprint, and should adhere to the principle of transparency not only toward their shareholders but toward the public in general.

"Now the primary obligation of the states in this regard is to create a policy that will hasten the transition of the global economy, from a dirty carbon fuel to a clean renewable energy system," he added.

"Our supply chain is very long. … Therefore we have started to support suppliers' decarbonisation activities," says Hiromitsu Hatano, manager of the sustainability management division at Ricoh. SUPPLIED

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