Business Working Together for a Low Carbon Future - Business in the Community Ireland
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Business Working
Together for a Low
Carbon Future
Net-Zero backed by Science-based Targets
PwC’s 3rd Annual Report on the Business in the
Community Ireland (BITCI) Low Carbon Pledge
PwC June 2021
BUSINESS
IN THE
COMMUNITY
IRELAND
PwC Report on the BITCI Low Carbon Pledge |1
2 | PwC Report on the BITCI Low Carbon Pledge
Ministerial Foreword
The COVID-19 pandemic is still part of our lives. We continue to live
in extraordinary circumstances, with unprecedented economic and
social implications. However, as we look to emerge from this crisis,
we will do so sustainably and in an inclusive way, as we rebuild our
economy and society.
We continue to see the impacts of the The Business in the Community Ireland
climate and nature emergencies all around Low Carbon Pledge has taken a major
us, as it shapes our lives and communities. step forward, with signatories committing
These are the most pressing challenges of to science-based targets aligned with the
our lives. The Government is taking decisive Paris Agreement. With over 60 businesses
Climate Action, providing a legislative signed up to The Pledge, there is strong
Eamon Ryan TD path to achieving the ambitious target good alignment between this initiative
of 51% reduction in carbon emissions in and the roadmap set by the Climate Bill.
Minister for Transport, Climate, this decade and setting us on the path to Business leadership is a crucial lever
Environment & Communications net-zero by 2050. for change, to make this a competitive
challenge, and use innovations like the Low
The Climate Bill shows Ireland can be a Carbon Pledge to get to net-zero faster.
world leader on Climate Action. A new
Climate Action Plan will be developed, Through the decisions you make in
providing guidance for the decarbonisation conducting your operations, to leverage
of each sector of the economy. We must the influence you exert on your supply
work collectively across Government, chain and customers, your actions and
enterprise, and wider society to address the influence are key to delivering on the step
challenges and realise the opportunities that change that is required. I call on you to
such changes can hold. All of this will be engage in the movement led by Business
done in conjunction with the development in the Community Ireland. This is a crucial
of the revised National Development Plan, step towards the transformational change
which is central to the Government’s new required.
Economic Recovery Strategy.
I want to acknowledge the considerable
This is the decade for change and this year, effort in preparing this report by Business
COP26 will set the tone for how the world in the Community Ireland, supported by
plans to achieve the ambitious climate the Co-Chairs of the Low Carbon Sub-
targets that have been set. Governments group, Mark Foley, CEO, EirGrid and
and business must take significant strides Denis O’Sullivan, Managing Director, Gas
forward in the next five to ten years to Networks Ireland.
decarbonise and support nature restoration.
Transformational change is required, as we
create new circular, more efficient, digital
economies, and an inclusive and vibrant
society.
4 | PwC Report on the BITCI Low Carbon Pledge
Contents
1. Introduction from Business in the Community Ireland (BITCI) 7
2. The Decarbonisation Agenda 10
2.1 Introduction from PwC 11
2.2 Ireland’s Decarbonisation Agenda 11
2.3 External Perspective on the Climate Agenda
and the Role of Business 13
3. Background to the Low Carbon Pledge 15
3.1 Science-based Targets 16
3.2 Introduction to the New Pledge 16
3.3 Capturing the Journey to Setting Science-based Targets 16
4. Low Carbon Pledge - Results Overview 21
4.1 Introduction to The Pledge Signatories 24
4.2 The Journey to Science-based Targets 25
4.3 Net-zero 27
4.4 Approach 28
4.5 Carbon Accounting 30
4.6 Challenges Companies are Facing 31
4.7 COVID-19 - Challenges & Lessons Learned 33
4.8 Carbon Offsetting 33
4.9 Reporting 34
5. Case Study Analysis 36
5.1 ABP Foods 37
5.2 AIB 39
5.3 Aviva 40
5.4 PwC 42
5.5 Veolia 43
5.6 Deep Dive Topics 46
6. Conclusion and Recommendations 49
PwC Report on the BITCI Low Carbon Pledge |5
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1 BUSINESS
IN THE
COMMUNITY
Introduction from
IRELAND
Business in the Community
Ireland (BITCI)
Business in the Community Ireland’s Low Carbon Pledge (The Pledge) is
entering its third reporting year with a new ambition. Signatory companies
must align their climate action with what science says is necessary to limit
global warming to 1.5°C.
The Pledge aims to provide leadership, set a collective ambition, and drive
practical action on the climate crisis. With this new commitment, businesses take
a significant step forward. Businesses across all sectors need to play a vital role if
we are to address the climate and biodiversity emergency.
COVID-19 continues to impact on our lives and commitment focussing on tackling carbon impacts
on how business operates. The impacts of this across value chains. This is significant, as most
pandemic will live with us long after the virus has emissions lay within the supply chain, in most sectors
been eradicated. As countries work to rebuild their of economic activity.
economies, it must be done with sustainability at
its core, creating greener and even more inclusive The Pledge has moved towards business adopting
economies. We can reset our systems and build back carbon reduction targets based on science, and
better: building the businesses of tomorrow that will ultimately achieving a net-zero economy by 2050.
thrive in the low carbon future. Business as usual will This new Pledge3 calls on businesses to work
not succeed. towards setting science-based emission reduction
targets (i.e. what science says is necessary to limit
The time to act is upon us. 2021 will be the year that global warming to 1.5°C) by 2024 at the latest.
the world faces climate change head on, with the
United States re-committing to the Paris Agreement, 62 of Ireland’s biggest businesses have committed
vowing to take a leadership role on climate action, to The Pledge. In doing so, they are building
along with the recent surge of net-zero commitments resilient and robust businesses that will grasp the
both from countries and businesses. opportunities of the low carbon economy.
COP26 will be a focus point, as we lay the Businesses need to understand their carbon impacts
foundations for halving global emissions by 2030. across value chains. This is challenging, even for
What we achieve in this decade will be crucial the most carbon-mature companies. Through The
towards limiting global warming to 1.5°C. Pledge, we aim to support businesses, working
to better understand value chain emissions and
The Low Carbon Pledge demonstrates meaningful overcoming the challenges ahead.
business commitment to reducing carbon emissions
and enables wider and far-reaching complementary Over the past two years, The Pledge has provided
initiatives. Led by the Low Carbon Sub-group1 of several key actions and resources:
the Leaders’ Group on Sustainability2, the past
• The 2nd edition of this Report focussed on
12 months have seen The Pledge evolve to a
three aspects of scope 3 emissions that are
1 The Low Carbon Sub-group is chaired by the CEOs of Gas Networks
Ireland and EirGrid, with senior representatives from Arup, Dawn Meats,
ESB, Musgrave, and Veolia. 3 The Paris Agreement requires actions to be taken to keep global
2 The Leaders’ Group on Sustainability is a CEO-led, multi-sectoral temperature rise this century well below 2°C above pre-industrial levels.
collaboration to progress collective business action on critical The latest IPCC Report has stated that a 1.5°C temperature rise is aimed
sustainability issues facing business. for.
PwC Report on the BITCI Low Carbon Pledge |7
controlled by the business: business travel; waste Through these actions, The Pledge will play
management; and water usage. an important role in supporting companies in
decarbonising operations across their value chains.
• Landmark Scope 3 Research was published, to
Creating a platform for collaboration among
help business to understand the challenges of
businesses of all sectors provides an opportunity
scope 3 emissions and science-based targets –
for innovation and partnerships. Companies will
Progressing towards science-based targets
be required to continuously review and work on
• Signatories increased their expertise through improving their Climate Action Roadmaps. The
participating in Knowledge Sessions focussing on Pledge provides a key support to this process.
topics, such as understanding scope 3 emissions
and developing Climate Action Roadmaps. Looking to the future and the risks business will
experience, there is a high level of unpredictability.
These actions, along with the initial Pledge It has never been more important for businesses
requirements4, created a unique platform for across all sectors to prepare for these climate,
businesses to take the next step towards better wider environmental, social, and economic impacts.
understanding their entire carbon footprint. Resilience and adaptability will be key.
Incorporating carbon reduction targets to their entire
carbon footprint and across the value chain is vital to As investors and financial institutions recalibrate
achieving the expected climate action outcomes. business risks and ESG ratings increase in volume
and influence, it is imperative that business
The Pledge now asks of its signatories: has a rigorous process to measure, report, and
communicate actions across its supply and value
• Start the process of setting science-based
chains.
emission reduction targets by 2024 at the latest;
• Continue to advance the measurement, reporting Businesses are experiencing the need to evolve
and communication on carbon emissions and transform their operations to deliver a green
performance, and critically review and assess and socially inclusive future. This transformation
indirect and supply chain emissions; will be complex and challenging beyond what we
have experienced. It will be costly and take time to
• Collaborate with peers on this common challenge, research and innovate, creating partnerships and
as this will be the core enabler for change at ways of working. However, with all these challenges
the speed and scale needed – pre-competitive comes endless opportunities to build the products
collaboration will allow business to move quicker and services of tomorrow, supporting a just and
to low carbon solutions (i.e. technological, responsible transition.
process, investment);
Our aim is for The Pledge to provide leadership, set a
• Engage in dialogue on climate change with
collective ambition and standard, and drive practical
suppliers, employees, investors, and recognise
action on the climate crisis.
that business needs to adapt through re-design
of products and services, modifications to supply
models, and revisions to investment mechanisms.
Tomás Sercovich Mark Foley Denis O’Sullivan
CEO, Business in the CEO, EirGrid MD, Gas Networks Ireland
Community Ireland
4 All signatory companies commit to reducing their scope 1 and 2
greenhouse gas emission intensity by 50% by 2030.
8 | PwC Report on the BITCI Low Carbon Pledge
Organisations participating in this report
PwC Report on the BITCI Low Carbon Pledge |9
The transition to carbon
neutrality has major
implications for society,
the economy and
organisations. The efforts
needed to secure a more
sustainable country
require contributions
from all members of
society, from individual
households to businesses
to Government.
2
10 | PwC Report on the BITCI Low Carbon Pledge2
The Decarbonisation
Agenda
2.1 Introduction from PwC Global sustainability developments
PwC is proud to be once again working with BITCI A key focus of this year’s Low Carbon Pledge
on this the 3rd edition of the Low Carbon Pledge report is charting a pathway to net-zero and setting
report. The following sections outline the progress science-based targets (SBTs). More than 1,300
made by the signatory companies towards setting companies worldwide have set SBTs (submitted
and adhering to science-based targets (SBTs). The to Science Based Targets initiative (SBTi)). These
subsequent analysis and case studies highlight some verified emission-reduction targets, grounded in
key actions and exemplar business practices that are climate science5, put companies on a path to reduce
helping companies to drive their emission-reduction greenhouse gas (GHG) emissions and prevent
efforts and to progress on a pathway towards the worst effects of climate change. In the US,
genuinely sustainable business. President Joe Biden has taken an opposing view
to his predecessor in relation to climate action, and
immediately committed to re-join the Paris Climate
2.2 Ireland’s Decarbonisation Agenda
Agreement. Climate has continued to be a central
This year’s Low Carbon Pledge report comes at focus of Biden’s first months in office and during his
a challenging time for us all. The effects of the climate summit in April 2021 announced a pledge for
COVID-19 pandemic have been widely felt over the US to cut carbon emissions by 50-52% below
the last 18 months and will have a lasting impact 2005 levels by 2030. Canada, Japan and South Korea
both economically and socially. However, as we stepped up with similar promises at this summit.
move beyond the pandemic we must not forget the Meanwhile, the UK has adopted a ‘world-leading’
importance of urgently decarbonising our economy. sustainability position with a pledge to cut carbon
It would be easy to sacrifice sustainability initiatives emissions by 78% by 2035 from 1990 levels. They
in return for a faster economic recovery. However, in plan to achieve this with a focus on driving adoption
reality the disruption of the past year can be viewed of electric cars / low-carbon heating / renewable
as an inflection point which presents an opportunity electricity, reducing meat and dairy, while also
to pivot businesses towards a sustainable future. extending climate law to cover international aviation
and shipping6.
According to PwC’s Low Carbon Economy Index
(2020)7, the world needs to decarbonise at 7.7%
each year, while the current business-as-usual
decarbonisation rate is just 2.4% annually. In order
to achieve the Paris Agreement, countries must
immediately begin reducing emissions and make
steps towards a decarbonised future.
5 Source: SBTi, Science-Based Targets
6 Source: BBC, ‘Climate change: UK to speed up target to cut carbon
emissions’
7 Source: PwC, Net-Zero Economy Index 2020
PwC Report on the BITCI Low Carbon Pledge | 11Figure 1: Net-Zero Economy Index 2020
Business-as-usual
Fall in global carbon 2˚C decarbonisation 1.5˚C decarbonisation
decarbonisation rate
intensity in 2019 rate* rate*
(2000-2019)
1.5% a year 2.4% 7.7% a year 11.7% a year
400
350
Carbon intensity (tCO2/$mGDP)
300
250
200
150
100
50
0
2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
Europe’s dynamic climate agenda reparability and durability, and avoiding waste by
transforming it into high-quality secondary resources.
The European Green Deal, launched in December
The EU’s Farm to Fork Strategy introduced goals
2019, is a sustainable growth strategy that aims
and guidance to move towards a more healthy and
to unite and transform the Union into a modern,
sustainable food system in terms of pesticides,
resource-efficient and competitive economy, which
nutrients, antimicrobial resistance and organic
has no net emissions of GHGs by 2050 and where
farming. As part of this, the Commission has set
economic growth is decoupled from resource use.
specific targets to be achieved, such as 25% of total
This involves turning sustainability challenges into
farmland being used for organic farming by 2030
opportunities and making the transition just and
and reducing the sale of antimicrobials for farmed
inclusive for all. Key elements of this strategy include
animals and in aquaculture by 50%. July 2020 saw
boosting the efficient use of resources by moving
the introduction of strategies for energy system
to a circular economy, restoring biodiversity and
integration and hydrogen. The former provides the
minimising pollution.
framework for the green energy transition, while
The European Green Deal encompasses a range of the latter addresses how to transform hydrogen’s
activities which have already commenced. March decarbonisation potential into a reality through
2020 saw the introduction of European climate law investments, regulation, market creation, research
to enshrine the EU’s goal of being climate neutral by and innovation. The EU revised their 2030 emissions
2050 into legislation. This transformed the promise reduction target from 40% to at least 55% below
of climate neutrality by 2050, into a legally binding 1990 levels. If achieved, attainment of this target
commitment, along with outlining the necessary would put the EU on a firm pathway to reaching
steps to achieve this commitment. Soon after, the EU climate neutrality by 2050. These strategies and
announced their European Industrial Strategy, which others outlined by the European Commission will
is designed to prepare companies for a ‘future-ready inevitably require a huge amount of investment,
economy’ with three key priorities: (1) maintaining so the EU has developed the Sustainable Europe
global competitiveness, (2) making Europe climate- Investment Plan to mobilise at least €1 trillion of
neutral by 2050 and (3) shaping Europe’s digital investments over the next decade8.
future. The proposal of the Circular Economy Plan,
also in March 2020, emphasised the EU’s focus on Ireland’s long-term climate ambition
sustainable resource use, which is said to be one
of the main building blocks of the European Green Ireland’s long-term climate ambition broadly mirrors
Deal. This plan aims to ensure that resources used that of the EU, as they too have set the primary goal
are kept in the EU economy for as long as possible, to transition to net-zero by 2050. The Climate Action
by promoting sustainable products, empowering and Low Carbon Development Bill is designed to
consumers with access to information on product
8 Source: European Commission, A European Green Deal
12 | PwC Report on the BITCI Low Carbon Pledgesupport this transition to net-zero by establishing 2.3 | External Perspective on the
a legally binding framework with clear targets, Climate Agenda and the Role of
commitments, structures and processes to ensure Business
Ireland achieves its near and long-term goals. Key
elements of the Bill include the development of a
National Long Term Climate Action Strategy, which
will be updated every five years, and placing the onus
on government ministers to achieve legally-binding
targets set in their own areas. In addition, the Bill
requires each local authority to prepare a Climate
Action Plan, including mitigation and adaptation
measures, along with embedding five-year carbon
budgeting into law with various sectoral targets
proposed by the Climate Change Advisory Council9.
These carbon budgets outline the total amount of
GHG emissions that Ireland is permitted to emit
during each five-year period. This will help to produce Professor John Sweeney
short-term goals aligned with Ireland’s long-term
targets. While the specific numbers of the first budget Emeritus Professor of Geography
are due to be announced later this year, the 2021 at Maynooth University
Climate Bill states that Ireland’s first two carbon
budgets shall provide for a 50% reduction in GHG
emissions by 2030 from 2018 levels10. The policies
in the Climate Action Bill will create opportunities
for some sectors, such as renewables, but they are Professor John Sweeney offered
likely to put significant pressure on others, such us his insights and perspective on
as transport and agribusiness. Setting specific
the climate agenda and the role
climate budgets for each department will hold them
accountable for climate-related failures in the same
businesses can play in addressing
manner as monetary failures. climate change.
Challenges faced in Ireland Ireland’s commitment
According to the EPA, agriculture is the largest source The fight against climate change has to be a
of emissions in Ireland, representing ~35% of total joint endeavour between nations, civil society
emissions in 2019, while the transport and energy and business. Earlier this year, the Irish
sectors represented ~20% and ~16% respectively. government approved a climate bill that sets
However, the transport sector is the fastest growing emission reduction targets in law and puts
emitter since 1990 with a ~137% increase. Ireland is the country on a path to carbon neutrality by
struggling to comply with current emissions targets. 2050. The proposed law would commit Ireland
Non-Emissions Trading Scheme (non-ETS) emissions to cutting its emissions by 51% between 2018
were estimated at 2-4% below 2005 levels in 2020, and 2030 and to be net-zero no later than 2050.
which is significantly behind the target of 20%. The While this represents a significant step up in
EU target requires this reduction to be 30% by 2030, ambition, this commitment is simply a step
which will require mass adoption of electric vehicles towards aligning our decarbonisation rates
and other low/zero carbon fuel solutions. To move with the Paris Agreement. In reality, Ireland
towards achieving these targets, Ireland’s current as a developed country, is disproportionately
policy position is to reduce 2050 CO2 emissions by responsible for the existing level of atmospheric
at least 80% from 1990 levels across the electricity carbon and the recently committed to 7% p.a.
generation, built environment and transport sectors. reduction should be considered a minimum level
Meanwhile, they aim to become carbon neutral in the of reduction rather than an aspirational target.
agriculture and land-use sector without compromising Exceeding this level would give some leeway
capacity for sustainable food production11. The extent to developing countries as they struggle to deal
of these challenges cannot be underestimated, with the current and future impacts of climate
meaning that an immediate and collaborative effort is change while in parallel looking to develop
required from all sectors, companies and individuals sustainably and navigate a pathway to net-zero.
across the Irish economy.
9 Source: Gov.ie, Climate Action and Low Carbon Development
(Amendment) Bill 2021
10 Source: Irish Times, ‘How we can frame Ireland’s carbon budgets’
11 Source: EPA, Environmental Indicators
PwC Report on the BITCI Low Carbon Pledge | 13Climate action with The role of business
consumers at the core
The transition to a low carbon economy will be
Climate action has grown from modest roots, transformational for companies. Businesses that
championed by small groups of informed individuals, do not adapt quickly will be at risk, while those that
to being something that now engages large portions respond rapidly will be better positioned to access
of society. Today, consumers are much more the resulting opportunities. The most obvious
informed as to the urgency of these issues, and starting point for any company is to assess their
they increasingly realise the power of their collective true carbon baseline covering scope 1, 2, and 3
actions and buying behaviours. Consumers are emissions. Getting a true picture of the carbon
recognising the seriousness of the climate and emissions associated with each product or service
biodiversity emergencies and are putting pressure on allows the company to adequately plan for a zero-
companies to embrace more sustainable business carbon future. They then need to plan an appropriate
practices. This very rapid mobilisation of consumer pathway to net-zero which aligns to science-based
action can have very negative impacts on the viability targets. This alignment must include short term
of products or services that are not considered to be intermediate targets, such as annual reporting
sustainable. The private sector in Ireland will have to and management accountability. While internal
respond in a proactive and transparent way to this governance arrangements are important it is vital that
ever-increasing consumer focus and ensure that their the company puts in place rigorous and transparent
products or services are genuinely low carbon and carbon reporting, which is externally validated, in
strictly aligned with sustainable business practices. order to give external stakeholders, including the
Today’s consumers are very sensitive to corporations’ consumer, confidence that the company is indeed on
claims that are considered to be ‘greenwashing’ a trajectory to net-zero.
and any perception that a company is exaggerating
their environmental credentials is likely to have very
negative commercial ramifications.
Role of policy-makers
While the citizen may fundamentally drive climate
action, policy makers play a critical role in creating
the enabling policy and regulatory environment which
signals to companies, via both the ‘carrot’ and the
‘stick’, how low carbon behaviours are incentivised.
Strong and consistent leadership on this topic is
essential as policy certainty allows companies
to take a longer-term perspective when making
investments and formulating strategy. For example,
clear signposting on future increases in carbon prices
may encourage companies to invest earlier in low
carbon solutions. Policy makers also have a critical
role to play in mapping out specific decarbonisation
pathways for each sector. The specific sectoral
pathways again provides clarity on what business
practices will be more sustainable. In many cases this
will require state investment in enabling infrastructure
or support schemes or the removal of environmentally
damaging subsidies. Examples would include
adequate electric car charging infrastructure or
financial schemes that support deep retrofitting of
homes. The societal impact of any transition must
also be carefully considered. Where any group of
citizens is disproportionately disadvantaged, support
schemes must be put in place to enable the retraining
of the affected cohort. This is essential if we are
to maintain continued societal support for the low
carbon transition.
14 | PwC Report on the BITCI Low Carbon PledgeTo achieve the global emission
reduction set out in the Paris
Agreement and limit global
temperature rise to 1.5°C compared to
pre-industrial levels, businesses must
play a leading role. The Low Carbon
Pledge aims to demonstrate the
collective commitment of businesses
to measure, report and communicate
on their journey to decarbonisation.
3
PwC Report on the BITCI Low Carbon Pledge | 153
Background to the
Low Carbon Pledge
3.1 Science-based Targets 3.2 Introduction to the New Pledge
The Science Based Targets initiative (SBTi) drives Business in the Community Ireland’s (BITCI) Low
ambitious climate action in the private sector by Carbon Pledge is entering into its third reporting year
enabling companies to set science-based emission- and this year’s commitment represents a step change
reduction targets. Science-based targets (SBTs) in the level of ambition. The Pledge now requires that
provide a well-defined pathway for companies to all signatories commit to setting SBTs no later than
reduce greenhouse gas (GHG) emissions, helping 2024, and significantly review and assess indirect
to avoid the worst effects of climate change and and supply chain emissions. This more ambitious
future-proof business growth. Targets are considered Pledge builds upon one of the recommendations
‘science-based’ if they are in line with the latest in last year’s report, which called on companies to
climate science necessary to meet the goals of the adopt carbon-reduction targets based on the latest
Paris Agreement – to limit global warming to well- climate science. The ultimate goal of The Pledge is to
below 2°C above pre-industrial levels and pursuing achieve carbon neutrality. Setting SBTs represents a
efforts to limit warming to 1.5°C12. SBTs are short significant step forward towards a net-zero economy
to medium-term milestones, which aim to mobilise by 2050.
the private sector to take urgent climate action and
ultimately enable companies to reach their long-term
climate ambitions. 3.3 Capturing the Journey to Setting
Science-based Targets
Despite government efforts, GHG emissions continue
to increase. Under current trajectories, global mean One of the objectives of this report is to demonstrate
temperatures are projected to increase by 2.2°C the progress made by the signatory companies in
to 4.4°C by the end of this century.13 The private setting SBTs and to detail their specific journeys
sector has a central role to play in ensuring that towards decarbonising their operations across the
the global temperature goals are met, however the entire value chain. A questionnaire, developed by
aggregation of existing company targets would not both BITCI and PwC, was used to collect data for
achieve the desired target and greater ambition is each company. All signatory companies responded to
required. The majority of global GHG emissions are the questionnaire14, giving a 100% response rate. The
directly or indirectly influenced by the corporate aim of the questionnaire was to:
sector. Many companies, recognising the risk climate
• Establish where companies are on the journey to
change poses to their business, and the opportunity
formally setting SBTs;
it creates for leadership and innovation, have set
GHG emissions reduction targets. Yet, to date, most • Determine what is driving the ambition to set
companies’ targets do not match the ambition and SBTs and understand any sectoral differences;
timeframes consistent with a 1.5°C future.
• Determine where companies are on the pathway
This new more ambitious Pledge aims to demonstrate to assessing their scope 3 emissions; and
the commitment of Irish businesses to reducing • Ascertain what companies find to be the main
their GHG emissions in line with the SBTs and to challenges when setting SBTs.
demonstrate their willingness to take a leadership role
in helping to achieve Ireland’s emissions reduction
objectives.
14 There were 60 questionnaire responses as three companies; Janssen
Pharmaceutical Sciences UC, Johnson & Johnson Vision Care Ireland
UC and DePuy Synthes submitted their questionnaire responses as one
entity (“Johnson and Johnson Campus Ireland”) due to being part of a
12 Source: SBTi, Science-Based Targets Global company with an Irish Campus approach structure in tackling
13 Source: SBTi, Science-Based Targets Manual their Carbon challenges.
16 | PwC Report on the BITCI Low Carbon PledgeSection 4 provides a breakdown of the main findings and observations stemming from the questionnaire
responses.
Table 1: 62 Low Carbon Pledge signatories and report participants
Company Sector15 Company Sector
A&L Goodbody Professional services HEINEKEN Ireland Agribusiness/food & drink
Abbvie Pharma/med-tech Hovione Ireland Pharma/med-tech
ABP Ireland Agribusiness/food & drink Iarnród Éireann (Irish Rail) Transport/logistics
Accenture Technology Irish Distillers Agribusiness/food & drink
Actavo Construction Irish Water Energy & utilities
Janssen Pharmaceutical
AIB Group Financial services Pharma/med-tech
Sciences UC
Johnson & Johnson
Aldi Retail Pharma/med-tech
Vision Care
Allianz Financial services KBC Bank Ireland Financial services
An Post Transport/logistics Keelings Agribusiness/food & drink
Arup Professional services KPMG Professional services
Aviva Financial services Lidl Ireland Retail
Marks & Spencer (Ireland)
Bank of Ireland Group Financial services Retail
Ltd
Facilities management/ Facilities management /
Bidvest Noonan Momentum Support
foodservice foodservice
Boots Retail Mercury Eng. Construction
Britvic Ireland Agribusiness/food & drink Musgrave Group Retail
BT Technology Ornua Agribusiness/food & drink
Cairn Homes Construction Permanent TSB Financial services
Cook Medical Pharma/med-tech PM Group Professional services
Cisco Technology PwC Professional services
Dawn Meats Group Agribusiness/food & drink RTE Communications
Deloitte Professional services Sky Ireland Communications
Facilities management/
DePuy Synthes Pharma/med-tech Sodexo Ireland
foodservice
DHL Supply Chain Transport/logistics SSE Ireland Energy & utilities
Diageo Ireland Agribusiness/food & drink Tesco Ireland Retail
Dublin Bus Transport/logistics Three Ireland Communications
EirGrid plc Energy & utilities Ulster Bank Ireland DAC Financial services
Enterprise Rent-a-car Transport/logistics Veolia Professional services
ESB Group Energy & utilities Verizon Technology
Fujitsu Ireland Technology Virgin Media Ireland Communications
Gas Networks Ireland Energy & utilities Vodafone Ireland Communications
Grant Thornton Professional services William Fry Professional services
15 The sector “professional services” includes environmental services. The sector “financial services” includes insurance. Note that agribusiness and food &
drink have been combined in this year’s report.
PwC Report on the BITCI Low Carbon Pledge | 17Understanding scope 1, 2 & 3 emissions When companies set SBTs, they also benefit from
the target validation process and detailed feedback
• Scope 1: Direct GHG emissions occur from and support provided by the technical expertise of
sources that are owned or controlled by the the Science Based Target initiative (SBTi). Businesses
company. This segment comprises four principal who sign the SBT commitment letter, are immediately
emissions sources: process, stationary, fugitive recognised as “committed” on the SBTi website, as
and mobile. well as the websites of CDP, UN Global Compact and
We Mean Business.
• Scope 2: Indirect greenhouse gas emissions from
consumption of purchased electricity, heat or
steam. Setting science-based targets
• Scope 3: Other indirect emissions. Figure 2 Embedding SBTs in a company’s corporate and
displays the 15 categories of scope 3 emissions, sustainability strategy is crucial. The SBTi have a
as outlined by the Greenhouse Gas Protocol.16 general set of criteria that companies must follow
when setting SBTs:
The benefits of setting
science-based targets • Boundaries: Targets must cover 95% of scope 1
and 2 GHG emissions, and scope 3 where > 40%
SBTs are undeniably good for the planet but setting of emissions.17 18
them also makes business sense. The following are • Timeframe: 5/10/15 years into the future from
benefits companies can expect to see after setting the date the target is submitted to SBTi for official
SBTs: validation.
1. Stakeholder confidence: Increasingly investors • Ambition: At a minimum, scope 1 and scope
are taking an interest in companies’ environmental 2 targets must be consistent with the level
policies as they become more focused on value of decarbonisation required to keep global
protection. Some companies are using SBTs to temperature increase to well-below 2°C
underpin their sustainability ambitions with a compared to preindustrial temperatures. However,
view to meeting customer expectations and, in companies are encouraged to pursue greater
many cases, to maintain a fundamental ‘licence efforts towards a 1.5°C trajectory.
to operate’.
• Offsets: The use of offsets must not be counted
as emissions reduction toward the attainment of
2. Policy and regulatory readiness: Companies
companies’ SBTs.
are anticipating enhanced climate policy and
regulation and SBTs are viewed as an important
means of staying ahead of these changes.
3. Increased innovation: Companies are aligning
their strategies to a low-carbon economy which
allows them to access the significant associated
business opportunities.
Figure 2: Overview of scope 1, 2 and scope 3 emissions
Scope 3 Scope 1 and 2 Scope 3
Supply chain ('Upstream') Customers ('Downstream')
1. Purchased goods and services 9. Downstream transportation and distribution
2. Capital goods 10. Processing of sold products
3. Fuel and energy related activities (not
11. Use of sold products
included in scope 1 or scope 2) Reporting
4. Upstream transportation and distribution company 12. End-of-life treatment of sold products
5. Waste generated in operations 13. Downstream leased assets
6. Business travel 14. Franchises
7. Employee commuting 15. Investments
8. Upstream leased assets
17 Source: SBTi, Science-Based Targets Criteria
18 All companies that are involved in the sale or distribution of natural gas
or other fossil fuel products must set scope 3 targets for the use of sold
products, irrespective of the share of these emissions compared to the
16 Source: Greenhouse Gas Protocol, Scope 3 Standard total scope 1, 2, and 3 emissions of the company.
18 | PwC Report on the BITCI Low Carbon PledgePwC Report on the BITCI Low Carbon Pledge | 19
Setting SBTs is a five-step process (see figure 3 The science-based path to net-zero
below). Once signatories have completed step 1, and
formally committed to setting SBTs, they have 2 years The path to net-zero must be science-based.
to have their SBTs set and approved. As every sector Extensive scientific research clearly states the need
is different, the SBTi is developing sector-specific to reach net-zero global CO2 emissions by mid-
guidance (for more, see table 4 in section 4.6). century in order to limit global warming to 1.5°C
and to reduce the destructive impacts of climate
Figure 3: Five-step process of setting science- change19. The concept of net-zero has risen in
based targets prominence over the last few years, as companies are
increasingly committing to reaching this ambitious
Commit goal. In contrast to SBTs, net-zero targets indicate
carbon neutrality, rather than direct emissions
Submit a letter establishing your
reductions and therefore carbon offsetting is allowed.
intent to set a science-based target.
However, not all net-zero targets are equal. The
Develop definition of “net-zero”, as well as the path to get
Work on an emissions reduction there, are diverse and often inconsistent. However,
Maximum 24 months
target in line with the SBTi’s criteria. the SBTi has launched a process to develop the first
science-based global standard for corporate net-zero
Submit targets, to ensure that companies’ net-zero targets
Present your target to the SBTi for translate into action that is in line with achieving a
official validation. net-zero world by no later than 2050. This standard is
expected to be finalised later this year. SBTs provide
Communicate
the short and medium-term milestones to align with
Announce your target and inform the Paris Agreement but these targets can also give
your stakeholders. credibility to companies’ net-zero commitments.
Disclose
Report company-wide emission and
track target process annually.
19 Source: SBTi, Net-zero
20 | PwC Report on the BITCI Low Carbon PledgeThe Low Carbon Pledge
report is underpinned
by the data provided by
the signatories. Topics
covered include the
journey to science-based
targets (SBTs) and net-
zero; approaches; carbon
accounting; challenges
faced; carbon offsetting;
and reporting.
4
PwC Report on the BITCI Low Carbon Pledge | 21Low Carbon Pledge
Summary Findings
Pledge reminder Main factors for signing up to this
more ambitious Pledge are
This new Pledge 40%
calls on businesses 40%
to work towards 30%
setting science-
Signatories
based emission 20% 24%
reduction targets (i.e.
what science says 10%
10% 10%
is necessary to limit 9%
7%
global warming to 0%
Business Reputation Regulation / Corporate Stakeholder Strategy
1.5°C) by 2024 at the model
resilience
policy responsibility pressure
latest.
62 companies have Progress of signatories on the journey to
signed this year’s science-based targets (per stage)
more ambitious The Pledge signatories have shown real ambition and progress towards
Pledge, up from 58 setting SBTs.
signatories in 2020. Fully set SBTs,
received SBTi 30%
approval
Set SBTs, awaiting 3%
SBTi approval
62 companies, across 11
Stage of SBT journey
Formally committed,
sectors, have signed the Low 22%
analysis ongoing
Carbon Pledge. Analysis of
the questionnaire responses Formally committed,
provides insights and 13%
analysis outstanding
demonstrates the progress
made by the signatory Initial analysis
7%
companies in setting science- complete
based targets (SBTs) and detail
their specific journeys towards Signed Pledge, but
25%
decarbonising their operations not mobilised
across the entire value chain.
0% 10% 20% 30%
Signatories
22 | PwC Report on the BITCI Low Carbon PledgeProgress of signatories on the journey to Challenges The Pledge
science-based targets by sector signatories are facing
Signatories within the technology, retail and agribusiness/food & drink sectors are the The most common challenges
most advanced on the journey to SBTs. signatories face, across all 11 sectors,
when measuring/reporting scope 3
Have SBTi-approved SBTs emissions and setting SBTs are:
Formally committed to SBTi
Signed Pledge but not formally committed to SBTi
Technology
Retail 50%
100%
33% 17%
1 Data
accessibility
Agri./food & drink 50% 25% 25%
Facilities/foodservice
Pharma/med-tech 25%
33% 33%
75%
33%
2 Complexity of
the assessment
Sector
Prof. services 22% 44% 33%
Comms. 20% 60% 20%
Energy & utilities 20% 60% 20% Net-zero
Construction 67% 33%
Science-based targets are short to
Financial services 57% 43%
medium-targets which are viewed by
Transport/logistics 50% 50% the signatories as stepping-stones to
0% 20% 40% 60% 80% 100% achieving their longer term net-zero
ambitions.
Signatories within the agribusiness/food & drink sector have shown that it is possible
42+58+H
to move ahead, even if formal SBTi sectoral guidance is not available.
of signatories
Non-financial reporting have set
42% a net-zero
Non-financial reporting has moved from something that used to be a ‘nice-to-have’, ambition
to something that stakeholders now expect. External verification ensures emissions
65+35+H
data is both robust and accurate.
The timeframe for the net-zero
of signatories have their non-financial data verified by commitment varied based on
65% third parties, compared to 53% last year whether only scope 1 & 2 emissions
were considered. Positively 41% of
respondents have set scope 3 net-zero
targets for 2030 or earlier, which is
Signatories used a variety of non-financial reporting frameworks. The selection was significantly more ambitious than the
typically based on the frameworks impactfulness, transparency and credibility. national trajectory of 2050.
60%
57% 2030 or Beyond
earlier 2030
40%
Signatories
Scope 1 and 2
56% 44%
emissions
32% Scope 3
20% 41% 59%
23% emissions
22%
13%
0%
CDP Global Task Force Sustainability Other
Reporting on Climate- Accounting
Initiative (GRI) related Financial Standards
Dislosures Board (SASB)
(TCFD)
PwC Report on the BITCI Low Carbon Pledge | 234
Low Carbon Pledge
Results Overview
4.1 Introduction to The Pledge Business model resilience was the main driver for
Signatories signing this more ambitious Pledge, with 40% of
companies citing this reason. The global pandemic
Since commencing the Low Carbon Pledge, there has has challenged businesses and has forced many to
been an annual increase in the number of signatories, innovate and rethink their business model, in order
and this trend has continued. This is a promising sign to survive and thrive. This trend will continue as
as we continue to see more businesses addressing we decarbonise our economy, and thus business
the issue of climate change. 62 companies have will have to continually adapt. Reputation followed
signed this year’s more ambitious Pledge (see table closely, with 24% of signatories recognising it
1), up from 58 signatories in 2020. The signatories as a driving factor. In recent years we have seen
span 11 different sectors, with professional services consumers putting pressure on companies to
firms being the largest sector group. embrace more sustainable business practices and
offer alternative choices. The modern consumer is
Figure 4: Signatories per sector more educated and becoming increasingly aware of
unsustainable business practices. Companies need
Prof. services to work harder to maintain their reputation and retain
their customer base. Other drivers for signing The
Agri./food & drink Pledge included stakeholder pressure, corporate
and social responsibility, policy and regulation. Some
Financial services cited signing up because it was simply the right thing
to do.
40+60+H
Pharma/med-tech
Retail of signatories saw
business model
40%
Sector
Technology
resilience as the
Comms
main driver for
signing the Low
Energy & utilities Carbon Pledge
Transport/logistics
Construction
Facilities/
foodservice
0 2 4 6 8 10
24 | PwC Report on the BITCI Low Carbon PledgeFigure 5: Main factors for signing the Low Carbon Pledge
40%
40%
30%
Signatories
20% 24%
10%
10% 10%
9%
7%
0%
Business model Reputation Regulation / policy Corporate Stakeholder Strategy
resilience responsibility pressure
30+70+H
4.2 The Journey to Science-based
Targets of signatories have
The journey to science-based targets (SBTs) can set and approved
be challenging, however The Pledge signatories SBTs 30%
have shown real ambition. In many cases significant
progress has already been made with 30% having
successfully set SBTs and had them approved by
the Science Based Targets initiative (SBTi). A further
38% have formally committed to setting SBTs, 3% In terms of fully setting SBTs and receiving approval
of which have set them and are awaiting approval. from the SBTi, the technology sector is the best
This means that 68% of the signatories are well performing with all five companies having achieved
progressed to setting SBTs by 2024. Of the remaining this benchmark. Both the retail and agribusiness/food
signatories (32%), 7% have already completed & drink sectors are also progressing well, with 50%
an initial analysis. It is important to note that the of signatories having fully set and formally submitted
majority of those who have not yet set SBTs, have SBTs.
set emission-reduction targets, which is an important
step towards setting SBTs.
Figure 6: Progress of signatories on the journey to science-based targets (per stage)
Fully set SBTs, received SBTi approval 30%
Set SBTs, awaiting SBTi approval 3%
Stage of SBT journey
Formally committed, analysis ongoing 22%
Formally committed, analysis outstanding 13%
Initial analysis complete 7%
Signed Pledge, but not mobilised 25%
0% 10% 20% 30%
Signatories
PwC Report on the BITCI Low Carbon Pledge | 25Figure 7: Progress of signatories on the journey to science-based targets (per sector)
Have SBTi-approved SBTs Formally committed to SBTi* Signed Pledge but not formally committed to SBTi
Technology 100%
Retail 50% 33% 17%
Agri./food & drink 50% 25% 25%
Facilities/foodservice 33% 33% 33%
Pharma/med-tech 25% 75%
Prof. services 22% 44% 33%
Comms.
Sector
20% 60% 20%
Energy & utilities 20% 60% 20%
Construction 67% 33%
Financial services 57% 43%
Transport/logistics 50% 50%
0% 20% 40% 60% 80% 100%
*Note: “Formally committed to SBTi” covers those who have submitted the official letter, establishing intent to set a science-based
target, but have not received approval on targets submitted.
Different sectors have different challenges when it Signatories who have set
comes to setting SBTs, stemming from either the science-based targets
nature of the sectoral emissions profile or sometimes
with specific aspects of the SBTi methodology. No For global companies a decision must be taken as
signatories within the following sectors have yet set to where targets are set. In some instances the high
SBTs: construction, financial services and transport/ level targets are set at a global level, with regional
logistics. Three signatories within the pharma/med- units then charged with determining the specific
tech sector have signed The Pledge but have not regional/country pathway. Figure 8 (below left) shows
started their journey to submitting SBTs. that almost all signatories who have fully set and
approved SBTs, have set them at a global level.
One signatory, in the technology sector, has their
Signatories within the technology, approved SBTs set on both a global and a regional
retail and agribusiness/ level. Figure 8 (below right) shows that those in the
food & drink sectors are formal SBT process (but have not received approval)
are increasingly making submissions on a regional
the most advanced on level.
the journey to science-
based targets
Figure 8: Level at which respondents are setting their science-based targets
Respondents with SBTi-approved SBTs (%) Respondents who have formally committed to SBTi (%)
Both
5%
Both
33%
54%
Global
13%
95%
Global Regional
Note: 'Both' means set at both a global and a regional level
26 | PwC Report on the BITCI Low Carbon PledgeThe number of signatories making formal Table 2: Timeframe chosen by respondents when
submissions to the SBTi is increasing year-on-year. setting science-based targets
Of the 20 signatories that have approved SBTs, one
signatory in the agribusiness/food & drink sector was
very much a leader in this space, having made their 5 years 10 years 15 years
submission back in 2015. The remainder submitted Scope 1 and
25% 45% 30%
their targets from 2017 onwards. The significant 2 emissions
escalation of interest in sustainability over the last 24
Scope 3
months is also evidenced in this area (see figure 9). 31% 44% 25%
emissions
The drop in SBT submissions in 2020 may be as a
result of the challenges and uncertainty businesses
faced during the pandemic. As we progress into 2021 4.3 Net-zero
and beyond, we expect more submissions from our
Pledge signatories. Science-based targets (SBTs) are short to medium-
targets, which can be used as a stepping-stone to
Figure 9: Science-based targets submissions by achieve longer term net-zero ambitions. Therefore,
year among respondents although this report is primarily focused on setting
SBTs, net-zero commitments are also considered.
10
Very significantly, 42% of The Pledge signatories
have set a net-zero ambition. Of the signatories that
8 have not set a public net-zero ambition, 66% plan to
do so. One signatory, within the agribusiness/food
No. of respondents
& drink sector, commented that net-zero (including
6 scope 3) is currently not viable for their sector. This
is somewhat aligned to the national conversation on
net-zero for the agricultural sector. Across all sectors,
4
the main challenges to setting a net-zero ambition
were found to be complexity of the assessment and
2
data availability.
42+58+H
0 of signatories have
2015 2016 2017 2018 2019 2020
set a net-zero
Companies were asked about the coverage of their
ambition 42%
SBT ambition i.e. whether they related to scope 1,
2 or 3 emissions. All have set SBTs for scope 1 and
2 emissions, with 82% also setting SBTs for scope
3 emissions. Setting SBTs to scope 3 emissions The sectoral breakdown of those who have set public
is compulsory if a company’s relevant scope 3 net-zero ambitions is similar to that of SBTs. The
emissions are 40% or more of its total carbon technology sector had the highest share, with four
footprint. out of five signatories having a net-zero ambition with
the remaining one planning to do so. Over 50% of
When setting SBTs, companies must also select signatories within the retail, energy & utilities, financial
the timeframe over which to achieve the targets. services and transport/logistics sectors have made
The most common timeframe chosen was 10 years. a public net-zero commitment. On the other hand,
A 10-year timeframe means that the majority of no signatories within the following sectors have yet
respondents are set to achieve their SBTs by 2030 declared a net-zero ambition: pharma/med-tech,
or earlier. This date is significant both at global and construction and facilities management/food service.
national level with our own climate action plan targets
calling out significant decarbonisation targets on a
sectoral basis. For many, a 5-year timeframe may be
too challenging to achieve while a 15-year timeframe
may not sufficiently signal ambition to customers,
employees or regulators.
PwC Report on the BITCI Low Carbon Pledge | 27Figure 10: Public net-zero ambitions per sector
Set net-zero ambition Not set net-zero ambition
Technology 80% 20%
Retail 67% 33%
Energy & utilities 60% 40%
Financial services 57% 43%
Transport/logistics 50% 50%
Sector
Comms. 40% 60%
Agri./food & drink 38% 63%
Prof. services 33% 67%
Pharma/med-tech 100%
Construction 100%
Facilities/foodservice 100%
0% 20% 40% 60% 80% 100%
Signatories who have set 4.4 Approach
a net-zero ambition
Companies were asked about their sustainability
Similar to SBTs, net-zero ambitions are often set strategies and how they were structured to deliver
separately for scope 1 and 2 and scope 3 emissions. on these strategies. Of the respondents, 90% have
See table 3 for an overview of timeframes. As a defined sustainability strategy. Of those, 94%
expected, the majority of respondents have set their have integrated their sustainability strategy into their
scope 1 and 2 ambitions to 2030 or earlier. Scope 3 corporate strategy and have an associated roadmap/
emissions are again proving more difficult to reduce, implementation plan. In addition, 93% of signatories
with slightly over half choosing a timeframe beyond have a dedicated sustainability lead within the firm,
2030. Positively 41% of respondents have set and 66% of which are at the executive level. Support
scope 3 net-zero targets for 2030 or earlier, which from the top is critical for any change programme and
is significantly more ambitious than the national these findings illustrate how seriously this group is
trajectory of 2050. One signatory, within the financial taking sustainability.
services sector, explained that they plan to get to net-
Notably 90% of signatories consider climate and ESG
zero for their loan book emissions (scope 3) by 2040,
in their strategic and operational decision-making
with the exception of agriculture, which is in line with
process, with 62% also factoring this into acquisition
the national trajectory.
and disposal decisions. This is important as it is
recommended that science-based targets (SBTs) are
Table 3: Timeframe chosen by respondents when
recalculated to reflect significant changes, such as to
setting net-zero ambition
company structure and activities (e.g. acquisitions,
divestitures), that may compromise the relevance and
2030 or earlier Beyond 2030 consistency of the targets. Signatories also attach
importance of climate and ESG in the attraction and
Scope 1 and 2
56% 44% retention of staff, appropriate risk management, and
emissions
asset management and supply chain planning. This
Scope 3 clearly illustrates how integral these topics have
41% 59%
emissions
become to all aspects of running a business.
28 | PwC Report on the BITCI Low Carbon Pledge90+10+H
Figure 11: Approach to delivering sustainability
of signatories strategies among respondents
consider climate
90%
50%
and ESG in 48%
46%
their strategic 40%
Respondents (%)
and operational
30%
decisions, while
62% consider these factors 20%
when considering acquisitions or
disposals 10%
6%
Respondents were asked a number of questions 0%
Centralised Decentralised Hybrid
that related to how they are structured to deliver
on their sustainability strategy and SBTs. Typically
an organisation may have started with a central Although organisational approach is important when
dedicated Sustainability team, however, they may delivering a business’ sustainability goals, signatories
look at alternate models as they begin to drive out also recognise that these ambitions must be present
significant change across the organisation. The throughout the firm. To that effect, 100% of signatories
majority of organisations have adopted either a stated that they engage their employees in their sus-
centralised or hybrid approach to delivering their tainability approach.
sustainability strategies. Of the three respondents
that have a decentralised approach (where
sustainability is embedded at a business unit level),
one is in each of the following sectors: pharma/med-
tech, professional services and agribusiness/food &
drink.
PwC Report on the BITCI Low Carbon Pledge | 29You can also read
