How high-emitting sectors are embracing climate science to build a low-carbon future

By Lila Karbassi,Chief Programmes, United Nations Global Compact

 

When the Paris Agreement was agreed in 2015, it set the basis for ambitious climate action into the future, setting a new sustainable strategy for the world.

Achieving the emissions reductions required to meet the Agreement’s ambitious goals will be no easy feat.

For countries to meet their national climate action pledges, deep emission cuts will be needed in industries across their economies.

The private sector is stepping up

Since 2015, the private sector has stepped up.

Companies representing around one eighth of total global market capitalization are now using climate science to define their future direction of travel and align themselves with the goals of the Paris Agreement.

Every sector has a role to play, and each day more and more are understanding that there is no future in high-carbon practices.

For the highest emitting sectors the steps they must take are nothing short of transformative.

However, ambition and innovation is the backbone of any successful business, and some of the world’s highest emitters are proving that they are more than up to the challenge.

Electric Utilities

Take the electric utilities sector. Major electric utilities including Enel, NRG Energy, EDP (Energias de Portugal) and SSE have committed to set science-based emissions reduction targets.

The sector is responsible for around a quarter of global emissions, and the demand for electricity is expected to grow substantially in the coming years.

To align itself with the Paris Agreement, the industry must reduce its emissions by 67% by 2030.

Many major companies within the sector are acting to reduce emissions within their own operations, with renewable energy supporting companies to meet ambitious climate targets.

EDP, for example, who have committed to reduce their scope 1 & 2 emissions by 55% per TWh, focused their attention on increasing their renewable energy portfolio. The company aims to exceed 75% renewable installed capacity by 2020.

Other companies are also looking to address emissions in their value chain.

For example, in 2017, NRG Energy encouraged 300+ of their suppliers to disclose climate impact information to CDP. Additionally, they claim demand-side management methods – such as offering customers smart-home technology – has helped their customers to avoid over 70 million tonnes of CO2.

Steel

The iron and steel industry is one of the most emissions-intensive industries in the world, contributing around 6% of global GHG emissions.

That said, the industry shows some encouraging signs of change. As it stands, six metal-production companies have committed to or have set science-based targets.

While several major companies are investing in research into more sustainable production processes, others are seeking to lower the emissions of the processes they currently use.

Mahindra-Sanyo, for example – currently the only steel company with an approved science-based target – aims to develop circular economy principles within their operations, ensuring that 65% of their material input for production is scrap.

Meanwhile, armed with the knowledge that water usage directly contributes to emissions, Mahindra-Sanyo is working to more effectively manage their water usage, reusing grey-water from their sewage treatment plant in their industrial cooling processes.

Cement

Cement is the most used man-made material in the world, and is currently the second-largest industrial emitter of carbon after steel.

In April 2018, CDP released a report urging the industry to take rapid action to decarbonize their operations and there has been an uptick in cement companies committing to the SBTi, including Irish cement manufacturer CRH and India’s Dalmia Cement and Ambuja Cement.

Some companies are cutting their footprint by utilizing waste materials in their production processes. However, this method usually sources its materials from other high-emitting processes (eg fly ash from coal production), and so is not viable as a long-term solution.

The industry is subsequently turning to investment in innovative technologies. Though these technologies remain at a pilot stage, increased funding represents a step in the right direction for the cement industry.

The unstoppable transition

There’s still a long way to go before the world is on track to achieve the Paris goals – speaking at United Nations Headquarters this week, UN Secretary-General António Guterres stressed that the case for action has never been more urgent – but the signs of change are there.

Between January and August, over 130 new companies joined the Science Based Targets initiative (SBTi), a more than 39% increase compared to the same period in 2017.

That’s over 480 global corporations, from 38 countries, that are now committed to setting emissions reductions targets in line with climate science, and with even the highest emitting sectors begin to ramp up their climate ambition, there is no turning back.

The transition to a low-carbon, resilient future is unstoppable and gaining pace.

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