The Carbon Trust’s Accelerate to Net Zero: EU virtual event struck a positive and pragmatic tone as speakers from across the continent discussed their experience of transitioning towards Net Zero, including the successes and challenges along the way.
The green digital transition
In his keynote speech, Ilias Iakovidis, Adviser on the digital aspect of green transition for the European Commission, spoke of the crucial role that digitalisation could play in reaching Net Zero as part of a ‘Green Digital Transition’.
“Are you as companies and organisations using the full potential of digitalisation and digital tools? Because digitalisation is the tool that we are trying to get the maximal benefit from in the European Commission,” he said. “It’s still underused.”
For a long time, the digital agenda and green agenda were treated as “separate, non-communicative agendas”, added Iakovidis. “But that’s changed with this new Commission. We’re trying to twin them.”
Iakovidis argued digitisation should promote a shift from a quantity model–where businesses sell as much as possible of a product–to a service model–where they supply only what is needed to fulfil a service–to be more efficient and cut emissions.
Citing the example of ‘precision farming’ – a strand of tech-led agriculture that can involve a huge variety of technology, from soil and plant sensors to drones and IoT devices – he said that instead of “pushing gadgets on farmers”, who often lack the resource or know-how to deploy them, companies should offer to manage the land themselves for a fixed rate, using only the resources that are required.
However, Iakovidis admitted that the technology sector still needs to reduce its carbon footprint by upgrading data centres, minimising waste production and more. “We know not all digitalisation is green yet,” he said.
In order to accelerate that work, the European Commission has launched the European Green Digital Coalition, to which 36 CEOs have committed. The Carbon Trust “is the heart and soul, helping us analyse case by case how we actually perform using digital solutions in reality,” Iakovidis added.
In his concluding remarks, Iakovidis underlined the huge impact digitisation could have on reducing company emissions. “Just doing the simplest things with digital, you can improve 10-20% energy efficiency of a building, without any new materials, just smartness,” he said.
Data collection and implementation
In a panel discussion, Simon Hoffmeyer Boas, Sustainability Director at brewing company Carlsberg and Geraldine Tsui Yee Lin Bagger, Climate Director of the pump manufacturer Grundfos, explained their steps to reach Net Zero, including setting targets, addressing value chain emissions, and engaging with suppliers.
Boas said that Carlsberg, which set its Net Zero target in 2014, began by gathering data in order to tackle low-hanging fruits, and he underlined the importance of collecting primary data.
That involved Carlsberg creating a rudimentary efficiency plan in 2017, identifying ‘hotspots’ in the value chain where the biggest emissions were. The company then discovered that packaging makes up more than 40% of carbon footprint.
“Knowing that, having the information was absolutely key for us to make decisions,” he said. “My advice: start with data, information, and get the facts in place.”
Bagger agreed that data was fundamental for Grundfos, despite having a hugely different business situation to that of Carlsberg – 99% of its emissions come from the use of its pumps. But, she added, data gathering is not enough.
“For the big decisions, and to really develop the decarbonisation strategy, you need to spend a lot more time than you think on data,” said Bagger.
For Grundfos, that led to taking the significant move of making Scope 1, 2 and 3 emissions part of itsGroup level KPI [Key Performance Indicator]. Now, emissions data “is as integrated as financial data”.
“As a group we have decided that we are going to continue to grow our business, but decoupling our emission growth from that point,” added Bagger. “This is one of the strongest statements we can make as an organisation to make sure all of our colleagues are on board and to communicate to our external stakeholders that we mean this as a business, not just as a Corporate Social Responsibility move or greenwashing.”
Going forward, Carlsberg has used the data to identify agriculture and packaging as areas to target improvement. It now aims for 30% of agricultural products to come from regenerative practices by 2030 and 100% of purchasing by 2040.
The two concurred on the importance of embracing uncertainty. “A year ago, we wouldn’t have known the energy crisis would unfold,” said Bagger. “We shouldn’t worry if we don’t have a plan right up to 2050. It doesn’t leave room for risk or innovation.”
Host Ralph Cochrane closed proceedings with the quip: “That was probably the best discussion about journeys to Net Zero.”
In the second panel discussion, Cordula Mock-Knoblauch, Head of Sustainability Accelerator Aroma Ingredients at German chemical company BASF, Mie Prehn Nygaard, Senior Sustainability Advisor and Programme Lead for supply chain decarbonisation at Danish power company Ørsted and Jay Hennessy, future sustainability expert and Director for Mission Innovation's Net-Zero Compatibility Initiative, RISE, explained how they were already bringing crucial change.
Since 1990, BASF has cut its Scope 1 and 2 emissions from 40 million tonnes to 20 million tonnes, while roughly doubling its output. It is now aiming to reduce absolute emissions by 25% by 2030, through increasing use of renewables and also improving chemical production processes.
Similarly, while Ørsted once accounted for a third of Denmark’s entire national carbon emissions,it has shifted towards renewables and is on track to have cut the carbon footprint from its own energy generation by 87% by 2025. “We have exceeded our own expectations in this journey,” said Nygaard. Ørsted’s science-based target was approved last year to reach a Net Zero footprint by 2040 across all scopes.
Introducing the solution-oriented approach, Hennessy said great advances are made when organisations “shift the thinking beyond a climate risk or reduction approach that only focuses on what’s bad” and instead embrace an approach that focuses on a companies’ potential to “provide and export solutions that can contribute to global sustainability and address human needs”.
In a world that will soon be home to 11 billion people, experts and innovators who are tackling global climate challenges can find “a new sense of hope and excitement” by working towards providing solutions that can have a direct, tangible, and positive impact on people’s lives, he added. Addressing climate change also makes sense from a commercial perspective, as it can give organisations a competitive edge.
Mock-Knoblauch revealed that BASF is taking a cradle-to-gate approach, referring to the carbon impact of a product from the moment it is produced to the moment it enters the store. It has used SAP data to calculate emissions for its 45,000 products.
“For us that was a huge step,” she said. “You can compare them with competition. You can calculate the competition’s emissions yourself. You can identify the major differences, energy sources, production methods.”
Ørsted’s Nygaard said the shift toward renewables makes business sense, noting “A viable business model is a sustainable one.” The senior management have included it as part of core strategy and even executive bonuses are linked to sustainability.
Nygaard added that collaboration with other companies is key – and now 40% of their suppliers have science-based targets. “Change will only come if the whole value chain agrees to pass on the additional costs,” she said. “To really partner and communicate with each other.”
In his closing remarks, Hugh Jones, Managing Director at the Carbon Trust praised the hugely encouraging event. “The leading takeaway was that the route to Net Zero is partly about the here and now, but partly, and largely about the future,” he added.