Measure, Manage, Mitigate: A Three-Step Solution for Corporate Climate Action

While the human and environmental costs of climate change play out before our eyes — from a devastating wildfire season on the U.S. West Coast to severe storms brewing in the Atlantic — an alarming new report makes the future economic costs all the more clear. If climate change goes unchecked in a business-as-usual scenario, global GDP growth will fall by 10 percent by 2050, and the mean damage costs of climate change will reach $5.4 trillion annually by 2070. But if global temperature rise is capped at 2 degrees Celsius in alignment with the Paris climate agreement, GDP growth rates will remain unchanged and annual damage costs will fall by more than $3 trillion, according to research from CDP and University College London. 

Meeting the goals of the Paris agreement to prevent the worst impacts of climate change will require the work of both the public and private sectors. To date, nearly 1,000 companies are taking some science-based action. Among them, 467 companies have joined the Science-Based Target Initiative (SBTi), certifying their goals as being in line with the Paris agreement, a crucial first step to ensure that targets are measurable and effective. 

Going beyond direct emissions is crucial to tackle climate change

To make a real impact on mitigating climate change, companies must look beyond their operations and purchased electricity and begin to analyze their supply chain emissions, say groups such as SBTi. Scope 3 emissions refer to indirect upstream and downstream emissions that occur in the corporate value chain, excluding indirect emissions associated with power generation (Scope 2) and direct operational emissions (Scope 1). Setting a science-based Scope 3 target enables a company to identify where its biggest emissions originate and how best to tackle them. 

According to the CDP, the organization that tracks corporate action on climate and other environmental indicators, supply chain emissions are 5.5 times more than a company’s direct emissions. That means addressing those can go a long way to tackling overall emissions.

Different sectors in the Scope 3 sights

Every target will need to be based on the needs of each company. A thorough life cycle analysis (LCA) is a necessary first step to determine where in the supply chain is the greatest impact. Many companies are still in the early stages of developing science-based Scope 3 targets, but more and more are in the process.

For example, PepsiCo is one of a handful of beverage companies that report and set a target to reduce Scope 3 emissions by 20 percent by 2030, using a 2015 baseline. The target includes initiatives that address emissions by the farmers from which the company sources ingredients, as well as packaging, distribution and retail. In the retail sector, Target also has a science-based goal on the books, aiming to reduce Scope 3 emissions by 30 percent below 2017 levels by 2030, mainly through partnerships with suppliers of the goods that fill its shelves. 

As illustrated by these examples, the way a company achieves its Scope 3 target is largely determined by industry. For a company such as Kimberly-Clark that produces personal hygiene products, a significant component of the LCA will focus on forests, which are an essential part of the climate solution overall. 

Forests stabilize the global economy and must be managed sustainably to prevent further climate degradation — and they are both a cause of, and a solution for, greenhouse gas emissions: About 25 percent of global emissions come from land use, the second largest source after energy. 

But forests are also a solution. About a third of the emissions released from burning fossil fuels is absorbed every year by forests. Nearly 2 billion hectares of land across the globe has been degraded, equivalent to the land mass of the entire continent of South America. Opportunities exist to restore those lands, and paper companies can make a significant impact. 

Kimberly-Clark targets forest impacts as part of its Scope 3 goals 

Kimberly-Clark, maker of products including Cottonelle and Scott brand bath tissue, is working to account for forest-related emissions as part of its work in Scope 3. Though forest carbon and land use emissions are not yet part of the company's Scope 3 goal, which calls for a 20 percent reduction in value chain emissions by 2030, it intends to augment the target to include forest- and land-related emissions once its LCA is complete, David Chaffin, global responsible materials sourcing lead for Kimberly-Clark, told TriplePundit. 

Significantly, the company intends to directly address impacts by factoring in the forest carbon footprint in its supply chain rather than simply buying offsets, as evidenced by Kimberly-Clark’s existing goal of a 50 percent reduction in natural (Northern) forest fiber by 2025. By addressing how it sources raw materials from boreal and other high-carbon value forests, its target and future intentions carry more weight. 

In addition to being science-based, Scope 3 emissions targets are more effective if done in coordination with external stakeholders — from affected Indigenous communities to NGOs pushing for more stringent targets. Kimberly-Clark has both formal and informal relationships with Greenpeace and the World Wildlife Fund, for example. Acknowledging that fiber sourcing directly impacts forest-dependent communities — many of them Indigenous communities that will be disproportionately affected by climate change and biodiversity loss — the company also aims to work with partners to explore how it can better support these communities’ rights and well-being, Chaffin said. 

“Relationships are critical to ensure our targets are as ambitious as they can be and as scientifically credible and effective as they can be,” he told us. 

For Chaffin, this work is not only essential, but also personal. Spending his formative years visiting the Boundary Waters boreal forest of northern Minnesota left a lasting impact, leading to a career in forest ecology and conservation. He views Kimberly-Clark’s commitment to addressing its climate impacts on forests as a critical component of advancing science and understanding of forests as they relate to climate mitigation. 

“Forests have always been a major part of my personal life,” Chaffin said. “There’s no place I’d rather be than on a lake in a boreal forest. A lot of the work I’m doing is about how to reduce the impact on those ecosystems in particular.” 

Using the latest science and a sophisticated LCA, he believes the company will break new ground. By creating methodologies specific to biogenic carbon science — in other words, analyzing the carbon stored in trees and the carbon paper products re-release into the atmosphere at end of life — “we can get as complete a picture as possible with different fiber and forest types,” he explained. The company’s LCA will run for six to eight months, and the results will inform a baseline for its forest target in early 2021. 

Such knowledge could serve to prove the critical role forests need to play over the next 10 years as part of the decarbonization of the global economy. Scope 1 and 2 emissions were the necessary first steps toward addressing corporate emissions. Scope 3 is where the rubber really hits the road.

This article series is sponsored by Kimberly-Clark and produced by the TriplePundit editorial team.

Image credit: Geran de Klerk/Unsplash