Is your company ready to provide data on CO2 emissions?
If you are a subcontractor to a larger company, you will be required to provide data on your CO2 emissions in the future. If you do not have the necessary insight, your competitiveness may suffer. Here is a roadmap to make your company climate-ready.
Climate and sustainability are today a business premise
Reporting in this area has moved at a rapid pace this year, and the number of companies that, for example, join initiatives such as the Science-Based Targets initiative (SBTi) is currently more than doubling every year.
With SBTi, companies commit to reducing CO2 emissions throughout their value chain – reductions that, in round numbers, are around 50% in Scope 1 and 2, and 30% in Scope 3.Scope 1, 2 AND 3.
A large number of large Danish companies such as Mærsk, Novo Nordisk, Grundfos, Arla and Lego have already joined SBTi – and the list is growing steadily.
Scope 1 and 2
Scope 1 is the direct emissions from activities that your company controls, i.e. emissions from your own vehicles and your own heat and energy production facilities (e.g. gas and oil for process or heating).
Scope 2 is the indirect emissions from the energy that your company purchases, i.e. electricity or heat. Here, the emissions occur elsewhere, e.g. at your local combined heat and power or district heating plant.
CO2 data requirements
The number of companies that are indirectly required to document CO2 emissions and reduction plans is increasing. This includes subcontractors that form a link in the value chain of larger companies – namely in their Scope 3.
In other words, if you are a subcontractor to a larger company, you will have to be able to provide data on your CO2 emissions in the future. And this can cost you competitiveness if you do not have the necessary insight.
Fortunately, you have the opportunity to turn upcoming requirements into opportunities and perhaps even expand your customer base. You can do this with a strategic approach to the work of calculating, reducing and communicating your company's CO2 footprint. Here you will get inspiration for a roadmap for how you can work towards meeting your goals.
Scope 3
Scope 3 covers all other indirect emissions from your company's value chain, both upstream (including emissions related to your suppliers) and downstream (including emissions from the use and disposal of your products). These are emissions from sources that your company does not own or control. Examples include purchasing, services and freight.
How it is done
Mere about the process
1. Get control of your data – don’t worry, you have most of it
All elements in your value chain have an emission. And you have paid for all emissions. Your financial system therefore has figures for everything you have bought and thereby emitted. Whether it is kWh of electricity, tonnes of steel or money spent on the lunch scheme, these figures exist or can be estimated. Therefore, start small and work your way up as you gain more knowledge about climate data and where to find it. You may wish to use the Danish Business Authority’s publicly available CO2 calculation tool, the Climate Compass (Klimakompasset), which makes it possible to calculate your CO2 emissions for Scope 1, 2 and 3.
2. Get top ownership and everyone on board
Ensure ownership and support at management level, both strategically and in relation to setting the framework for which functions and employees should be involved in the work with CO2 mapping and climate strategy. This can be done, for example, be responsible for data, purchasing and accounting, production and design, communication, HR, the employee on the production floor and the marketing and sales manager.
3. Create an overview with the CO2 accounting that provides insight
Create a CO2 accounting for Scope 1, 2 and 3 to get an overview and knowledge of where the shoe is pressing. The work with Scope 3 can seem overwhelming and difficult to tackle, but you don't have to understand and fix everything now. Start with the largest items and increase your understanding of these emissions and your options for action to reduce them - this is where initiatives will have the greatest effect.
- Scope 1 and 2
To reduce your company's overall climate footprint, it is necessary to look at emissions across the entire value chain, but start by focusing on initiatives in Scope 1 and 2. Start with the low-hanging fruit - think efficiency improvements, electrification and the transition to more green supply. This will put your own house in order while you gain knowledge about your company's climate impact and become better equipped to work with Scope 3. - Scope 3
Scope 3 often covers the majority of total emissions and can therefore take the breath away from many small and medium-sized companies. But don't let yourself be paralyzed by action. Start by doing a 'hotspot analysis' that provides an overview of your emission sources by ranking them from largest to smallest. You can also benefit from researching your suppliers' climate goals and engaging in dialogue with them to be armed with the knowledge to prioritize your own efforts.
4. Communicate transparently, honestly and ambitiously
Use data and knowledge as the foundation for your sustainability communication. This way, you can talk from the inside out about your long-term sustainability goals and about the specific activities and initiatives that bring you closer to the goal. Talk openly and honestly about your visions and interim results on the way to your goals. This contributes to credibility and trust with your customers.
5. Think about sparring & partnerships
It may seem counterintuitive to engage in dialogue with competitors and other stakeholders. But the goal as well as the dilemmas in relation to climate are the same for many companies – and therefore the potential in sparring, knowledge sharing and partnerships is very large. Have the courage to engage in open dialogue with customers and competitors in your industry. In this way, you can create joint solutions to common challenges.
You can get more inspiration and help with CO2 calculation, climate strategy and branding through the project Klimaklar SME, which you can read more about at danskindustri.dk.
