Turning pledges into action is a COP27 key focus, but it’s vital corporate targets are ambitious enough

Bolder, more transparent pledges

Warnings resound as COP27 continues: urgent climate action is needed now, and it’s vital corporate pledges are ambitious enough. We have all seen that corporate net zero pledges have increased rapidly in recent years. However, a challenge persists. Some pledges aren’t comparable because of inconsistent definitions of what “net zero” actually means. For example, the scope of emissions included in targets differs between pledges, as does how deeply and quickly a business must decarbonize before offsetting its residual emissions.

Reaching net zero should not be seen as a ‘competitive advantage’, rather it should be a shared challenge. In reality, no one company can reach net zero in isolation. We will need cross-sector action – for example: changes in mobility infrastructure and a shift to a circular economy. Achieving net zero therefore requires a unified vision of what we’re trying to achieve. Critically, it requires a vision that’s truly ambitious enough to support the Paris Agreement goals to limit global warming.

The Science Based Target initiative (SBTi), a global standard setting organization, set out to create clarity. Throughout 2020 and 2021, Capgemini and many other businesses, academics and non-governmental organizations fed into SBTi’s development of a new standard that establishes clear guidance on when a company can claim to be net zero – and on what is required to get there.

The result was the world’s first framework for setting corporate targets aligned with what scientists say is required to limit global warming to 1.5°C. The Net-Zero Standard is endorsed by NGOs, academics and others, including by CDP, UN Global Compact, the World Resources Institute and WWF.

What the Standard requires

The framework’s requirements are highly ambitious. They require significant collaboration across companies’ entire value chains to achieve the radical transformation needed. Here’s a summary of the key features of the new Standard:

1. 90-95% decarbonization. Organizations are required to reduce carbon emissions by at least 90% across their own operations and value chain. This includes emissions produced by their own processes (scope 1), purchased electricity and heat (scope 2), and emissions generated by suppliers and end-users (scope 3).

2. Near- and long-term targets. The Standard sets two new ways of describing science-based targets: near- and long-term. Near-term targets help spur action for significantly reducing emissions in the short-term (5-15 years), while long-term targets convey the overall destination of a businesses’ decarbonization journey and must be achieved no later than 2050.

3. Carbon removals. These can only to be used when a company has met its long-term reduction target to mitigate for the final 5-10% of emissions – and no claims of net zero can be made until this point.

In addition, SBTi recommends that companies make investments outside their science-based targets to help mitigate climate change elsewhere and increase the likelihood that the global community stays within a 1.5˚C carbon budget. These cannot be a substitute for the rapid and deep reduction of a company’s own value chain emissions.

Doing what science demands

As a company that has been committed to the climate-safe Paris Pathway for many years, we reviewed our net zero targets once the Standard was published, to ensure that we remained aligned with the latest scientific understanding.

We elevated our targets in two main ways. First, we significantly increased the ambition of our original net zero commitment: we increased our target to a 90% reduction in carbon emissions across scopes 1, 2 and 3 by 2040 (compared to a 2019 baseline), before we’ll neutralize the final 10% of residual emissions through high-quality carbon removal solutions to bring us to net zero. This updated target commits us to eliminate most of our carbon footprint.

Second, we quickened the pace of our decarbonization by raising the ambition of some of our near-term 2030 goals. In addition, by revising the baselines of our near-term goals from 2015 to 2019, this has increased our ambition further. SBTi validated our targets as aligned with its Standard in July 2022.

Recognizing the urgency to achieve global net zero emissions, we are also taking action beyond the decarbonization of our own operations to keep global average temperature increases below 1.5 °C by investing in carbon avoidance and removal solutions (including high quality carbon credits). Our investment will be aligned to our own footprint, neutralizing our operational carbon emissions by 2025 and our supply chain emissions by 2030.

Turning commitment to actions

Achieving a 90% carbon reduction means radical changes across our business, requiring us to look beyond efficiencies and implement a complete shift in how we operate. Capgemini was one of the first businesses in our sector to set SBTi-validated targets. Our first targets set in 2016 were reached by January 2020, ten years earlier than targeted and ahead of COVID lockdowns. Since then, we’ve rolled out our ten-point global transition plan, which guides our action.

As a technology company, we’ll keep taking a lead on the issues relevant to our sector. Our dedicated sustainable IT steering group continues work to improve the efficiency of our IT devices, enable lower carbon delivery, and minimize electronic waste.

Our global real estate team is reducing the environmental impact of our offices and data centers. For example, we recently launched our Energy Command Center (ECC). The ECC uses digitalization alongside data collection and prediction to manage energy performance across our campuses in India. It’s already reduced energy consumption by an estimated 20%, and offers a model for improved energy management for use more widely across our offices. We also remain committed to switching to 100% renewable electricity globally by 2025.

As a company present in over 50 countries, travel consistently comprises a large share of Capgemini’s carbon footprint. At the heart of our approach to reduce travel impacts is ensuring that the first question we ask is “do we need to travel?” and, if so, how can we make smarter travel choices? We are also reducing emissions from our employee commuting and business travel. This includes transitioning our global 12,000-car company fleet to electric vehicles by 2030.

Sustainable businesses need sustainable supply chains. We’re working with our suppliers to make their activities more sustainable. We’ve proactively engaged with our top 100 suppliers globally (accounting for around 50% of all our supply chain emissions) and have started developing approaches to systematically embed sustainability into vendor selection.

Finally, we recognize that the biggest impact we can have is through working with clients to manage their sustainability challenges and we continue to work to ensure we help clients in their low carbon transition.

COP27 and beyond

As the world meets for the 27^th UN climate conference, COP27, calls for strengthened pledges and faster action remain top of mind. Examples include the Alliance of CEO Climate Leaders call for the private sector to strengthen net zero approaches by setting meaningful science-based targets, and the UN’s High-Level Expert Group’s recent recommendations for non-state entities’ net zero targets. I welcome this focus – as it is only by setting net zero targets that prioritize deep decarbonization at pace, that we will be able to realize anything like the Paris Agreement.