What is the impact of companies on global GHG emissions, and what are the SBTi’s goals to reach for companies?
As people around the globe face consequences of climate crises every day, the entities with power and influence are reexamining their business with a sustainable point of view. There are many sustainable solutions that your company can easily put in place to help fight this battle step by step.
To contribute to the ecological transition, goals at different levels of time and size do exist.
On the international scale: to be aligned with the goals of the Paris Agreement – to limit global warming to well below 2°C and pursue efforts to limit warming to 1.5°C – Science Based Targets (SBTi) sets emissions reduction targets for companies. An absolute reduction of 5 to 7% each year is expected internationally.
The EU is committed to an ambitious climate policy. Under the Green Deal, its goal is to become the first carbon-neutral continent by 2050. EU’s legislation about sustainability within companies is explained later in this article.
Companies contribute to carbon emissions in all their operations: burning fossil fuels for energy supply, buying supplies, transporting supplies and final products, and selling products that use energy during their life cycle. Reducing these carbon emissions comes with a carbon strategy, which provides an understanding of these emissions. That’s where carbon reporting comes in.
How carbon reporting benefits your company
- While consumption patterns are evolving, your business strategy should too.
The importance of climate change is increasing for environmentally-conscious customers when they are making buying decisions: they are looking for companies aligned with their personal values.
A low-carbon strategy could be an integral part of your business model: calculating your carbon impact and starting carbon reduction projects can improve your reputation and competitiveness. Did you know that more than 2 of 3 customers are willing to pay 35% more for a sustainable product?
To communicate about your climate strategy, be aware of greenwashing: stay 100% transparent with your customers! Tapio platform and experts give you guidance on this particular aspect.
- A carbon report helps you to identify climate risks and manage your costs
By understanding your direct and indirect impact, you will be able to engage your company in emissions reduction projects in different areas of the organisation. These operational changes resulting from a carbon report can lead to growth opportunities through new product development and to cost savings from production efficiencies.
It will highlight operations within your company that are the most relevant for your low-carbon strategy. Energy efficiency, for example, can drastically reduce energy costs, with an average internal rate of return of 48%.
- Creating a sustainable ecosystem with your employees and investors
As the environment is a central concern, especially among the new generation, 76% of millennials rank CSR as a priority in their job search. Understanding their needs and developing a climate strategy is non-negligible to continue to attract and retain top talent employees.
Sustainability is now a core component for investment decisions: it shows that your business is future-oriented and innovative.
- Respect and anticipate legislation
If you are an EU company listed as Public Interest Entities with over 500 employees, you are already under the legislation of the NFRD: you have to publish a non-financial report on the social and environmental impact of your activities.
If you are not in this category, stay conscious of the Corporate Sustainability Reporting Directive (CSRD), which will replace the NFRD in 2024 and will set new standards and obligations regarding this non-financial report.
The expected report should also detail:
- Sustainability-related risks
- Impact of your company on the environment
- Sustainability objectives and solutions developed to reach them
To reach global neutrality by 2050, the scope of companies under CSRD’s legislation will be expanded, covering over 50 000 companies. Here are the concerned companies :
- in 2024: companies under NFRD’s legislation (Public Interest companies with more than 500 workers)
- in 2025: all companies meeting two out 3 of these criteria: 250 or more employees, 40 million euros in net turnover and 20 million euros on the balance sheet
- in 2026: small and medium size companies (from 10 to 250 employees), with the possibility to delay their reporting for three years
- in 2028: non-European companies generating a net turnover of 150 million euros in the EU and which have at least one subsidiary or branch in the EU
Get ahead of regulations and stop the risks now by assessing your first carbon report with Tapio
Tapio’s all-in-one Carbon Strategy Platform is based on this protocol and provides you with everything you need to report your carbon emissions and to help you build or go further in your low-carbon transition.