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Session 6 of the Chairperson Masterclass Series, organized by Climate Governance Malaysia in collaboration with Bursa Malaysia focused on the topic “Managing Scope 3 Emissions.” The session commenced with a welcome address by Tan Sri Wahid Omar, Chairperson of Bursa Malaysia where he stressed the need for board members to address climate issues. Bursa Malaysia was committed to global sustainability through initiatives such as the Bursa Carbon Exchange. Tan Sri Wahid concluded his remarks with a symbolic bell ringing for climate action in 2023, illustrating the collective dedication to enhanced climate governance. Dr. Sarinder Kumari, Council Member of Climate Governance Malaysia, introduced the speaker, Mr. Benjamin McCarron who is the Founder and Managing Director of Asia Research and Engagement.
Ben's presentation delved into the complexities of Scope 3 emissions, classifying them into 15 categories identified by the Greenhouse Gas Protocol. He highlighted the materiality of Scope 3 emissions, varying by sector, and stressed the need for a nuanced approach tailored to each industry's characteristics. The presentation provided tangible insights into setting a Scope 3 management plan, addressing barriers associated with data availability and economic feasibility. Ben encouraged businesses to collaborate, engage partners, and develop shared plans for emission reduction.
In the rapidly evolving landscape of corporate responsibility and sustainability, businesses are recognizing the imperative of understanding and addressing Scope 3 emissions for meaningful change. The session underscored the increasing significance of companies addressing Scope 3 emissions within the broader context of corporate responsibility and sustainability. Notably, financial institutions were at the forefront of a transformative shift in sustainable practices, focusing on quantification of financed emissions as a strategic move to estimate emissions linked to their investments. Financial institutions played a central role in addressing emissions across operational and product-related spectrums, aligning investment decisions with Net Zero objectives. The narrative emphasized the urgency of pro-active engagement, transparent disclosure, and a nuanced understanding of the profound sustainability implications of financial decisions.
Ben also shared insights by showcasing real-world examples from industry leaders such as HP, Unilever, Volkswagen, DBS, ING Bank, and CIMB.
Hewlett Packard (HP) is committed to achieving net-zero value chain emissions by 2040, concurrently aiming to reduce emissions by 50% by 2030 compared to their 2019 baseline. A significant 36% of HP's emissions originate from products in use, prompting the company to prioritize innovative solutions in product design to minimize customer energy consumption. Noteworthy initiatives include the development of efficient products, such as systems and printers with an Energy Star rating, ongoing enhancements in design, and the incorporation of high-efficiency drying technology (HED) in products like the HP T250 HD. Highlighting HP's dedication to sustainability and energy efficiency through cutting-edge innovations, the HP T250 HD consumes 60% less power per page than the HP Pagewide A2200.
Unilever was steadfast in its commitment to achieving net-zero emissions across its entire value chain by 2039, with an intermediate goal of halving its greenhouse gas impact by 2030. The company actively addresses sustainability challenges through GHG roadmaps for key materials and a stringent target of Zero Deforestation by 2023 for critical commodities. Engaging in industry partnerships like Transform to Net Zero, Unilever pursues transformative change within its sector. Additionally, the strategic focus on sustainable product design aims to generate €1 billion in annual sales from plant-based alternatives by 2027, underscoring Unilever's holistic dedication to environmental responsibility.
Volkswagen (VW) is committed to achieving net carbon neutrality by 2050, placing a significant emphasis on addressing Scope 3 emissions, particularly the impact of products sold, which contribute over 72% to total emissions. With a substantial investment of €52 billion in electric mobility initiatives by 2026, VW focuses on reducing fleet vehicle emissions, achieving a notable 26% increase in all-electric vehicle sales in 2022. The company has set ambitious targets, aiming for an 11% share in 2023 and a 20% share in 2025, while concurrently investing in renewable energy development and battery production to create a sustainable electric vehicle ecosystem.
ING is actively working towards achieving net-zero emissions by 2050, demonstrating a commitment to transparency in measuring and disclosing emissions across its business. Comprehensive tables provided by ING illustrate the financed emissions associated with the majority of its operations. Currently, ING discloses Scope 1 and 2 financed emissions, with a commitment to incorporating Scope 3 emissions into its reporting at the earliest opportunity. Impressively, the disclosed measurements from ING cover 94% of its lending activities, showcasing a thorough effort to account for and manage emissions in its financial operations. This proactive approach highlights ING's dedication to transparency and sustainability objectives.
DBS is leading the charge towards net-zero emissions by 2050, making history as the first Asian bank to outline sectoral pathways for financed emissions. The bank's ambitious targets encompass a diverse range of sectors, including Power, Oil & Gas, Automotive, Steel, Aviation, Real Estate, Shipping, Food & Agri, and Chemicals, reflecting a comprehensive strategy to address emissions across industries. DBS's Scope 3 sectoral targets specifically target emissions linked to products sold, with a particular emphasis on tailpipe emissions from new passenger vehicles. The bank's approach extends to collaborating with clients on their transition journey, expanding financing activities in the electric vehicle (EV) value chain, and offering support for effective transition plans. This multifaceted strategy illustrates DBS's commitment to fostering positive change and sustainability across the sectors it serves.
CIMB is committed to achieving net-zero emissions by 2050 and has taken significant strides in this direction by unveiling its 2030 targets for key sectors, including Palm Oil, Cement, Power, and Coal Mining, on November 23. This proactive initiative underscores the bank's dedication to addressing emissions within industries critical to its portfolio. CIMB's multifaceted approach involves a focus on Scope 1 and 2 emissions from cement manufacturing clients, a comprehensive decarbonization strategy, and active engagement with stakeholders, positioning the bank as a proactive leader in the financial sector's pursuit of climate change mitigation and net-zero emissions by 2050.
Ben’s presentation also discussed strategies for incentivizing supply chain decarbonization, both financial and non-financial, and emphasized the importance of building capability and recognizing achievements. The session also shared thought-provoking questions that could be used to guide businesses in managing Scope 3 emissions effectively, encouraging them to assess risks, set ambitious plans, allocate sufficient resources, and collaborate with partners.
Navigating Scope 3 emissions requires comprehensive understanding, proactive measures, and collaborative efforts. Businesses can learn from examples, adopt innovative strategies, and contribute meaningfully to the Net Zero agenda by addressing the challenges associated with Scope 3 emissions. As organizations navigate evolving frameworks like TCFD and ISSB, the imperative for a comprehensive understanding of their implications becomes apparent. The collective endeavour to tackle Scope 3 emissions, whether through reducing operational emissions, engaging the supply chain, or aligning investments with sustainability goals, plays a crucial role in building a more sustainable future. Ben’s presentation served as a call to action, urging businesses to glean insights from best practices and foster collaborative efforts for a greener tomorrow.
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