This article first appeared on the website of the Business in the Community Ireland (BITCI), WBCSD’s Global Network partner in Ireland, under the link: https://www.bitc.ie/newsroom/low-carbon-pledge-report-80-of-companies-are-on-track-to-setting-science-based-targets-for-decarbonisation
Dublin - 10 October 2023: The 5th annual PwC report on the Business in the Community Ireland (BITCI) Low Carbon Pledge found that more businesses in Ireland are escalating their focus on sustainability and prioritizing decarbonization across all areas of their operations.
However, there is also an urgency on some to be more proactive in setting their targets and reducing their emissions, particularly around scope 3 emissions. Likewise, a greater focus on protecting nature is needed.
The Pledge has grown in strength and ambition since its inception in 2018. Now 68 companies have signed up spanning 11 different sectors, with Professional Services and Agribusiness / Food & Drink companies being the largest sector groups. These Pledge Signatories demonstrate their leadership in helping to achieve Ireland’s emissions reduction objectives and committing to setting Science Based Targets (SBTs) no later than December 2024 across their entire carbon footprint (Scope 1, 2, & 3).
The report found that:
- 50% of Pledge Signatories have fully set SBTs and had them approved by the Science Based Target Initiative. A further 31% have formally committed to setting SBTs. This means that 81% of the Signatories are well progressed to setting science-based targets by 2024 (up 11% from last year).
- While SBTs are short and medium-term targets, companies are increasingly committed to achieving longer term net zero ambitions with approximately half of Signatories having set a net zero science-based ambition.
- The significant number of Signatories that did not declare a net zero time frame is an indication of the complexity associated with understanding the required pathways to net zero. The report reveals just a slight improvement in the number of Signatories selecting a timeframe of 2030 or earlier across both scope 1 and 2 emissions (3% increase) and scope 3 emissions (4% increase).
- 34% of Pledge Signatories availed of Government support for energy management /carbon reduction within their organization. But only 50% have a dedicated budget for the completion of carbon reduction projects. 39 Signatories have developed new products/services with a lower/reduced environmental impact; 23 Signatories completed deep energy retrofit projects in 2022.
- Only half of signatories (51%) have integrated the Irish Government’s Climate Action Plan into their sustainability strategy. Signatories should consider how they can align to the Government’s economy-wide carbon budgets and sectoral emissions ceilings as a priority going forward.
- 85% of the Pledge Signatories publicly report non-financial data (up 4% from last year), with 78% being obligated to do so. 71% of this year’s Pledge Signatories receive external verification of their non-financial data, similar to last year (70%).
Ireland’s Minister for Climate Action, Communication Networks and Transport, Eamon Ryan, T.D., said “The collective action demonstrated by the 68 signatory companies to the BITCI Low Carbon Pledge shows their commitment to achieving a zero-carbon future. These companies are leading by example, working towards setting science-based targets for their entire carbon footprint, including value chain emissions. The growth and ongoing commitment of pledge signatories demonstrates the power of collective action and the network that is BITCI. If we are to address climate change and start to turn the tide on the devastating scenes we have seen across the globe recently, we need to work collectively across all sectors, including business. I encourage more companies to join in the Low Carbon Pledge as it continues to increase its ambition and impact.”
Half of Pledge Signatories have started work on impacts on nature
The Low Carbon Pledge survey also found that the nature crisis has been brought into sharp focus by businesses after spending many years in the shadows of the climate crisis. 50% of signatories have identified the specific impacts and dependencies on nature for their organization.
BITCI urges Pledge Signatories not to view the climate and nature crises in isolation. Climate change is having a negative impact on many of the world’s species and ecosystems, driving biodiversity loss. At the same time, protecting and restoring biodiversity is critical to mitigating and adapting to climate change. All businesses impact and depend on nature, and therefore should consider how they can incorporate nature into their climate action plans.
Robustness of data is critical
A common trend identified in the report was the challenges experienced by Pledge Signatories in calculating their carbon emissions, including across their supply chain. Data quality issues and supply chain complexity with a wide variety of Scope 3 emissions sources were noted. The importance of focusing on Scope 3 emissions was very evident with 48% of Pledge Signatories stating that scope 3 emissions make up over 80% of their carbon footprint.
Tomás Sercovich, CEO, Business in the Community Ireland (BITCI), commented: “With next year’s target only 15 months away, it is imperative that all Signatories set their SBTs to ensure that they play a proactive role in decarbonizing their operations. We are running out of time, businesses must be ambitious and challenge themselves and in turn, their suppliers, customers, employees and investors to adopt clear, unambiguous decarbonization pathways towards net zero and nature positive. While the Low Carbon Pledge is a collective movement of committed businesses, they can’t do it alone. Businesses need guidance, financial support and clarity from Government and the EU Commission to guarantee their compliance and action. COP28 must provide the urgency and action plans necessary to prioritize and accelerate collaborations with businesses to address the climate and nature crises.”
Kim McClenaghan, Partner, PwC Ireland Energy, Utilities & Sustainability Practice Lead, said: “The Climate Change Advisory Council in July said that Ireland will not meet its carbon budget targets unless urgent action is taken. The PwC report highlights that while progress is being made by Ireland’s largest companies, there is more to do.
“A near term focus on climate transition plans is essential in helping an organization navigate the complex shift to a low-carbon economy. These plans are gaining momentum as they not only contain climate commitments and targets, but also explain how those objectives fit strategically into an organization’s overall business strategy. An effective transition plan can provide an organization with a roadmap for driving sustained business outcomes as market dynamics change and society’s expectations shift. It is also important to map out the scope and scale of upcoming non-financial reporting regulations in order to be able to implement the required data collection and validation processes required under these challenging new requirements.”
The case studies within the report clearly highlight the ambition, challenge and progress each company has achieved in embedding sustainability practices within and across their business models. From Aldi significantly reducing food wastage to An Post electrifying its fleet to Ornua supporting the dairy sector with focus on biodiversity, CSR and responsible sourcing.