Today, almost two-thirds of the UK’s largest businesses have pledged to reach Net Zero by 2050 and 87 companies have signed up to the BRC Roadmap to reach net zero by 2040.
The challenge is now creating and implementing action plans to achieve success.
Research shows that only 29% of UK businesses have a strategy for reaching Net Zero, with 42% of businesses feeling overwhelmed by the steps they need to take to reach that goal.
In this webinar, Mark Reynolds of the Carbon Trust joins Nicki Hunt to share actionable steps to advance on your journey to Net Zero.
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REACHING NET ZERO BY 2040 - WRITE-UP
Retail has a collective target of reaching net zero by 2050, with some retailers taking the additional step of pledging to reach net zero by 2040. However, some retailers are further ahead in that journey than others, with many UK companies still reporting a lack of confidence around setting and delivering sustainability targets.
In this webinar, we were joined by the Carbon Trust to share strategies for measuring your carbon emissions, setting science-based targets, tracking progress and identifying potential challenges.
Net zero developments in the retail sector
Retailers recently reaffirmed their pledge to halve carbon emissions by 2030, with an increased focus on addressing Scope 3 emissions – this has been supported by a new set of guidelines from the International Organisation for Standardisation ahead of COP27.
We’re now hearing of specific retailers taking steps to reduce emissions along the supply chain, such as Arla incentivising low-emission milk production, or Coca-Cola introducing sustainability-linked finance packages for suppliers.
However, while these positive changes are being made, Scope 3 decarbonisation continues to be a significant challenge for retailers – in the full webinar, discover the challenges other retailers are experiencing, as well as step-by-step guidance for reducing Scope 3 emissions.
1. Measuring your climate footprint
Retail’s scope 3 emissions account for nearly half of global sector emissions, with competition between brands to get products to market having significant implications on the sustainability of the value chain. Two key areas of focus for retailers measuring their carbon footprint are the products and services sold, and the use of sold products after they leave the shelves. That means paying particular attention to the supply chain of your products, and extending their lifecycle post-sale.
Food and drink, in particular, comprise 18% of the UK’s total emissions, and has been identified as a particular area of interest when reducing carbon emissions; the UKCCC has recommended emissions from agriculture be reduced by 20% between 2019 and 2035, proposing strategies such as a 20% reduction in animal product consumption, transforming agricultural land into restored woodland and peatland, and reducing food waste.
There are signs from changing consumer behaviours that customers are willing to change their behaviour to support these targets, but the rest of the responsibility lies in the willingness of stakeholders throughout your supply chain to engage with these necessary measures.
In a key case study, the Carbon Trust highlight the methods they used to reduce Carlsberg’s carbon emissions – find out more in the full webinar.
2. Setting climate targets
Climate targets are also known as science-based targets. These targets are largely based around government guidance to limit global temperature increases to 1.5C, which requires a 4.2% annual reduction in carbon emissions to achieve by 2050. While long-term strategies should be in place to achieve this, businesses need a range of long and short-term science-based targets to propel a downward trend of carbon emissions forward.
While there is an option to target a lower annual emissions decrease for Scope 3 (with “well below 2C” targets requiring a 2.5% annual reduction), this option is not available for Scope 1 and 2 – and, if your business is on the roadmap to net zero by 2040, it’s likely that targets will be higher.
As well as setting science-based targets for your business, if over 20% of your emissions are sources from one of the following scopes, such as retailing, tourism, textiles and more – find the list in the full webinar – you are required to set FLAG (forest, land and agriculture) targets.
3. Driving reductions
Progress to date
Currently, retail is making strong progress for carbon reduction in these areas:
- Food waste
- Scope 2 reductions
- Own-operations and logistics reductions
However, in other areas, there is more to be done, such as:
- Reporting on Scope 3 reductions
- Engaging with suppliers
- Collecting primary supplier data
With more legislation upcoming, such as Net Zero transition plans, pressure is mounting on companies to assess, reduce and report on Scope 3 reductions.
Retailers need to work directly with their suppliers to reduce upstream emissions, whether this is by effectively baselining their carbon emissions, codifying their sustainability strategies in contracts with suppliers, or opening effective long-term communication for collecting primary data. To learn strategies to begin accomplishing this, or to discover how the Carbon Trust supports UK retailers to do this, watch the full webinar.
Current Net Zero Challenges for Retailers
The SBTI has identified 3 main challenges on the journey to net zero:
- Baselining Scope 3 emissions
- Setting science-based targets
- Delivering progress towards Scope 3 science-based targets
Curious to know what our live attendees identified as their biggest challenge? Find out in the full recording.
1. Baselining Scope 3 emissions
One of the key challenges when baselining Scope 3 emissions is that many calculations are based on secondary data from suppliers – what is truly needed is engagement from key stakeholders to provide primary data.
In addition to this, re-baselining should be done every five years, or if there is a significant change in your business (such as a methodology change, for example). 70% of UK companies have re-baselined in the past 5 years.
The more you can work directly with suppliers and improve the quality of your Scope 3 data, the more certainty you can have about the effectiveness of your strategy.
2. Target setting
A primary barrier identified for setting science-based targets is a lack of confidence in being able to deliver them, with concerns around the consequences of failure. As well as this, targets are constantly shifting along with re-baselining and changes in methodology.
3. Implementing reductions
Over 50% of respondents self-reported that they are not on track to hit their Scope 3 targets, with 81% saying it is due to a limited influence over their supply chain, and a further 61% highlighting cost as a key barrier for carbon reduction.
At the heart of all of this is the lack of primary data from key stakeholders, leading to poor data quality – not only does this impact how effectively you set your initial science-based targets, but also how you track your progress over time.
If your business is looking for ongoing support and collective, practical solutions to some of these dilemmas on the journey to net zero, learn more about becoming a Climate Action Roadmap signatory.
Communicating climate progress
With new concepts such as greenwashing and “greenhushing” floating around, it becomes more of a challenge to communicate progress on carbon reduction.
Of the over 60% of large UK corporations setting net zero targets, only 35% are collecting data on annual progress, and many of these net zero targets do not include Scope 3 – this leads to a lack of credibility around net zero targets.
In addition to this, only one third of these companies collected their baseline Scope 3 emissions, and even fewer plan to continue doing this regularly.
As well as greenwashing, a term that has been spreading through the media in recent months, there is the new phenomenon, “greenhushing” – deliberately underreporting on certain sustainability practices. In fact, a 2022 report found that over 1,200 companies positioning themselves as global climate leaders did not publicise their eco achievements.
To learn more about the steps you can take to baseline effectively, set achievable science-based targets, and communicate your progress, watch the full webinar or reach out directly to the Carbon Trust.
The importance of harnessing primary Scope 3 data to inform your baselines, science-based targets and success metrics has never been clearer, but even some of the industry leaders in carbon reduction struggle with this. What this means for you is that no matter where you sit in your net zero journey, you are not alone in the struggles you face – together, companies in similar positions can work together on collaborative solutions to propel forward retail’s progress in carbon reduction through the Climate Action Roadmap.
If your company lacks confidence in the steps they can take to obtain primary Scope 3 data, baseline emissions and create achievable science-based targets, reach out to the Carbon Trust to find out how they have helped other retailers achieve their climate goals.