Global warming has become the great challenge of the 21st century. Caused mainly by greenhouse gas emissions, it is causing dangerous and widespread disruptions to nature and affecting the lives of billions of people around the world, despite efforts to reduce the risks.
The effects of global warming are now a reality that we must all face together.
Addressing climate change requires greater awareness of climate risk by business leaders, support from regulators, investors and other stakeholders to ensure that businesses are managed in a way that allows them to remain profitable during the transition.
What is the Paris Agreement commitment on global warming?
The Paris Agreement is a landmark agreement to combat climate change and to accelerate and intensify the actions and investments needed for a sustainable low-carbon future.
The central objective of the Paris Agreement is to strengthen the global response to the threat of climate change by keeping the global temperature increase this century well below 2 degrees Celsius above pre-industrial levels, and to continue efforts to further limit the temperature increase to 1.5 degrees Celsius.
According to WWF, that half a degree difference in the average global temperature has devastating consequences.
Achieving the climate goals of the Paris Agreement requires companies to align their greenhouse gas emission reductions with this goal.
Why is it important for Spanish and European companies?
According to the European Council, the future of Europe depends on the health of the planet. This is why 2018 saw the launch of the European Green Pact, through which the EU Member States have committed themselves to achieving climate neutrality. (net zero) emissions by 2050 and thus fulfil the Paris Agreements. The European Green Pact is the basis for the transformation of the EU into an equitable and prosperous society with a modern and competitive economy.
In order to achieve net zero, companies need to establish new strategies to achieve so-called “decarbonisation”, which is nothing more than the process of reducing greenhouse gas (GHG) emissions.
Greenhouse gas emissions of organisations are divided into direct and indirect.
- Scope 1 emissions correspond to emissions that are directly produced by the organisation, e.g. heating or emissions from company vehicles.
- The second scope deals with indirect emissions and those related to energy consumption.
- Finally, Scope 3 corresponds to indirect emissions transferred to the company through its value chain, i.e. customers and suppliers.
For companies, adaptation is very important to be able to manage decarbonisation and comply with regulations. This adaptation and transformation to the new zero-emission economy means that they seize opportunities and can emerge stronger while avoiding risks. Depending on the organisation and sector, the roadmap for achieving decarbonisation will vary.
How companies are taking advantage of the decarbonisation process
With so many challenges in our path due to climate change, decarbonisation has several benefits for businesses.
Reputation. The image projected by a company that is committed to sustainability improves customer loyalty and facilitates supplier relations.
Investors. ESG (environmental, social and governance) factors are fundamental to investment decision-making. A robust system of carbon accounting in business operations enhances corporate reputation and signals to investors that a company is compliant and proactively preparing for a greener future. These companies are often seen as less risky and more forward-looking and provide an opportunity to attract responsible investors.
Competitive advantage. Sustainability has become a differentiating factor in the marketplace, but it will soon cease to be so. Getting a head start on reducing your environmental impact, as well as being socially responsible, can give you a competitive advantage over your competitors.
Avoiding the risks of non-compliance. Failure to comply with incoming environmental regulations to combat climate change can lead to penalties as well as reputational damage. On the other hand, non-compliant companies may face increased scrutiny from regulators and the market itself, which can lead to disruptions in their operations, loss of confidence and loss of customers.
How does Gesvalt help in the decarbonisation of companies?
At Gesvalt we have different lines of support for companies in decarbonisation:
- We offer Carbon Footprint calculation and verification services in Scope 1, 2 and 3.
- We design medium- and long-term decarbonisation strategies in a way that is sustainable for the company.
- We analyse the carbon footprint of real estate portfolios.
- We define action plans to tackle climate change.
- We provide climate risk modelling services (mitigation and adaptation) for real estate intensive companies.
- We carry out ESG (EINF, Materiality, CSRD) and Taxonomy reports that allow us to obtain better financing conditions.
- We apply the general approach of Life Cycle Assessment, and based on an initial diagnosis, we propose corrective measures to reduce the carbon footprint, water footprint and environmental footprint. Both in activities and products. We recommend that the process of decarbonisation is approached along four main lines.