(Second of two parts)
In the first part of this article, we discussed the costs and impact of climate change, the mounting pressures for carbon reduction, and the increasing demand of investors and regulators for greater transparency on nonfinancial performance through sustainability reporting.
Climate change and sustainability were among the highlights at the 2021 meeting of the World Economic Forum (WEF), a week-long program at the end of January dedicated to help leaders select innovative solutions to address the pandemic and drive recovery. While climate change was already a dominant theme in the WEF in 2020, this year sees the private sector ready to prioritize a low-carbon future in their evolving business models and strategies.
As part of its commitment to sustainability, Ernst & Young Global (EY), of which SGV is the Philippine member firm, recently announced its ambition to be carbon negative by 2021, and net zero in 2025. Becoming carbon negative will result in the reduction of EY’s carbon emissions in line with the 1.5 degrees Celsius Science Based Target (SBT), as well as investing in technologies and nature-based solutions to remove and offset more carbon than EY emits each year. This new ambition builds on the global organization’s achievement of carbon neutrality in December 2020.
KEY ELEMENTS OF THE EY CARBON NEGATIVE AMBITION
There are several key components in the EY ambition to not only become carbon negative, but to also reduce total emissions by 40% and achieve net zero in 2025.
— Reducing business travel emissions. Though many EY services require an element of business travel, air travel provides the most significant negative impact on the environment, accounting for approximately 75% of EY’s global carbon emissions in FY19. These emissions will be reduced by 35% in 2025 using 2019 baseline data by continuing to use remote working technologies that helped EY teams provide uninterrupted client service during the pandemic.
— Reducing overall office electricity usage. EY will reduce its office carbon emissions from electricity consumption to zero by FY25 and by switching to 100% renewable energy for remaining EY needs. By FY25, EY aims to be a fully accredited member of the RE100, a group of influential organizations committed to 100% renewable power. From 2020, EY’s global Scope 3 emissions measurements include employees working from home, reflecting the changes resulting from the pandemic, trends in remote working and the organization’s flexible working schedule.
— Structuring electricity supply contracts. Along with agreed Virtual Power Purchase Agreements (VPPAs) with several solar and wind farms, EY aims to introduce more electricity than it consumes into national grids. These arrangements will add more than twice the amount of electricity consumed into multiple national electricity grids from 100% renewable energy. This allows EY to reduce its total electricity costs, offset its own office electricity emissions, and play its role in decarbonizing the electricity generation sector.
— Providing EY teams with tools to calculate and reduce carbon emitted. EY recognizes that executing client-facing projects results in carbon emissions, and many clients want to work towards reducing them. To this end, EY will provide its teams with tools such as the EY Engagement Carbon Calculator to enable them to assess then reduce the amount of carbon emitted when delivering client work.
— Offsetting more carbon than EY emits through nature-based solutions and carbon-reduction technologies. EY launched a collaboration with profit-for-purpose organization South Pole in December 2020, where contributions from EY will contribute to renewable energy projects (including solar, wind and hydro) and help preserve natural environments.
— Requiring 75% of EY suppliers to set science-based targets. EY will set a goal for suppliers to have a Science Based Targets initiative (SBTi) approved carbon-reduction target by FY25. This involves collaborating with all suppliers to help them achieve SBTi accreditation and decarbonize their products and services, exponentially increasing the impact of EY’s carbon negative position.
— Sustainable solutions for a carbon negative working world. In addition to increasing investments in solutions, EY will continue carrying out activities in various multi-stakeholder sustainability alliances. Such alliances include working on metrics and reporting with the World Economic Forum International Business Council, collaborating with C-suite Sustainability leaders in the S30 group, membership in the Alliance of CEO Climate Leaders, and work with the UN Global Compact and the World Business Council for Sustainable Development.
As EY undertakes efforts to become more sustainable, it is also developing a new set of global sustainability solutions for clients to assist them in their own sustainability journey while protecting and creating long-term value for all stakeholders. In addition, EY will continue to transform its business amid the COVID-19 pandemic and invest in its people by equipping them with the knowledge and skills necessary to lead climate action at work and at home.
As a member firm of EY Global, SGV & Co. will likewise further strengthen its own carbon reduction efforts and sustainability programs to align with the EY carbon negative ambition. More than merely adopting this initiative, the program falls within SGV’s Purpose to nurture transformative leaders capable of reframing the future and helping create long-term value.
The COVID-19 crisis has taught us that providing exceptional client service is still possible despite the challenges it brought. The lessons that we have gained from managing the pandemic will help EY further attain its sustainability ambitions. Many of the practices the EY global firm and SGV have adopted due to COVID-19 will remain relevant to reducing carbon emissions and we will capitalize on these as we define our new normal of doing business.
As the world moves towards an increasingly decarbonized future, it is our hope that more organizations will take up the challenge and join hands to help address the daunting risks posed by climate change.
This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views reflected in this article are the views of the author and do not necessarily reflect the views of SGV, the global EY organization or its member firms.
Clairma T. Mangangey is the Climate Change and Sustainability Services Leader of SGV & Co.