The 2030 countdown for scope 3 emissions just keeps ticking…

2030 has been the distant beacon brands have been steering their corporate sustainability boats towards since climate scientists released reports in 2018 stating the world needs to reduce CO₂ emissions by about 45% from 2010 levels. This guidance spurred corporates to set ambitious emission reduction targets with 2030 as a major milestone to assess their progress. As we approach the five-years-to-go mark, however, most companies are lagging on these targets and will fail to achieve the first 2030 milestone successfully. 

This is not for lack of effort; for many brands, the water is just too murky. They don’t have the right technology, the depth of data, or the resources to accurately track their emissions (particularly scope 3) and therefore implement a strategy to effectively reduce those emissions with any significance. 

The world is realising that as far off as 2030 previously felt, the amount of work to be done to achieve the desired limiting of global warming to 1.5C is going to take more time, resources and attention than originally accounted for. Despite these setbacks, this realisation has put into context the urgent need for organisations to work with international groups towards stricter regulations and commitments. 

Currently the only major piece of mandatory disclosure regulation is the Corporate Sustainability Reporting Directive (CSRD) in the EU. This piece of legislation is intended to provide more comprehensive and transparent sustainability information to stakeholders, increase corporate accountability and ensure that companies contribute to the EU's sustainability and climate goals. One important component of CSRD which previous directives have lacked is a standardised reporting structure. As corporates struggle with data collection and reduction strategies, a standardised approach gives industries the opportunity to share knowledge and work to a common set of requirements. 

Following this year’s EU Scope 3 Innovation Forum in Amsterdam, Henkel’s chief procurement officer, Bertrand Conqueret, shared in an interview with Innovation Forum’s Ian Welsh that precompetitive collaboration is the most seamless path forward from Henkel’s perspective. “Alone we will have massive difficulty with transparency,” Conqueret commented. “Bringing [shared learnings] together has allowed us to go much faster, to learn from each other, to have much more knowledge, and to bring transparency up.” 

Outside of the EU, other countries have voluntary frameworks for reporting scope 3 emissions data including the US, Canada, the UK, Japan, Australia, New Zealand, South Korea, Brazil, India and China. Many of these countries use frameworks such as the Greenhouse Gas Protocol and Science Based Targets initiative, however there is no standardised approach for what data to report, nor any legally binding force that requires companies to opt in. 

In the US, the SEC recently approved a new climate disclosure rule that will require companies to disclose scope 3 emissions if they are material, meaning if scope 3 emissions make up a significant portion of a company’s greenhouse gas emissions, or if they have made public commitments to reducing their scope 3 emissions. Company reporting on scope 3 emissions will come into effect in 2027. 

This rule will inevitably require companies to funnel more resources into reporting and disclosure and will open up a new dataset for stakeholders to consider when exploring investment opportunities. This in-depth reporting presents a challenge to companies without experience collecting robust supply chain data. 

The key to overcoming complex supply chain data collection and understanding your scope 3 emissions? According to Henkel, preparation. During the same interview, Conqueret shared that in order to understand your own organisation’s supply chain, you need to understand those of your suppliers. Henkel is working to have full understanding of their supplier’s supply chains by 2027. Conqueret continued that Henkel must “have all [those data points to make an] impact and reach 2030 with effective results when it comes to [reducing] scope 3 emissions.”

How the results of the US election play out will play a part in swaying how the US responds to GHG commitments. Under a conservative administration, the US can expect to see an upswing in deregulation and regulatory rollbacks (particularly in energy production and oil drilling, natural gas extraction and mining) which could include an adaptation in the SEC’s policy. It could also shift control over policy to the states rather than setting standards at the federal level, defund governmental environmental agencies, and invest in infrastructure that does not consider environmental impacts in order to prioritise economic gains. 

Contrarily, a liberal administration would likely see aggressive climate goals and commitment and strengthening regulations like the SEC ruling. It will also see an increased investment in green energy and infrastructure, as well as the US taking a leading role in international climate ambitions and negotiations. 

The world looks to the COP meetings each year as a check-in on the status of the climate around the world. Following COP28 in 2023, there were a few key achievements specifically noted:

Markedly, there were a few key points of criticism of the conference: 

Natasha Bodnar, project director at Innovation Forum, attended COP28 in Dubai and found a similar sentiment among the sessions. “Scientists have praised parts of the agreement but been critical of the vague language around the principal cause of climate change: burning hydrocarbons,” she said. 

The US specifically made several notable commitments during COP28. 

Scaling international climate finance - The US committed $11.4bn in climate finance by the end of 2024 as part of the collective global goal of reaching $100bn to assist developing nations mitigate climate impacts. 

PREPARE initiative - The US is intensifying efforts to support developing countries adapt to climate change including an expanded $50m investment for climate-resilient crops and healthy soils and $6m for the Weather-Ready Pacific Program to enhance early warning systems in vulnerable regions. (PREPARE = President’s Emergency Plan for Adaptation and Resilience.)

Methane mitigation - The US is working to reduce methane emissions by 30% by 2030 through the Global Methane Pledge. It committed to $1bn in new grant funding for methane mitigation projects and initiated specific methane reduction efforts in countries including Indonesia, Vietnam and Nigeria.

Alongside its commitments, the US fell notably short on public expectations, mirroring the feelings of COP28 on a global level. 

Lack of ambition - The US was criticised for not offering new or more ambitious emissions reduction targets; many believe the US should be strengthening its climate goals compared to what was actually promised. Many commitments made at the gathering were perceived as lacking clarity and without binding timelines or plans. 

Unclear fossil fuel timelines - The US did not commit to a concrete timeline for phasing out fossil fuels despite the emphasis placed on this particular ambition from NGOs and developing nations. 

Underfunding the Loss and Damage Fund - This global criticism falls heavily on the US, whose $17.5m pledge to the fund is seen widely as particularly inadequate from a country responsible for such a high level of emissions. 

Methane commitments - While the US played a leading role in the Global Methane Pledge, no binding commitments were made, leading many to perceive this pledge as performative. 

Commitments made at COP28 have significantly impacted businesses over the last year. The commitments to scaling renewable energy, reducing methane emissions, and introducing stricter climate finance regulations have resulted in increased compliance costs.

The focus on tripling renewable energy capacity by 2030 has encouraged businesses to innovate in clean energy technologies such as hydrogen, carbon capture and storage, and low-carbon fuels. Companies are also investing heavily in data collection technologies to measure and report on scope 3 emissions. Advanced digital tools and analytics for tracking carbon emissions are becoming crucial for maintaining transparency and meeting compliance demands.

Additionally, the emphasis on methane mitigation has driven businesses in industries such as agriculture, oil and gas, and waste management to adopt emission-reducing technologies and alternative fuels to align with national commitments. 

Across all of these initiatives, the attention to supply chain transparency continues to grow regardless of industry. There were high expectations where conversations left off at COP28 and where they will be picked back up at COP29. First and foremost, there will be an even greater pressure for governments to make binding commitments with actionable plans to achieve them. The lack of clarity at COP28 broke down trust, and there is an expectation for plans this year to acknowledge a concrete strategy moving forward. 

At the top of the list where the public expect tangible commitments are the phasing out of fossil fuels. This imperative garnered the greatest criticism of COP28 and to many countries is the highest priority when developing emissions reduction goals and targets. To keep expectations grounded, though, Owen Bethell, environmental impact lead for global public affairs at Nestlé, spoke with Innovation Forum live from COP28 and offered a reminder: it’s only been since COP26 in Glasgow that we have publicly debated a fossil fuel phase-out, so those conversations are relatively new still. “Whatever agreement we come to will be quite a big step,” he mentioned prior to the conclusion of COP28. 

Finally, eyes will turn towards developed nations at COP29 for definitive and substantial financial support to assist developing countries with the phasing out of fossil fuels, green innovation and climate impact mitigation. 

The list of ambitions the public hope will result from conversations at COP29 are lengthy, but if leaders can agree on just a few high-impact provisions and provide a specific target, timeline to achieve the target, and concrete commitments to those ambitions, we may find ourselves with a global mobilisation towards true impact as we collectively facedown 2030.

We are returning to Washington D.C. for the Scope 3 Innovation Forum in December 3-4. Click here for information on how to get involved.