After mapping comes planning. The platform gives a list of tasks to be completed by sustainability professionals and warehouse managers. “It explains specifically what kind of materials you need to switch to, what stakeholders you need to involve, and who is responsible for this decarbonization activity,” Jordanova says. Jordanova claims that the science-based approach Jordanova used to analyse company data to set goals is crucial. Offsetting is not an option. However, companies can reduce their emissions.
Next comes reporting. This is important for both investors and business partners as well as consumers and regulators. The platform generates automated reports on a company’s environmental, social, and governance (ESG) impacts, which are roughly divided into three groups: Scope 1 are direct emissions from resources owned and controlled by the company; Scope 2 are indirect emissions from purchased energy, such as electricity, heating, or cooling. According to the Greenhouse Gas Protocol, all companies must disclose these data. They can even do more, if they wish: Companies are sometimes indirectly responsible for emissions from Scope 3 (the value chain).
Let’s return to the example of BMW. The group already buys electricity from renewable sources for its plants—there are even four wind turbines on its site in Leipzig. It is important to consider what happens after and before production. Around 70% of the current carbon emissions are created when cars or motorbikes are driven by new owners. BMW is closer to achieving its 2030 goal to reduce its overall carbon footprint by 40 percent. It must address how cobalt and lithium are extracted, processed and recycled in order to achieve this goal. “If you take a company like BMW, you’re talking about a vast, transformational challenge that is related to engaging not only your internal entities, but your suppliers,” says Jordanova.
Plan A created a module to allow companies to keep track of their carbon emissions through the value-chain in October 2022 (Scope 3). This means third parties, such as logistics partners or suppliers are welcome to enter their data on the platform. “This creates network effects for the whole decarbonization assessment,” says Jordanova.
It is crucial that companies disclose all emissions areas in their reports to avoid any greenwashing. Otherwise, their goal of achieving net-zero emissions may look good on paper but bad in practice—and well-meaning investors, partners, and consumers could be misled. Jordanova states that ESG reporting is becoming more crucial as US and European regulators have cracked down on greenwashing. This has caused companies to avoid big announcements about decarbonization. “All these net-zero targets are meaningless if we don’t really understand what it takes to achieve them,” she says.
Lubomila Jorova will speak at the Embassy of Kazakhstan on November 2, 2022. WIRED Impact Europe’s leading one-day event examining the fast-changing world of sustainability and ESG. Learn more, and then book your tickets here.
This article is in WIRED UK Magazine, January/February 2023.