60% of companies assessed by EcoVadis are committed to reducing their greenhouse gas emissions
EcoVadis, a specialist in assessing and improving corporate CSR performance, has published its first global "Carbon Maturity Report" exploring the state of climate action. The report describes the impact model for decarbonizing supply chains.
To achieve the ambition of the Paris Agreement signatories and limit global warming to 1.5 degrees, it seems urgent that companies make ambitious reduction commitments. While the AcoVadis report shows progress among rated companies since the launch of the Carbon Action Module (CAM) in spring 2021, there is still a long way to go.
"Given the urgency of the climate crisis, procurement executives recognize that they must act now. With the right tools and data, they can accelerate their suppliers' engagement, strengthen their knowledge and improve their performance," insists Julia Salant, Director of Carbon Solutions at EcoVadis.
In 2022 EcoVadis will assess 15,000 companies according to five levels: poor, beginner, intermediate, advanced and leader. Of the companies assessed, 60% are committed to reducing their greenhouse gas (GHG) emissions and more than half of those reassessed by EcoVadis have already improved their carbon management system.
44% of companies are in the early stages of deploying a carbon management system
Approximately 3% have a "leading" or "advanced" carbon management system. These are mostly large companies. However, 44% of companies are still in the early stages of developing a carbon management system and currently fall into the "insufficient" level. Only 8.8% of the companies assessed with a carbon footprint have at least one GHG emissions target. EcoVadis also notes with regret that only 14% of companies publish their environmental impact information. This rate is all the more unfortunate since, according to the 2021 report of this initiative, companies with targets based on scientific data have reduced their emissions by 29% in six years (2015-2020).
Reducing your GHGs
What are companies doing to decarbonize? Three concrete actions are being taken to reduce their carbon footprint: using renewable energy, upgrading and/or using technology to improve energy efficiency, and training employees in energy conservation and climate action.
26.5% of companies with an EcoVadis carbon rating use renewable energy
The most common initiative to reduce emissions from operational activities is to turn to renewable energy. For example, 26.5% of companies with an EcoVadis carbon rating use renewable energy. Globally, China is the fastest growing producer of renewable energy, ahead of the United States, the European Union and India. However, when it comes to the share of renewable energy in the energy mix, some countries are models in this area. Costa Rica's energy needs are 98.5 percent met by renewable resources, Norway's 98 percent, Brazil's 84 percent and New Zealand's 80 percent. Globally, the share of renewable electricity in total energy consumption is expected to increase from 20% to 50% by 2050.
Globally, the share of renewable electricity in total energy consumption is expected to increase from 20% to 50% by 2050
Employee training on climate and energy conservation initiatives is another common initiative, implemented by more than 21.5% of the companies surveyed. Other actions are also beginning to gain traction, including communication about energy consumption and the use of waste heat recovery systems. Such initiatives could, according to the International Energy Agency, reduce GHGs by the 40% needed to meet the Paris Agreement targets.
19.5% of companies rely on technology to improve their energy efficiency
However, there is still a lot of room for improvement when it comes to the use of carbon offsets and carbon capture and storage (CCS) technology. Only 19.5% of companies are currently using technology to improve their energy efficiency. Carbon offsets are a way to move toward net zero emissions by allowing companies to focus on their truly unavoidable emissions.