Your Quick Guide to Scope 3.1 Emissions – the How, What and Why!
In pursuit of their climate goals, businesses are on a quest to uncover the holy grail of decarbonization – identifying where emissions come from and reducing those. Most understand that the answer often lies within the supply chain – and more precisely in Scope 3.1 emissions (Purchased Goods and Services).
This article gives you an introduction to Scope 3.1, why these emissions play a major role, which methods you need to calculate them, and why supplier engagement helps you reducing them.
Scope 3 emissions encompass in 15 different categories all indirect emissions generated throughout an organization’s value chain, from the extraction of raw materials to the disposal of products. Scope 3.1, one of those 15 categories, specifically refers to the carbon emissions associated with the products or services an organization purchases. These emissions are bought in from suppliers and are often beyond the organization’s immediate control.
Why is Scope 3.1 Important?
Understanding and addressing Scope 3.1 emissions is crucial for several reasons:
Holistic Climate Impact: Scope 3.1 emissions often constitute the largest portion of an organization’s carbon footprint. By ignoring them, companies fail to address a significant part of their climate impact.
Stakeholder Expectations: Stakeholders, including investors, customers, and regulatory bodies, increasingly demand transparency and action on Scope 3.1 emissions. Failure to comply can lead to reputational damage and financial consequences.
Regulatory Compliance: As governments worldwide tighten climate regulations, monitoring and reducing all emissions, but especially the significant portion of Scope 3.1 emissions, help companies avoid legal and financial penalties.
How to Calculate Scope 3.1 Emissions
Calculating Scope 3.1 emissions according to GHG Protocol can be a complex task, but essential for informed decision-making. Companies can chose from four different methods. The more effort these methods require, the better the results they produce:
Spend-Based Method
Calculation Basis: This method relies on the financial expenditures associated with products or services. It calculates emissions based on the amount of money spent on procurement or outsourcing.
Benefits: The spend-based method is relatively simple and cost-effective to implement, making it suitable for organizations with limited resources. It provides a high-level overview of emissions associated with the supply chain.
Average-Data Method
Calculation Basis: The average-data method uses industry or sector-specific emission factors to estimate emissions. These factors are based on aggregated data from similar organizations.
Benefits: It offers a quick and accessible way to estimate emissions, making it a good starting point for companies new to Scope 3.1 calculations. However, it may not be as accurate as other methods because it relies on generalized data.
Hybrid Method
Calculation Basis: The hybrid method combines elements of both the spend-based and average-data methods. It considers financial data along with industry-specific emission factors for a more tailored approach.
Benefits: This approach strikes a balance between simplicity and accuracy. It provides a more customized estimate of Scope 3.1 emissions while still being feasible for organizations without extensive data resources.
Supplier-Specific Method
Calculation Basis: The supplier-specific method involves collecting detailed data directly from suppliers, including emissions from their operations and transportation. It offers the most granular and precise calculation.
Benefits: This method yields the most accurate and specific results, allowing organizations to pinpoint emission hotspots within their supply chain. It also fosters transparency and collaboration with suppliers, encouraging joint efforts to reduce emissions.
Why the Supplier-Specific Method Stands Out
While the supplier-specific method achieves by far the best results compared to the other methods, it is also the most challenging to implement. The supplier-specific method is distinguished by its precision, aiming to provide a granular view of emissions associated with each supplier. However, this precision comes at a cost:
Data Variability: Suppliers’ emission data can be highly variable, making it challenging to standardize and aggregate across a diverse supplier base.
Data Availability: Obtaining supplier-specific data requires active engagement and cooperation from numerous suppliers, which can be time-consuming and complex.
Data Validation: Verifying the accuracy of supplier-reported emissions adds another layer of complexity, as discrepancies can arise.
Kickstart your Supplier-Specific Data Collection
The Climate Intelligence Platform, a specialized Supplier Data Collection and Engagement Solution, offers a streamlined approach to tackle these challenges.
Start tracking progress towards your Scope 3 targets by accessing existing data from over 35.000 companies and proceed by gathering primary data from your suppliers. Utilize the supplier-specific data to refine your company’s own greenhouse gas emission calculations and reduction tracking.
The platform is used by leading companies across industries from Telecommunication, to Automotive and Manufacturing, over Food, Energy and FMCG to reach their Scope 3 targets.
In order to meet climate targets within their supply chain (Scope 3), companies must gather and interpret extensive data on emissions, climate risks, and other factors from their suppliers. Until now, this widely dispersed data could only be acquired through manual processes and individual supplier consultations, demanding significant time and resource investments. However, a transformation is underway. Advanced AI technology now enables the quick and automatic aggregation of climate-related supplier data from public sources, facilitating its analysis for scope 3 decarbonization.
How exactly can this work? That’s what we shared at CHOICE Event #61 with Yasha Tarani (CEO) and Nikolas Martens (Head of Engineering) from The Climate Choice. Find here their most important insights.
Why is Scope 3 Decarbonization important?
Deloitte 2023 CxO Sustainability Report
Deloitte conducts an annual study that delves into the priorities of top executives (CxOs) in large companies across the globe, shedding light on why they choose to address specific issues. Their findings reveal a significant shift in the corporate landscape. Notably, climate change has ascended to a position of paramount importance, second only to economic outlook. This signals a pivotal moment where climate concerns have permeated the highest echelons of corporate leadership. However, it’s imperative to recognize that the impetus to act on climate issues doesn’t merely stem from regulatory pressures. It also emanates from a multitude of stakeholders who demand action.
One crucial aspect that emerges prominently is the role of supply chain emissions (Scope 3). These emissions represent the lion’s share, comprising an average of 85% of a company’s total emissions. Yet, addressing supply chain emissions is a formidable challenge due to their indirect nature, which presents multiple complexities and obstacles.
Why is Scope 3 Decarbonization so hard?
Companies striving to meet their Scope 3 decarbonization targets encounter several significant challenges when it comes to effectively utilizing supplier-specific data. These challenges can impede their ability to take meaningful actions. Here’s a breakdown of these challenges and their implications:
Continuous Tracking:
Challenge: Managing annual data collection from a vast network of thousands of suppliers can be a daunting and resource-intensive task.
Implication: This continuous tracking requirement demands a robust system that can efficiently gather data from a multitude of sources without overwhelming the company’s resources. It also necessitates real-time or near-real-time data updates to stay current.
Data Quality:
Challenge: Supplier data often comes in various formats, documentation styles, and may lack comparability, making it difficult to draw meaningful insights or comparisons.
Implication: Ensuring data quality is paramount. Implementing standardization protocols, data validation, and normalization processes is crucial to derive accurate and actionable insights from diverse data sources.
Assessment Fatigue:
Challenge: Suppliers are frequently inundated with data requests from different customers, each with varying data needs, creating a state of assessment fatigue.
Implication: Companies must adopt a more strategic approach to supplier engagement. This includes minimizing repetitive requests, streamlining communication, and aligning data requests with suppliers’ capabilities and priorities to maintain productive relationships.
Lack of Incentives:
Challenge: Encouraging suppliers to actively engage in decarbonization efforts can be challenging, as they may lack motivation or a clear understanding of the benefits.
Implication: To address this, companies must develop a Theory of Change that outlines the incentives and benefits for suppliers to participate in sustainability initiatives. This may include cost savings, improved market access, or enhanced brand reputation.
The solution: the Climate Intelligence Platform
At The Climate Choice, we focus on solving the key challenges of Scope 3 decarbonization. We have therefore built the first climate-specialized platform that unites supplier data & engagement to rapidly reduce emissions. Our approach is designed to help companies kickstart their supplier climate program in days rather than in months.
So what does the approach look like? Here are the key steps:
Leveraging AI for Scope 3 Analysis: Begin by harnessing the power of artificial intelligence (AI) to analyze suppliers with publicly available data. This automated analysis provides valuable insights into their environmental performance, emissions, and climate-related practices. This initial assessment sets the foundation for informed decision-making.
Engaging Suppliers without Public Data: Recognize that not all suppliers may have publicly accessible environmental data. For such suppliers, the approach shifts towards assessing their maturity level in terms of sustainability practices. This assessment serves as a starting point, allowing you to provide constructive feedback and guidance.
Focused Benchmarking and Incentives: Identify your top suppliers and those contributing significantly to emissions within your supply chain. These key players warrant a more detailed and granular benchmarking process. Additionally, consider implementing incentive mechanisms to encourage these suppliers to actively reduce their environmental footprint. Incentives can take various forms, such as financial rewards or preferential treatment within your supply network.
The first step: AI Supplier Screening
To speed up the launch of your supplier engagement program while minimizing resource requirements, we present our new AI supplier screening program. This program leverages cutting-edge technology to streamline the process, ensuring efficiency and effectiveness throughout. Here’s a breakdown of how the AI supplier screening program operates:
1. Comprehensive Data Collection: The program incorporates an AI-driven data pipeline that autonomously gathers detailed Scope 3 information from diverse sources. This data pipeline is designed to collect granular data pertinent to your supplier profiles.
2. Robust Data Analysis: Once the data is collected, our system performs a meticulous analysis. It scrutinizes a range of climate data documents and taps into publicly available data sources to create a comprehensive profile of each supplier. This analysis extends beyond surface-level assessments to provide a deeper understanding of their climate-related practices.
How AI Supplier Screening Works:
List of Suppliers: The process commences with a list of your suppliers, encompassing the entirety of your supply chain network.
Identify Company: The AI system employs advanced algorithms to identify each supplier as a distinct entity, ensuring accuracy in the subsequent steps.
Identify Reporting Entity: It further distinguishes the reporting entity within the supplier organization, recognizing the entity responsible for providing climate-related data.
Identify Data Sources: The program identifies and categorizes the various data sources associated with each supplier, whether internal or external.
Extract & Verify Data: Leveraging state-of-the-art data extraction techniques, the AI system extracts and verifies the pertinent climate data from these sources, ensuring data accuracy and reliability.
What are the tangible outcomes of the AI supplier screening?
The AI supplier screening program yields a range of tangible outcomes that can significantly benefit your organization in its pursuit of Scope 3 goals. Here are the notable advantages and insights that emerge from this innovative approach:
Automated Analysis of Thousands of Companies: The program’s capabilities extend to the automated analysis of thousands of companies within your supply chain ecosystem. This extensive coverage ensures that you can comprehensively assess and engage with a wide array of suppliers, maximizing the program’s effectiveness.
Inclusion of Meta Data: In addition to climate-specific data, the analysis encompasses meta data that provides valuable context. This includes details such as revenue figures and sectors in which these companies operate. Such comprehensive insights enable more informed decision-making.
Audit-Ready Data: The data generated through the AI screening program is audit-ready, ensuring that it meets the highest standards of accuracy and reliability. This audit readiness is pivotal, especially when it comes to compliance requirements and reporting.
Accessibility via API: The convenience of accessing the data via an Application Programming Interface (API) streamlines its utilization within your organization’s existing systems and workflows. This seamless integration enhances the efficiency of your sustainability initiatives.
Key Insights Uncovered
The program goes beyond data collection to uncover key insights that can inform your sustainability strategy. These insights encompass:
Use Case Example: Supplier Maturity Structure
Supplier Maturity Structure: You gain a clear understanding of the maturity levels of your suppliers concerning sustainability practices. This allows you to tailor engagement strategies accordingly.
Trends in Climate-Related Data: The program identifies and highlights trends in climate-related data, providing valuable intelligence for decision-making and future planning.
Scope 3 Emission Breakdowns: Detailed breakdowns of Scope 3 emissions help you pinpoint areas of focus and prioritize decarbonization efforts.
Decarbonization Actions: The program’s analysis identifies potential decarbonization actions that can be taken. It offers actionable pathways to reduce emissions and improve sustainability performance.
Join the Early Access Program today
You can now seize the opportunity as one of the early adopters, accessing the full array of AI benefits for your Scope 3 targets through our exclusive Early Access program. By joining, you’ll experience firsthand the advantages we offer. We anticipate an average savings of 90% in both time and cost for the collection and analysis of supplier data. Don’t miss out on the chance to be at the forefront of this transformative technology.
3 Key Steps to Use Competitive Climate Intelligence
In today’s rapidly evolving business landscape, staying ahead of the curve requires more than just traditional market insights. The emergence of the future low-carbon economy has ushered in a new era of competitiveness. Companies now need to start navigating the complexities of climate information and strategies to maintain their edge. This is where the concept of competitive climate intelligence comes into play. In this article, we’ll delve into what competitive climate intelligence entails and outline three essential steps to effectively leverage it for your company’s success.
Understanding Competitive Climate Intelligence
“Competitive climate intelligence” is the systematic gathering and analysis of climate-related data and insights to drive informed decision-making. Stemming from the broader concept of “competitive intelligence,” which focuses on understanding market dynamics and competitors, competitive climate intelligence delves into climate-related aspects of business strategy. This intelligence goes beyond understanding the environmental impact of your operations. It encompasses understanding how your competitors are positioning themselves, identifying emerging opportunities, and assessing potential risks.
Benefits of Competitor Climate Insights
Here’s why incorporating information about your competitors’ climate strategies is crucial for positioning your business at the forefront:
Benchmarking: Analyzing your competitors’ climate data allows you to benchmark your performance against industry leaders. This comparison helps identify gaps in your sustainability efforts and set ambitious yet realistic goals to outperform.
Innovation Insights: Monitoring competitors’ climate strategies unveils innovative practices that can inspire your company’s approach. By learning from their successes and failures, you can adopt best practices and refine your own initiatives.
Market Positioning: Understanding how competitors position themselves in the low-carbon landscape helps you differentiate your brand. Identifying gaps in the market and addressing unmet sustainability needs can accordingly enhance your company’s appeal to conscious consumers.
Risk Management: By assessing competitors’ responses to climate risks and regulatory changes, you gain insights into potential challenges and opportunities. This proactive approach ensures your business is prepared for shifts in the regulatory and consumer landscape.
Collaboration Opportunities: Collaborative efforts within your industry can amplify impact. Analyzing competitor data highlights potential partners for joint sustainability initiatives, fostering a collective drive towards a greener future.
Investor Confidence: As environmental concerns grow, investors increasingly value companies with robust climate strategies. Demonstrating a comprehensive understanding of competitors’ approaches bolsters your credibility and attractiveness to investors.
Adaptive Strategies: The low-carbon economy is evolving swiftly. Analyzing competitor climate data aids in fine-tuning your strategies based on real-time insights. This adaptability allows your company to seize emerging opportunities and stay resilient in the face of change.
The key steps for Competitive Climate Intelligence
So how can your company take advantage of this and successfully implement climate competitive intelligence? Here are the three most important steps.
Step 1: Data Gathering and Analysis
The foundation of competitive climate intelligence lies in robust data collection and analysis. The first step is to identify and gather relevant data from both internal and external sources. While internal data might include your company’s carbon footprint and sustainability initiatives, external data encompasses market trends, competitor activities, regulatory changes, and public sentiment around climate issues. This is where AI tools shine, as they can efficiently sift through vast amounts of public data to provide actionable insights. By utilizing these tools, you can uncover hidden patterns, emerging trends, and valuable competitor strategies that inform your decision-making.
Step 2: Integration with Business Strategy
Climate intelligence should not exist in isolation; it must be seamlessly integrated into your company’s overarching business strategy. This involves aligning climate-related goals with core business objectives and identifying synergies that drive value. For example, using climate intelligence to optimize supply chain efficiency not only reduces emissions but also enhances cost savings. By weaving climate considerations into product development, marketing, and operations, you not only contribute to sustainability but also bolster your competitive position in the market.
Step 3: Continuous Monitoring and Adaptation
The future low-carbon economy is dynamic, with changes in regulations, technologies, and consumer preferences shaping its trajectory. As such, competitive climate intelligence is not a one-time effort but an ongoing practice. Establish a framework for continuous monitoring and adaptation. Regularly update your data sources, track competitor moves, and stay informed about industry shifts. This adaptive approach enables you to seize emerging opportunities swiftly and mitigate risks effectively.
Conclusion
As the business landscape transforms to embrace the challenges and opportunities of a future low-carbon economy, competitive climate intelligence emerges as a critical tool for success. By systematically gathering, analyzing, and integrating climate-related data, businesses can not only contribute to a sustainable future but also enhance their competitive advantage. With the aid of AI tools, the data collection process becomes more efficient, empowering companies to make informed decisions. Embrace these three key steps and start now to position your company at the forefront of the evolving business paradigm.
Your Cheat Sheet: Climate Regulations to be aware of in 2023
Your Quick Guide through recent Climate Regulation Updates
We all experience it this summer: Climate change poses significant threats to the global economy, to humans and the planet. Time to act, especially also in the financial world. As a consequence, regulators worldwide are addressing climate-related risks. In the last weeks and months, several crucial developments in that area took place across the globe! Let’s delve into what happened in terms of climate regulations in America, Europe, International – and what’s coming up soon.
Quick insight summary: As climate management and disclosure becomes more standardized and mandatory, companies must ensure high-quality data by implementing strong data governance, strategies and control mechanism to maintain audit-ready information throughout the value creation process.
United States of America
The upcoming Securities and Exchange Commission (SEC) climate disclosure rule in the US requires large companies to disclose their carbon footprints alongside financial statements. The SEC’s proposal is aligned with existing recommendations from the Task Force on Climate-related Financial Disclosures (TCFD)and will require organizations to disclose certain climate-related information including greenhouse gas (GHG) emissions, Scopes 1, 2 and 3 and disclosure of climate-related risk, impacts, targets and goals.
The US Commodity Futures Trading Commissionannounced its second voluntary carbon markets meeting. It aims to discuss private sector efforts in high-quality carbon credits, current market trends, public sector initiatives, and how CFTC can facilitate markets for high-quality carbon credit derivatives.
TheInternational Sustainability Standards Board (ISSB) will assume the role of monitoring companies’ climate-related disclosures. This task was previously handled by the FSB Task Force on Climate-related Financial Disclosures (TCFD). This development comes after the ISSB published global standards for sustainability and climate reporting, which incorporated the TCFD’s recommendations. The move is seen as an attempt to unify sustainability reporting standards, but some may question whether it could pose a threat to independence given the ISSB’s expanded responsibilities. Nonetheless, the decision recognizes the ISSB’s commitment to building upon the TCFD’s legacy and providing more clarity in the realm of climate-related initiatives.
Europe
The European Commissionsuggests to ease raising Climate and ESG disclosure rules for companies to reduce regulatory burdens. It published the final version of the European Sustainability Reporting Standards (ESRS) on July 31. The climate regulation shifts initially mandatory indicators, including greenhouse gas emissions disclosures, into the scope of materiality assessments, making them reportable if relevant to a company.
But: “If an undertaking concludes that climate change is not a material topic and that therefore it does not report in accordance with that standard, it shall disclose a detailed explanation of the conclusions of its materiality assessment with regard to climate change. This provision is included in recognition of the widespread and systemic effects of climate change on the economy as a whole.”
Under the CSRD, a company needs to implement processes to properly assess and collect climate-relevant information, for their own company and their supply chains. Described as such:
This information must be reported in accordance with European Sustainability Reporting Standards (ESRS). This information shall include information related to short-, medium- and long-term time horizons, as applicable, and it shall contain: The principal actual or potential adverse impacts connected with the undertaking’s own operations and with its value chain.
This obligation is closely related to the due diligence duties to identify adverse impacts, as introduced by the proposed Directive on Corporate Sustainability Due Diligence Directive (CSDDD). The proposed CSDD Directive will thus lead to more complete and effective reporting across global value chains. Part of this proposal is the introduction of a link between variable remuneration of directors and the sustainability targets of the company. Directors of companies that fall within the scope of the proposed directive also need to take into account the consequences of their decisions with respect to sustainability matters, climate change and human rights.
European Financial Reporting Advisory Group (EFRAG) introduced sector-specific Sustainability Reporting. EFRAG announced plans to create three advisory panels for sector-specific sustainability reporting rules for the capital markets, and insurance sectors. These panels will provide tailored reporting guidance for financial institutions starting in September, with applications open until July 31.
International
The Australian Government introduced mandatory Climate-Related Financial Disclosure Requirements for businesses and financial institutions. The climate regulations closely align with the ISSB’s climate standards, focusing on governance, strategy, risk management, and metrics and targets. Regulations have been proposed by the nation to start at the beginning of the 2024/2025 financial year.
Monetary Authority of Singapore (MAS) drives the early phase-out of coal-fired power plants. MAS launched a public consultation on incorporating financing for the early phase-out of coal-fired power plants into the Singapore-Asia Taxonomy, which classifies investments supporting a 1.5°C transition pathway.
The International Sustainability Standards Board (ISSB) has released its first set of sustainability and climate-related disclosure rules, IFRS S1 and IFRS S2, based on voluntary reporting frameworks. These standards aim to present sustainability efforts in a robust and comparable manner, facilitating informed capital allocation decisions by investors. It gets international adoption in countries like Canada, the UK, Japan, Singapore, and Nigeria are considering implementing ISSB standards. The International Organization of Securities Commissions (IOSCO) is now also endorsing them, accelerating their global adoption.
These developments show a growing commitment among regulators worldwide to tackle climate-related risks and enhance reporting. Companies should closely follow the rising need for climate management processes and contribute to a more sustainable and resilient future. Stay tuned for further updates on the global climate transformation.
Top 5 Questions AI can answer for Scope 3 Decarbonization
Artificial intelligence (AI) has emerged as a powerful tool in addressing complex challenges. Specifically, its potential for tackling climate change has gained significant attention. Today, effective climate actions require us to collect and interpret vast amounts of data on emissions, climate risks, and more. Not only from one’s own company, but also along whole value chains. This is because most of a company’s emissions – even up to 90% – occur in Scope 3. A transparent data basis is therefore needed on which to effectively collaborate with suppliers on joint decarbonization measures.
This is where AI plays a crucial role. According to a survey by Boston Consulting Group, 87% of 1,000 executives consider AI a helpful catalyst for climate transformation. Through the use of AI, companies can now quickly access data from public sources about their suppliers on a large scale, allowing them to better collaborate with them on decarbonization efforts. On top of that, they can gain essential strategic insights about the climate maturity of their business partners and competitors. In this article, we explore the top five questions that AI can answer for Scope 3 decarbonization, empowering you to make informed and impactful climate decisions.
1. Has the company calculated Scope 1, 2, and 3 emissions?
When assessing the climate maturity of your supply chain, one of the fundamental questions in evaluating a company’s commitment to decarbonization is the extent to which they have calculated and disclosed their greenhouse gas (GHG) emissions. AI can help assess whether a company has comprehensive coverage of Scope 1, 2, and 3 emissions. By analyzing public data, AI algorithms can identify relevant information from your supplier’s sustainability reports, public statements, and other disclosures. This allows you to assess your own emissions in more detail and compare them with industry benchmarks along your supply chain, setting a foundation for meaningful decarbonization strategies.
2. Has the company set climate targets?
Setting ambitious climate targets is crucial to driving action and holding companies accountable for their emission reduction efforts. The next important question is therefore to what extent a supplier has set and communicated climate targets and ambitions. To get answers, AI algorithms can extract and aggregate information from public announcements, reports, and social media activity regarding a company’s specific emissions reduction goals. This knowledge enables you to benchmark your company’s own targets against industry peers and business partners in order to identify areas for improvement.
3. Has the company a climate transition plan in place?
To achieve your own climate targets, you need a transition plan that outlines how your company navigates the complex process of decarbonization. And so do your suppliers need such a roadmap to implement reduction measures. AI can help determine whether a supplier has a transition plan in place by analyzing public disclosures and sustainability reports. This allows you to gaining insights into the decarbonization strategies, initiatives, investments and businesses activities of your business partners as well as competitors. Doing so, you can identify potential synergies or areas for collaboration.
4. Is the company engaging their suppliers for climate action?
As seen above, your suppliers play a pivotal role in your Scope 3 strategy and significantly impact your decarbonization journey. Therefore it is crucial to know if a supplier is actively engaging and monitoring its own supply chain with regards to emission reduction. Public supplier reports, sustainability initiatives, and collaboration programs convey the extent of a company’s engagement with its suppliers. This information allows you to assess the effectiveness of your own existing supplier management and identify opportunities to collaborate on decarbonization measures with peers.
5. Has the company communicated concrete decarbonization measures?
Last but not least, communicating concrete decarbonization measures is essential to demonstrate commitment, become accountable and inspire others to follow suit. Leveraging AI’s capabilities, you can assess whether your own organization as well as suppliers have effectively communicated its decarbonization initiatives – and which one in particular. This analysis allows you to gain insights into industry-wide actions, identify leading best practices and improve your own impact.
Conclusion
AI offers a powerful tool for companies seeking to enhance their decarbonization in Scope 3 by leveraging climate-relevant information on a large scale. Employing AI algorithms empowers decision makers to answer critical questions related to emissions data, climate targets, transition plans, supplier engagement and decarbonization measures. This way, businesses gain valuable insights into their own operations and those of their stakeholders. Equipped with this knowledge, organizations can collaborate more effectively with suppliers, benchmark their progress against industry peers and strategically position themselves to drive meaningful change. Through the power of AI, companies can take significant steps towards Scope 3 decarbonization and contributing to a sustainable future.
Interview with Huawei Technologies on Climate Transformation
Interview partner: Xiang Ao is the Sustainable Development Officer at Huawei Technologies Deutschland GmbH. The multinational technology corporation has set climate targets within its own organization and along the supply chain to address the global threat of climate change.
Source: Lancaster University (2020); EDGAR, FAO, UNFCC, BCG analysis
Climate Significance of the Telco Industry
Today, the telco industry accounts for about 3% of global CO2 emissions, which is about twice that of civil aviation.
With global data traffic expected to increase around 60% each year, the ICT industry could be responsible for up to 14% of global carbon emissions by 2040.
This means that the telco industry is a huge lever for decarbonization and an opportunity for real change within the economy.
So how does a major global telco company still on the path of climate transformation, like Huawei, go about reaching its climate goals? This is what we will find out in this interview:
We are pleased to have partnered with Huawei Technologies Deutschland on the Climate Performance Assessment. Can you briefly introduce yourself?
Huawei Technologies is one of the world’s leading providers of information technology and telecommunications solutions. More than a third of the world’s population and more than half of the German population use Huawei technology directly or indirectly. With the headquarter in Shenzhen, the company has 207,000 employees worldwide and operates in 170 countries through its three business units Carrier Network, Enterprise Business and Consumer Business.
Huawei has been operating in Germany since 2001 and employs more than 1,700 people in 17 locations. Huawei’s largest European research center is located in Munich. As one of the world’s leading providers of digital information and communication technologies, we are a long-standing and reliable partner of German mobile operators and many fixed network providers. In its role as an infrastructure provider, Huawei has played an important role in the digitalization of Germany for many years. We are a service provider for our customers, and thus not only the starting point for every form of digitization, but also the catalyst for social developments.
Sustainable development is an important part of Huawei’s overall strategy. To address the global challenge of climate change, we believe that technology is a key enabler of sustainable development, to create a more inclusive and environmentally friendly world. Huawei hopes to work with global customers, suppliers, and partners to promote green and sustainable development in various industries and build a low-carbon society.
How are you positioning yourself in terms of climate transformation? What climate targets have you defined for yourselves?
Green and low-carbon development is rapidly becoming a global priority. Huawei believes that digital technology will be a key enabler of nature conservation, green development, and response to environmental challenges like climate change. Digitalization and decarbonization build upon each other and can together promote green development. For years, we have followed our pledge of “Tech for a Better Planet” to proactively address climate and environmental challenges. We use innovative ICT solutions to protect our shared home by focusing on three areas: advancing energy conservation and emissions reduction, promoting renewable energy, and contributing to a circular economy.
More specifically, we are striving to achieve the following goals by 2025:
Reduce the carbon emissions (Scope 1 and Scope 2 GHG emissions) per unit of sales revenue by 16% by 2025 compared with 2019
Increase the average energy efficiency of our main products by 2.7 times by 2025 compared with 2019
Ensure all of Huawei’s top 100 suppliers (by procurement spending) will have set carbon emissions reduction targets by 2025
How did the Climate Performance Assessment help you? What are the most important lessons you have learned?
We are very impressed with the well-organized structure and detailed questions of the Climate Performance Assessment, which will help us not only to internally assess our maturity in climate performance management, but also to benchmark where we stand in the industry. From this perspective, our current status is quite positive. To have such professional and easy-to-use scoring system is a big Win for the companies who wants to recognize its management status.
The structure of the assessment plays a very important role: the current 5 dimensions methodology, which ranges from climate strategy, governance & leadership, stakeholder management, carbon footprint to decarbonization measures, is quite efficient during this program.
What are the next steps you want to address as part of your climate transformation?
Huawei will continue to contribute to climate protection by integrating more emission reduction technologies and measures, and cooperating with other stakeholders to build supply chain responsibility. Huawei is currently in the process of managing its sustainability development together with climate protection to reach a higher level.
How do you deal with your supply chain and the emissions generated here?
Huawei manages sustainability in line with industry best practices and globally recognized standards. Sustainability plays a vital role in our procurement strategy and is a key part of our supplier management process, from supplier qualification and selection to performance appraisals and portfolio management. We regularly appraise suppliers’ sustainability performance and facilitate their continuous improvement by working closely with customers, suppliers, industry organizations, and other stakeholders.
Huawei has established its procurement CSR management system based on the OECD’s Due Diligence Guidance for Responsible Business Conduct and the IPC-1401 Corporate Social Responsibility Management System Standard, and incorporated CSR requirements into our procurement strategy and business processes. Our Supplier CSR Agreement is prepared according to the Responsible Business Alliance (RBA) Code of Conduct and the Joint Audit Cooperation (JAC) Supply Chain Sustainability Guidelines.
What tips and best practices would you like to share with other companies?
Environmental protection and decarbonization require the participation and contribution of all of us. Huawei has already made efforts in various fields and areas by promoting product improvement and technologies development, such as the industry’s first MetaAAU to support 384 antenna elements to reduce energy use by 30%, and industry’s first smart optical modem to reduce power consumption by 30% etc.. It would be great to see our suppliers, customers and business partners move forward, and we are happy to share more details and experiences with all interested parties.
Thank you for the honest and insightful interview, Xiang Ao. We are very pleased about the cooperation with Huawei Technologies Deutschland GmbH and look forward to driving forward the climate transformation of the economy together.
IT Sustainability is a fundamental part of the Allianz business model
Rainer Karcher, Global Head IT Sustainability at Allianz Technology
As Global Head of IT Sustainability at Allianz Technology, Rainer Karcher’s role is to drive the decarbonization of the IT operations of the Allianz Group, one of the leading integrated financial services providers worldwide. He is further responsible for the integration of Sustainability according to the United Nations Sustainable Development Goals (SDGs) into all parts of Allianz.
Rainer will speak at a fireside chat at the CLIMATE TRANSFORMATION Summit 2023. Today we are happy to meet with him to discuss together the urgency of climate action, and the role of digitalization in the successful implementation of climate targets. Don’t forget to book your Summit ticket to meet Rainer at #CTS2023 in May!
What does IT Sustainability mean for Allianz Technology and for Allianz overall? What role does digitalization play in the successful implementation of climate targets?
IT Sustainability is crucial for the business model of Allianz. We are a digital company – our products and services are mainly digital; we do not have factories or production sites. Therefore, the digital part represents about 30% of Allianz’s greenhouse gas emissions. With the increase of digitalization, this percentage can easily go upwards.
When speaking about the role of digitalization in achieving climate targets, there are two aspects: it can be part of the problem, if we don’t act responsibly, but there is also a huge opportunity that it is part of the solution. The more we get digitalized, the more we can get automated, creating an efficient digital world and reducing energy consumption.
You speak about decreasing the organization’s footprint, while increasing its handprint and ensuring a heartprint. What are the concrete steps taken to support this approach?
Allianz is a large corporation, with operations in more than 70 countries. So, the chances that there are redundant applications, software or services are quite high. All our entities act independently, and this is why our main goal is become more efficient together. Transparency is where we need to start: We must know exactly which energy is being consumed, where and why, and also understand what we can to do to make things better.
We can gain this transparency once we have a fully automated treatment of data, and with the help of AI solutions we will understand how we can create more synergies and become more energy efficient.
Another principle we apply is ‘following the sun’. We are trying to place the IT systems in a way that there is always renewable electricity available. At the moment, a lot of IT processes are handled at night, and the problem with that is that, if there is no wind blowing or sun shining, you don’t have renewable electricity. So, we are reconsidering all this in order to always allow possibility to have climate neutral solutions.
What are your goals with this strategy and when will you call it a success?
We do have two main targets: to achieve net-zero operations by 2030 and to reduce energy consumption from IT and communications by 2025 by 20% compared to the pre-COVID values, in 2019.
As long as digitalization increases energy consumption, we can only achieve our targets by a good understanding of how to handle data more efficiently and responsibly.
How do you deal with your supply chain and the emissions generated here?
In procurement, we are facing the challenge of having around 90% of the emissions coming from external third-party partners. This challenge can only be tackled in a close collaboration with our partners. And this is why I think that for Allianz Group the SDG number 17 – Partnership for the goals – is key.
This means we are trying to work together instead of working against each other: there shouldn’t be an approach where we say, “we are the customer, you are the service provider”, but instead we need to find our joint path in a collaborative way. And I have to say, so far this approach works pretty well.
Additionally, we have considered a measurable comparison of the environmental impact for our partners. For example, when it comes to tenders, we now have KPIs in place for measuring the environmental impact of the potential partners by asking them to answer to a certain set of questions, including social and human rights aspects, and evaluating them on a scale from 0 to 10. This indicator is now being considered the same way we used to look at the prices, offering us the chance to choose partners with a similar set of values.
I think the biggest misunderstanding in sustainability is that there is an expert out there that will come and save us all. The truth is what we need is multiple expertise as well as collaboration. So, gathering all existing expertise around one virtual table makes the event so interesting for me. I’m very much looking forward to some new inspiring information and, of course, to also share my own experience and have an open exchange.
Discover The Power of Female Climate Leaders at #CTS2023
Shaping The Future of Climate Transformation at #CTS2023
On International Women’s Day, there is no better time to celebrate the incredible female climate leaders who are fighting for decarbonizing companies and their supply chains!
The CLIMATE TRANSFORMATION Summit 2023 brings together outstanding female climate experts for an online event you don’t want to miss. The theme this year is “Making it Happen,” and it will take place online on May 11th and 12th, 2023.
With 49% of confirmed speakers being female, this Summit is all about amplifying the voices of women driving climate transformation. And we are looking to bring the number up!
Why focus on female climate leaders?
Studies have shown that women in leadership positions are more committed and effective in driving action on climate change than men (sources: UN Women & Global Gender and Climate Alliance). Female leaders assess risks differently compared to men and generally prioritize the well-being of society when making decisions.
And the impact of advancing women in climate action is huge. According to Project Drawdown, it has the potential to save 68.9 gigatons of CO2e between 2020 and 2050. That’s why the CLIMATE TRANSFORMATION Summit 2023 is giving female climate leaders a special platform to share their insights.
Bringing transformation forward
These experts include Paula Caballero, the “inventor of the SDGs”, Anna Rathmann, Executive Director at the Jane Goodall Institute, and Sonya Bhonsle, Global Head of Value Chains at the Carbon Disclosure Project, among many others.
In partnership with Futurewoman.de, a network for women in sustainability, the summit also brings together Yvonne Zwick, Executive Director of B.A.U.M. e. V., Katharina Reuter, Managing Director of the Bundesverband Nachhaltige Wirtschaft (BNW e. V.), Olivia Henke, Executive Director of the Foundation Alliance for Development and Climate, Yvonne Jamal, Chairwoman of the Board of Jaro Institut e. V., and Lara Obst, co-founder of the climate tech startup The Climate Choice.
Sandra Broschat
Sandra Broschat, co-founder of Futurewoman.de, says it best:
“The female perspective and expertise are essential in the fight against the climate crisis. It is the biggest challenge of our time, we simply cannot afford not to actively use 50% of the know-how. Female leaders have a key role, as studies show they are particularly committed and consistent in implementing climate action compared to men.”
Claiming the mic to save the planet
The CLIMATE TRANSFORMATION Summit 2023 (#CTS2023) provides a stage for climate experts from diverse fields and perspectives. By doing so, the Summit not only promotes cross-sectoral knowledge transfer but also recognizes the vital role that women play in the fight against climate change.
Olivia Henke
Olivia Henke, Executive Director of the Foundation Alliance for Development and Climate, expresses the importance of coming together to tackle the climate crisis:
“We need every opportunity to come together, exchange ideas and learn from each other. The Climate Transformation Summit offers a great platform to achieve this goal. We are excited to be partners again.”
Katharina Reuter, Managing Director of BNW e. V., agrees, stating that:
Katharina Reuter
“the Summit shines a spotlight on climate protection solutions – a perfect match with the BNW e. V..”
So mark your calendars for May 11th and 12th and get ready to be inspired by incredible female climate leaders. Let’s make a real difference in Making Transformation Happen in companies and their supply chains!
Don’t forget to get the lasts Early Bird Tickets here! The discounts ends this week.
How to generate Value from Supplier Climate Data
New reporting requirements and stakeholder expectations are driving large companies to collect climate-related information from their suppliers. Once they have overcome the first hurdle of collecting data along complex supply chains, they immediately face the next challenge. What do I do with all this supplier climate data now? How can I generate value for my company from it? How can it help me to achieve my sustainability targets?
This is what we learned at the CHOICE Event #52 from Neele Franke and Hugo Ernest-Jones from IBM Consulting. Here you will find the most important insights from their presentation.
Companies struggle with operationalizing climate strategies
When it comes to sustainability and climate efforts by large companies, it is striking that today many of them are already publicly committing to climate targets and developing strategies for their implementation. While most have ambitious plans, however, many are still struggling to operationalize them. A recent survey among over 2,000 CEOs worldwide revealed that 86% of companies have a sustainability strategy, but only 35% have acted on that strategy (Source: IBM Institute for Business Value (2022): Sustainability as a transformation catalyst).
So while the “What” seems to be rather clear, the “How” of getting it actually done remains a big challenge. Added to this is the increasing pressure and complexity of regulations and frameworks for corporate sustainability and climate disclosure. Regulators are mandating minimum levels of reporting – putting the responsibility onto corporations. They, in turn, have to find their way through the jungle of new standards and initiatives defining the most important climate data in companies. Since up to 90% of a company’s emissions originates from the supply chain, they must also manage to collect this data from their suppliers.
The evolution of a sustainable enterprise
For companies that start collecting supplier climate data, it is important to understand that next to compliance and reporting purposes, they can also generate huge amounts of value from their data collection. If done right, it can help the company to operate more effectively, more profitably, with reduced costs and in a more innovative way to develop new products and services.
Based on this insight, companies can be classified in a maturity curve for their sustainable evolution in three stages.
Stage 1 – Sustainability Compliance
Focus mainly on license to operate and meeting regulatory or compliance requirements. Digital maturity is low, processes and systems are siloed, and data collection and aggregation is a manual process.
Stage 2 – Sustainability Optimization
Sustainability initiatives exist for Social, Environmental & Governance, across operations and support functions. Acceleration of digitization and automation of sustainability data collection and reporting.
Stage 3 – Sustainability Transformation
Sustainability is embedded as a core value and mission statement across all company departments and functions. Technology is focused on differentiation, advanced analytics and futuristic, with the objective of leveraging sustainability as a competitive advantage.
Key steps in operationalizing supplier climate data
How can companies leverage their supplier climate data to move from mere sustainability compliance to real sustainable transformation? The following key steps can serve as a guide to successfully operationalize the data collected in order to drive action.
1. Data Collection
There are two different options when collecting climate data from suppliers. Real supplier “primary” product level data is the preferred where available, though availability is limited. “Secondary” averages data on the other hand are readily available, but of limited quality. Clients should therefore collect and integrate primary data for selected high impact/strategic suppliers (at least scopes 1 and 2) where possible and use secondary data sources to model remaining emissions.
2. + 3. Data Integration and Engine
While many companies still collect and integrate their data manually in Excel spreadsheets, the goal should be to automate this process as much as possible. Specialized software solutions are already available for this purpose, such as the Climate Intelligence Platform. This has the advantage that time-consuming processes can be carried out efficiently and cost-effectively, and the data is also auditable.
4. Visualization and reporting
Once companies have collected and integrated the supplier climate data, they should visualize the results next in order to draw out insights to inform reporting and strategy. Smart visualization with specialized tools also supports the management of data availability and quality.
5. Simulation and strategy
In order to use the data not only for insight into the past, but also for future planning, the next step is strategy work. Companies can now leverage the supplier climate data to help guide decision making around reducing emissions along the supply chain. This is where modeling and simulation comes in and links with the next and last step: supplier engagement.
6. Supplier Engagement
Collaborating with and engaging suppliers is the core and end goal of every effort to decarbonize the supply chain. It is important to note that successful supplier engagement must occur at three levels.
Process & Governance – Companies should design a strategy and operational model aligned to supplier benefits and user outcomes that are fair, democratic, transparent and evolving.
Business Value – In order to secure participation, companies must design a business model that includes appropriate incentives to stimulate collaboration and network effects.
Technology – Technical solutions with winning human experiences help to drive mass adoption of new digital products and services with privacy, trust and security.
Start with a free basic account for the Climate Intelligence Platform
The best approach to finding the entry point to collecting and leveraging supplier climate data is to “start small and think big”. The Climate Intelligence Platform offers a perfect small start for companies looking to engage their suppliers for climate action. The free basic account offers access to over 10,000 climate supplier profiles and the possibility to analyze the basic climate maturity of an unlimited number of suppliers in an automated way.
“Together we can. Together we will” – Interview with Anna Rathmann from the Jane Goodall Institute
Anna Rathmann, Executive Director of the Jane Goodall Institute
Everything is connected – everyone can make a difference. Under this motto, the Jane Goodall Institute fights worldwide to conserve the natural world we all share. We are excited that Anna Rathmann, Executive Director of the Jane Goodall Institute, will be a keynote speaker at the CLIMATE TRANSFORMATION Summit 2023, sharing her vision and insights with the CLIMATE community.
For the Climate Magazine, she has already taken the time to answer our most pressing questions to her. The interview is about the three big global crises – climate change, biodiversity loss, and environmental inequity –, how they intertwine and how the institute is partnering with companies to tackle them.
Hello Anna, thank you for taking the time for our interview. Let’s start by briefly introducing yourself to our readers and explaining to them what the Jane Goodall Institute stands for at its core.
First off, thank you for the opportunity to share a little bit about the Jane Goodall Institute’s nearly 50 years of conservation. My name is Anna Rathmann, I am the executive director of the Jane Goodall Institute (JGI) USA in Washington, D.C. I have spent my career working in conservation and, like many others, have a profound respect for the holistic philosophies and approach of Dr. Jane Goodall. The Jane Goodall Institute’s mission evolved as Jane evolved as a scientist and activist.
The foundation of JGI was built on the groundbreaking research Jane began over 60 years ago in Gombe National Park in western Tanzania on chimpanzees and their ecosystem. While this ongoing research continues to be at the core of our work today, we combine this decades long commitment to science with community-led conservation, innovative advocacy around animal welfare and environmental issues, best-in-class rehabilitation and sanctuary care for a variety of wildlife exposed to trafficking, One Health initiatives, forest protection and restoration, applied conservation technology, and our global youth program: Roots & Shoots.
Jane often refers to our planet as a “tapestry of life”. This philosophy, of “when nature thrives, we all thrive,” has guided the work of her namesake Institute to view complex issues like biodiversity and habitat loss, human inequity, and apathy – as interconnected. In response, JGI’s solutions are interconnected. We see threats as opportunities to bring people together across industry, sector, and identity to pursue science-based solutions that integrate the needs of people, other animals, and the environment in their communities. Together we are adding to the “tapestry of life” and building a “tapestry of hope” towards positive change worldwide.
In your recently announced new strategy, you are stressing the fact that our society is now facing 3 global crises: climate change, biodiversity loss, and environmental inequity. How do these crises affect and magnify each other, and what is your approach to help address them all?
Climate change, biodiversity loss, and environmental inequity are deeply intertwined. Human inequities have largely driven the over consumption of natural resources and environmental degradation. Global consumer industries both perpetuate inequities and overwhelmingly drive this damage. In turn these processes are the main drivers of greenhouse gas emissions, habitat loss, pollution, and harmful transformations that are causing the Sixth Great Extinction. We are each part of the grand tapestry of life and as species go extinct, the whole tapestry begins to fall apart.
We also know that as ecosystems lose their ability to absorb greenhouse gases, like global forests and oceans, all these factors of damage and threat increase. This cycle then deepens human inequities, disproportionately affecting low-income communities worldwide, leading to a cycle of habitat loss, destruction, and suffering.
Jane Goodall began her research over 60 years ago in Gombe National Park in western Tanzania
This is why Jane and JGI have never seen threats as standalone problems. Every threat is integrated and requires integrated solutions – and everyone plays a role in these solutions. That is why people are at the center of the Jane Goodall Institute’s approach to conservation. We want to create involvement at every level for true community ownership of conservation and environmentalism. Local and indigenous people are the stewards of the majority of the world’s biodiversity, so JGI wants to ensure local communities and indigenous groups are leading their own natural resource management and sustainable development – an approach the Jane Goodall Institute calls “Tacare” (to “take care”). We also firmly believe in the power of young people. Our Roots & Shoots program empowers young people to identify problems facing people, other animals, and their environment – so that they see these interconnections and find ways to help locally.
Jane and JGI are part of global campaigns and advocacy to influence environmental policies at all levels of government and stewardship. Our #EATMEATLESS campaign is part of our efforts to shine light on the damaging effects of the animal agricultural industry. Our “Jane’s Green Hope” campaign focuses on nature-based solutions through partnering with companies such as Hewlett Packard for native forest restoration and protection.
Top down and bottom up, JGI believes everyone has a role in creating change and the responsibility to create a better world for us all. These threats facing our planet are complex, but when each of us takes part in transforming our systems, we change the way we view our relationship to one another and to the natural world.
You have defined 4 key groups with whom you want to work together to fight the 3 crises: young people, indigenous communities, the general public, and businesses. What responsibility but also what opportunities do you think businesses have in particular in the fight against climate change?
We know that a small group of around 100 companies are responsible for the majority of emissions, but we also know those companies consist of people. Jane often uses the analogy of speaking to someone’s “heart and their head” by sharing a story about how a young woman in Roots & Shoots spoke to her father who was in the fossil fuel industry about climate change. When we have these intergenerational conversations – interpersonally or between entities like JGI and major companies – we can make important shifts towards the necessary sustainability this world needs before it is too late.
Jane and JGI work to have these conversations and keep the momentum going in the right direction. This means either directly scaling or deepening our work, increasing accessibility for end-users to participate in sustainable practices, and/or advancing efforts that will work with companies to identify ways to reduce negative impacts, carbon emissions, pollution, and more.
What special challenges have you experienced in your collaboration with businesses, and what best practices for sustainable and climate-related business decisions have been most effective?
In any relationship, there is the need to make sure we are listening and creating a vision for the project that benefits everyone, one based in science, and which perpetuates movement towards tangible and real sustainability. Having companies see how robust our programs are, and how simple solutions can create big impact, has been less of a challenge and more of an emerging opportunity.
When finding partners, the Jane Goodall Institute wants to make sure that they have already invested in carbon divestment goals and green transformations. We then find ways to move further to the goal together. Jane has always found common ground through conversations, and conversations are where true understanding happens – where is there already a chance for overlap or expanding programs that work? How can we use our brand to increase the accountability of a corporation to walk the talk? How can we also provide resources, insights, and expertise to ensure that every aspect of the partnership and deliverables are sustainable? These are the questions to ask.
Do you have a message for companies that you would like to share in short words with the participants of the upcoming CLIMATE TRANSFORMATION Summit 2023?
We know that there are so many innovative people in influential companies ready to turn the tide on the harms facing our planet through partnerships. Through the Jane Goodall Institute’s model, we have the programs, expertise, and investment in local and indigenous leadership, and we welcome thoughtful and meaningful partners to help take that work further. Everyone wants to be part of a winning team and when they see what is possible by working together, they are inspired to think more critically about the brands and organizations they support, and how they live their lives.
Jane has always followed a path of doing what was right for the sake of the common good with the knowledge that we are all dependent on one another, this planet, and its finite resources. But as Jane says, “How is it that the most intellectual species to ever exist is destroying our only home?” One of Jane’s most important reasons for hope is the human intellect – what has driven our incredible globalized industries is our human brains, and so these same brains can work together to solve even the greatest of complex challenges. When we combine our intellect with using our hearts to guide us in doing what is right, we change the world.
JGI does not endorse handling or close proximity to wildlife. This represents a sanctuary context with trained professionals.
THE CLIMATE CHOICE says thank you for a special 2022!
What a year for climate champions! We all faced major new challenges in 2022 – especially companies that were particularly hard hit by the energy crisis and supply chain bottlenecks. Despite everything, you, the CLIMATE community, have continued to work with us to drive the transformation to a low-carbon economy. There have been many positive highlights and developments for which we at THE CLIMATE CHOICE want to say thank you. Let’s take a look at how 2022 allowed us to boost climate transformation all around the globe!
Kicking off the year with strong, new partners
Our year began with a firework of climate action. We were able to start working with many new major and influential customers for the Climate Intelligence Platform, including, as two special highlights, the corporate projects with the mobile phone provider o2 Telefónica and the baby food manufacturer HiPP. We kicked off inspiring collaborations to elevate the transparency of emissions along their supply chains by using our platform.
HiPP was able to successfully identify climate-related risks and potentials of five suppliers with the help of our software tool. HiPP’s Head of Sustainability Management Dr. Johannes Knubben reflects: “The software tool from THE CLIMATE CHOICE enables us to implement a scalable and reliable process to increase the climate-relevant transparency of our supply chain.”
Our next goal is to extend the software-driven climate data collection initially to other partners and ultimately to HiPP’s supply chain. Through an integration of THE CLIMATE CHOICE software tool into HiPP’s sustainability and procurement strategy, the full potential of climate-relevant supplier management is to be exploited.
Our corporate project with o2 Telefónica also successfully identified climate-related risks and potentials of the selected suppliers. The company is now able to develop a transparent, scalable process for collecting comparable data on the climate maturity of suppliers.
In the next step, we will integrate our platform into the procurement dashboard of o2 Telefónica. The climate-relevant data collection for the decarbonization of Scope 3 will be extended to around 1,000 suppliers.
CLIMATE TRANSFORMATION Summit 2022
The climate action kept on flowing and reached a new peak at our #CTS2022. For the third year in a row, we brought together international climate leaders and procurement experts for our two-day 100% online Climate Transformation Summit.
More good news: We just announced the date for #CTS2023! We cannot wait to welcome you on May 11 & 12 2023 for two days full of climate action! Our focus this year: Making it happen – the decarbonization of supply chains! Together with you and leading experts, we will find out how we can impement CO₂ reduction along the value chain.
The most important insight we gained from the discussions at the #CTS2022 was that small and medium-sized enterprises (SMEs) in particular still find it very difficult to get a quick start in climate transformation because they often do not have sufficient know-how and/or resources. In response to this challenge, we worked over the summer on a new solution offering.
The result: In October, we launched our digital and freely available Climate Readiness Check in partnership with 10 leading sustainability organizations. Among those B.A.U.M. e.V., Bundesverband Nachhaltige Wirtschaft e.V. (BNW), Stiftung Allianz für Klima und Entwicklung, Jaro Institut für Nachhaltigkeit und Digitalisierung e.V., and the Deutscher Mittelstands-Bund (DMB).
The Climate Readiness Check offers SMEs an easy entry point into their climate transformation: through knowledge and insights into their own climate maturity, benchmarks, suggestions for improvement, and access to a B2B climate data platform.
Our Launch was a full success! We are beyond happy to see so many companies kicking off their climate transformation with our Climate Readiness Check! We can’t wait to see who will join us in 2023!
In addition to the projects we developed ourselves, this year we were also part of pioneering external initiatives. Among them, one highlight: In August, we were selected from more than 2.000 applicants for the Climate Lab and Kickstart Innovation scale-up program in the finance and insurance track! Kickstart is one of the largest European Innovation Platforms. Each year they chose a select number of the best international startups to participate in a 10-week program.
We were honored to work in the program with corporates – such as Swisscom, Credit Suisse, AXA, Sanitas, Post Finance, La Mobilière, Coop, CSS, SATW – from the DACH region, who strive to reduce climate risks and emissions in value chains.
Thanks for the EU ‘Best Digital Solution’ Award
The cherry on top of 2022 was winning the “Best Digital Solution” award from the European Commission. The award recognizes the development of our software platform for the collection of climate-relevant data from suppliers and attributes it great impact potential for the greening and digitalization of European industry.
On behalf of the European Commission’s DG GROW, Deputy Director General Hubert Gambs emphasized: “Digital solutions are not only useful to be competitive and provide better value to European customers. They are also key to making our economy greener and European businesses more resilient to future shocks.”
We are so grateful and can’t wait to enable more businesses in boosting their climate transformation!
Many, many thanks for driving our Mission together!
Our mission at THE CLIMATE CHOICE is transforming every company into a climate champion and enabling businesses to make procurement decisions that are aligned with the 1.5-degree-goal! We have summarized our mission for you in this short video.
We are very grateful to work with inspiring companies – and that media is increasingly sharing our mission. THE CLIMATE CHOICE says thank you Süddeutsche Zeitung, t3n, Berliner Morgenpost, Gründerszene and many more, for featuring our platform and allowing us to gain more visibility on our mission!
Our Wrap up, 2022!
Let’s wrap it up before we go back to wrapping presents. 2022 was a complicated year for the world. We learned that the energy transition is a major driver for the overall climate transformation. We literally saw that it is interlinked with peace and has a positive impact on people, planet and profit. At the THE CLIMATE CHOICE we are therefore honoured that we were able to work on one piece of the puzzle – bringing us towards a regenerative future. These are our 5 highlights:
Started working with major new customers, including HiPP and o2 Telefónica
Held our 3rd 100 % digital CLIMATE TRANSFORMATION Summit with 64 speakers and 1.000 participants from 59 countries
Launched our new Climate Readiness Check, accessible for companies of all sizes for free to kick off their climate transformation
Won the EU ‘Best Digital Solution’ award of the Get Digital Initiative from the European Commission and the European DIGITAL SME Alliance
Süddeutsche Zeitung, Gründerszene, t3n, Berliner Morgenpost, Beschaffung aktuell and many more shared our work
Our biggest ‘THANK YOU’ goes to you, Climate Champion! If you are reading this, you are dedicating your valuable time to make this climate transformation a positive one. Whether you are Sustainability Manager, Procurement Expert, or Tech Champion: You are on a mission to strive together with us for an economy that allows the world to stay below 1.5 degree. Let’s start the new year with the same energy and even more climate action. Cheers to 2023!
Your #TeamClimate
THE CLIMATE CHOICE
THE CLIMATE CHOICE Founders Rey Farhan, Lara Obst and Yasha Tarani
Milestones in Climate Reporting – New CSRD Proposal finalized
For months the European Parliament and the EU Council have been negotiating, and now they have been finalized: the CSRD. These new rules for sustainability disclosures will tens of thousands of companies have to publish in the future.
The new proposal released at the end of June 2022 addresses shortcomings in the existing rules on disclosure of non-financial information. The existing regulation has formerly been considered insufficient to be properly taken into account by investors. But there is hope on the horizon! The new CSRD takes climate reporting to a historic new level. Find out the most relevant insights on the new CSRD proposal:
1. Introduced more detailedreporting requirements
Transparency is key. The CSRD makes sustainability-related information about companies more readily available, of higher quality and more comparable. Large companies are obligated to report on social and environmental issues, human rights as well as governmental factors. The disclosures must now be externally audited and made in a separate section of the annual report.
2. Over 50,000 companies in Europe soon to be affected by CSRD
Affected are large companies with over 500 employees that are already subject to the Non Financial Reporting Directive (NFRD). They will first have to prepare the reports for the 2024 financial year and publish them in 2025. Additionally, all other large companies will be required to report one year later. Finally, capital market-oriented SMEs will be included from the 2026 financial year.
From which points in time does the CSRD apply to companies?
2024 for companies already subject to the non-financial reporting directive
2025 for large companies that are not presently subject to the non-financial reporting directive
2026 for listed SMEs, small and non-complex credit institutions and captive insurance undertakings
Furthermore, non-European companies, which are generating a net turnover of €150 million in the EU and are having at least one subsidiary or branch in the EU, are required to report on their ESG impacts.
3. CSRD aligned with global reporting standards
The new CSRD guidelines will require companies to report in line with mandatory EU sustainability reporting standards. For example: the suggestions of the TCFD as well as the EU Taxonomy and the existing NFRD.
The reporting will need to cover:
The Greenhouse Gas Protocol – disclosing their Scope 1, 2, and 3 emissions.
The 6 environment impact criteria – disclosing how they substantially contribute to the environmental goals of the EU Taxonomy while not damaging one of them:
Climate change mitigation
Climate change adaptation
Water and marine resources
Circular economy
Pollutions
Biodiversity & ecosystems
Existing ESG-Standards such as the GRI – disclosing their social and environmental impact as well as governance
Responsible Business Guidelines (OECD) – disclosing the entire impact along the value chain
CSRD – Economy’s game changer
The European milestone in setting international standards for sustainability reporting shows: In the future, every company worldwide will have to disclose its climate impact. This will help investors to reorient capital flows towards sustainable investment and manage financial risks stemming from climate change and improve transparency.
This is a great opportunity, guidance and motivation for effective climate action. It enables companies to position themselves as pioneers and to empower business partners along the way.
You want to learn more on how to prepare best for CSRD, in order to seize the opportunity now to drive forward climate transformation? Access the Whitepaper on CSRD here to get more insights.
You want to drive climate transformation in your organization today? Find out more about the free CLIMATE Readiness Check here and take the first steps towards a low carbon economy!
