Last week, this year’s Earth Day theme “Invest in Our Planet” called on everyone, including government, citizens and businesses, to contribute to the fight against climate change.
“If companies do not act now, climate change will increasingly damage economies, increase scarcity, drain profits and job prospects, and impact us all,” Earth Day Network wrote on their website.
Only 100 companies have been the source of more than 70% of emissions since 1988, according to a study by the international non-profit organization CDP in 2017. In this perspective, pushing the private sector to contribute to the reduction of emissions seems a necessary step to reduce global emissions.
Most companies have some form of climate strategy in place. However, without clear guidelines and accountability, there is a risk of unclear goals, empty promises, and greenwashing.
In examining the climate strategies of 25 large global companies, the nonprofit NewClimate Institute found that commitments made in these public strategies are often ambiguous and emissions reduction commitments are limited.
“All 25 companies evaluated in this report are committed to some form of zero-emission, net-zero or zero-emission target,” the researcher wrote. “But only 3 of the 25 companies (…) are clearly committed to a profound decarbonisation of more than 90% of the emissions of the entire value chain within their respective zero and zero net emissions target years.”
With the lack of regulation, there is a growing need for companies to set clear and credible goals. This is where independent certification schemes like the Science Based Targets (SBTi) initiative come into play.
SBTi is a collaboration between CDP, the United Nations Global Compact, the World Resources Institute and the World Wide Fund for Nature. Over 1,300 companies have signed up with scientific objectives in line with the objectives of the Paris Agreement and approved by the SBTi.
Pharmaceutical technology analyzed the emission reduction targets of the companies present in the SBTi database. Because it can be difficult to compare goals across different companies and industries, the analysis only includes companies with absolute goals. Absolute targets are only relative to a baseline, while intensity targets – those excluded – are relative to an economic unit or output, such as a reduction in emissions per million dollars of profit.
The data shows that fewer companies are committed to Scope 3 than Scope 1 and 2, and that the goals set for Scope 3 are less ambitious.
The scopes are emission categories established by the Greenhouse Gas (GHG) Protocol, a framework for reporting greenhouse gas emissions from the public and private sectors. Scope 1 covers direct emissions from owned or controlled sources, Scope 2 covers indirect emissions, e.g. from electricity generation, and Scope 3 covers all other direct emissions from the value chain.
Setting scope 3 goals as a company is just as important, if not more so, than setting scope 1 and 2 goals, explains SBTi: “For most industries, a company’s major sources of emissions are upstream and downstream. / or downstream of their main activity “.
Taking the average of the goals reported by companies in each sector indicates how ambitious each sector is compared to others. The calculation of the average target by sector was carried out by averaging the percentage of the reduction target and calculating the average of the time interval between the base year and the target year.
Based on an average of 32 companies, the pharmaceutical and biotech sector is committed to reducing emissions by 45.8% in 12 years. This is more ambitious than the average of all companies. In all the companies in the database, the average objective is a reduction of 44.6% over a period of 12 years.
Among the companies in the pharmaceutical and biotech sector, Novo Nordisk A / S has the largest commitment, with a 100% reduction in emissions by 2030. The second was Lundbeck A / S with a commitment to reduce emissions by 63% by 2034.
On the other hand, SERVIER and Astellas Pharma Inc. are lagging behind other companies, with reduction targets of 25% and 30% respectively by 2030.
The SBTi ranked each goal set by companies based on future pathways. The trajectory may be towards 1.5 ° C, well below 2 ° C, or 2 ° C above pre-industrial levels by 2050.
To avoid the most significant consequences of climate change, global temperature rise must remain below 1.5 ° C above pre-industrial levels by 2050. However, the latest report from the Intergovernmental Panel on Climate Change (IPCC ) shows that the current trajectory will result in global warming between 2.2 and 3.5 ° C. In response to the urgent need to further reduce emissions, the SBTi “will only accept the submission of Scope 1 and 2 targets that are in line with a 1.5 ° C trajectory” starting July 15, 2022.
With a total of 25 companies, most companies with absolute and intensity targets in the pharmaceutical and biotech sector are in line with a trajectory towards 1.5 ° C above pre-industrial levels by 2050, while 8 companies would not be able to present their objectives according to future SBTi standards.
By Isabeau van Halm, Saywah Mahmood, Mirela Petkova and Mengying Du