2015 was an important milestone in the fight against climate change. In November of that year, the 21st United Nations Climate Change Conference (COP 21) brought 196 countries together in Paris to formulate a plan to reduce global greenhouse gas (GHG) emissions and limit the increase in global average temperatures. A legally binding target was agreed to restrict global warming to well below 2°C above pre-industrial levels, with a preference for only 1.5°C of warming (discover why these specific temperature limits are so important).
This landmark treaty would become known as the Paris Agreement. And while the world's governments continue to pursue measures to reach the goals it set out, wider society also has a key role to play in the fight to “keep 1.5 °C alive”. The business community in particular – and especially large, traditionally emissions-intensive companies – is being called upon to help prevent the worst effects of climate change.
This will require significant shifts across many sectors, and the transition to a low-carbon economy will take time. But while progress may be incremental, it has never been more important for individual companies like Stahl to provide a clear, science-based pathway to reduce their GHG emissions in line with the goals of the Paris Agreement.
2015 was a turning point in Stahl’s own climate ambitions, as we began a comprehensive review of our GHG emissions reduction strategy. Our priority was ensuring that we set robust targets that were ambitious enough to meet the goals of the Paris Agreement, as well as being realistic, achievable, and aligned with the latest research.
One of the cornerstones of any company’s science-based emissions reduction targets is categorizing its GHG emissions according to the “scopes” as defined by the Greenhouse Gas Protocol. This impact reporting organization provides the world’s most widely used GHG accounting standards (see below).
The GHG Protocol separates emissions into the following three categories:
Scope 1 – “Direct emissions”: Emissions caused by the combustion of fuel in facilities and assets owned by the reporting company, such as factories, turbines, and owned vehicles.
Scope 2 – “Bought energy”: Emissions caused by the third-party production of electricity, steam, heating, and cooling bought by the reporting company.
Scope 3 – “Value-chain emissions”: Emissions caused by the upstream and downstream activities necessary to the operations of the reporting company. These include, for example, raw material sourcing, logistics and product disposal or recycling. These impacts typically account for about 70% of an organization’s overall emissions . These emissions are divided into 15 distinct categories that span the entire product lifecycle, from purchased goods and services to capital goods, transportation and distribution, and the end-of-life treatment of sold products. Stahl’s Category 1 emissions (purchased goods and services) are the most significant by a clear margin, accounting for over 90% of overall Scope 3 emissions in 2021.
In 2016, using our 2015 emissions as a baseline, Stahl communicated its first long-term emissions reduction target – in line with the Paris Agreement – to reduce our CO2 emissions by 10% by 2020. In the end, we exceeded our own target, achieving an absolute emissions reduction of 37% in 2020 compared to 2015. This was thanks to our investments in clean energy and energy efficiency at all our sites.
Because of the complexity of calculating Scope 3 (wider value chain) emissions, Stahl’s initial target focused mainly on Scope 1 and 2 emissions. These relate primarily to the energy used by our manufacturing sites as well as electricity purchased from the grid. At this stage, only a small proportion of Stahl’s Scope 3 emissions was included, relating to business travel by air and private cars used for business purposes by Stahl colleagues.
However, efforts to calculate our Scope 3 emissions were already taking shape in the background. As this Scope covers indirect emissions that lie outside our immediate sphere of influence, the calculation is a more complex process.
As mentioned above, Scope 3 is comprised of 15 different categories of emissions. Over time, we were able to gather more and more information across these different categories – allowing us to build an increasingly sophisticated and comprehensive picture of our Scope 3 GHG footprint.
In 2022, Stahl began reviewing and reassessing all 15 categories for Scope 3 emissions with the help of an external consultant. This comprehensive review provided a solid base for Stahl to set its first near-term target for reducing Scope 3 emissions, in line with the SBTi’s criteria.
The result of this research was Stahl’s first Scope 3 target, which was submitted to the Science Based Targets initiative (SBTi) in July 2022. The target focused on the reduction of our Category 1 emissions – purchased goods and services – which account for the majority of Stahl’s total Scope 3 emissions. In March 2023, our targets for Scopes 1, 2 and 3 were validated by SBTi.
In addition to carbon dioxide (CO2), a company’s GHG emissions may also include other greenhouse gases such as methane, nitrous oxide, and fluorinated gases. To simplify the accounting and reporting processes, Stahl reports all these emissions in terms of carbon dioxide equivalents (CO2e), regardless of the exact chemical makeup of the emissions. This approach follows the guidelines of the GHG Protocol. More information on the different types of greenhouse gases and their relative contributions to climate change can be found here. You can find out more about the GHG Protocol here.
As we took steps to strengthen our Scope 3 accounting and reporting, another important project began taking shape. In early 2022, Stahl again reviewed the methods we use to calculate and report on our Scope 1 and 2 inventory. This was a lengthy but essential process to prepare our emissions calculations and targets for submission to the Science Based Targets initiative (SBTi – see below).
The Science Based Targest initiative (SBTi) is a partnership between CDP, the United Nations Global Compact, World Resources Institute (WRI), and the World Wide Fund for Nature (WWF). Its goal is to mobilize companies to set science-based targets to support the transition to a low-carbon economy.
The initiative defines and promotes best practices in science-based target setting and offers resources and guidance to reduce barriers to adoption. It also independently assesses and approves companies’ targets. Since 2015, nearly 5,000 companies worldwide have joined the initiative to set a science-based emissions reduction target.
One of the requirements to secure validation from the SBTi is for organizations to include as many of their business locations in their target setting as possible. In Stahl’s case, we needed to estimate the emissions generated by our offices, application laboratories, home offices, and other non-manufacturing sites, as part of Scope 1 and 2 calculations.
In addition, our SBTi submission required further detail on our environmental footprint. This included the direct CO2 emissions generated by land-use change and removals associated with bioenergy feedstocks. This is an important consideration. Biogenic energy sources such as paper, grass trimmings, and other biofuels, can be a useful addition to a company’s energy mix. However, they still generate emissions that contribute to global warming, even though they may be less harmful to the environment than fossil-based energy sources such as oil, gas, and coal.
After enhancing our emissions reporting across our Scope 1, 2, and 3 emissions inventories with the help of our external partner, Stahl was ready to submit our GHG emissions reduction targets to the SBTi in July 2022.
These targets require Stahl to:
In late March 2023, the SBTi notified Stahl that our Scope 1, 2, and 3 GHG emissions reduction targets had been validated. This confirms that our targets meet all the criteria required to be approved as science-based, in line with the Paris Agreement goals to limit global temperature rises to between 1.5 °C and 2 °C. (The SBTi determined that Stahl’s Scope 1 and 2 target ambition is in line with a 1.5°C trajectory, while Stahl’s Scope 3 target has been validated in line with the well-below 2°C pathway.)
The validation puts Stahl in good company. We are one of the few coatings providers to have received this recognition from the SBTi. To date, 145 companies in the chemicals sector have submitted an emissions reduction target to the SBTi, of which 61 have had their targets approved.
But our journey with the SBTi doesn’t end here. In early 2023, Stahl completed the acquisition of ICP Industrial Solutions Group (ISG), a leader in high-performance coatings for packaging and labeling applications. The agreement significantly increases the scale of our operations.
This means we will need to recalculate our baseline – the level from which we start reducing our GHG emissions – accordingly. Meanwhile, our target is always in motion: the SBTi requires companies to update the baseline year for their targets every five years. Therefore, our ESG team and the parts of Stahl’s business responsible for specific targets must work together to oversee data collection.
We will also be enriching our emissions data wherever possible. For example, in 2023 we will begin collecting primary energy data for our larger non-manufacturing facilities, such as our sites in Turkey.
Setting robust, science-based (independently validated) targets is a crucial starting point for any organization looking to achieve its climate ambitions. But targets are just a means to an end – success will be determined based on whether Stahl manages to meet the goals we have set for ourselves.
To ensure this, we need to hold ourselves to account. Our Environmental, Social, and Governance (ESG) Roadmap to 2030, establishes a mechanism to track and report on our progress against our targets over the coming years. The Roadmap also includes specific metrics and action points on the route to meeting our goals – such as installing additional on-site renewable energy sources at our manufacturing locations.
Continue reading part two of our blog, where we explore in detail the different steps Stahl is taking to reduce its GHG emissions.