Guidance for manufacturers, heavy industry, and their suppliers on how to take ambitious climate action.
Climate change is the next big challenge facing your business. It's a big task – but the good news is that your actions today will have an impact on your business from now until 2030, and beyond. You can turn this challenge into a huge opportunity.
Using publicly available data, we analysed key challenges for the manufacturing sector around sustainability and climate change.
Read about the key climate change challenges and opportunities for manufacturers and industrials.
Self-assessment to understand your sustainability performance against industry players and receive tailored recommendations to achieve your climate goals.
We help companies realise their renewable energy ambition, advising on the best mix of solutions to increase impact while saving on costs.
Read more about each step of your Climate Journey.
Climate-related risks are expected to grow as the planet continues to warm. For your production sites, physical climate risks can pose a very real threat. Low-lying coastal regions may be prone to flooding and land loss while other areas may be more vulnerable to drought and wildfire. Physical risks could impact your access to raw materials for production or increase the costs of acquiring these. Analysing these risks and identifying hotspots will help you future-proof your business and make a business case for your investors. In addition, TCFD-aligned disclosures may become mandatory in your region, and prices on carbon will most likely grow over time, which, along with changing regulations, can pose a so-called 'transition risk' that you may be unprepared for. But there aren't just risks, the transition also brings opportunities. Changing the product mix can attract more sustainability-conscious consumers and more energy- efficient and circular manufacturing methods save costs and foster innovation.
Understanding your carbon footprint is the first step towards taking climate action.
The analysis should include your operational emissions, such as company fleets and energy supply, but also emissions related to your upstream and downstream activities. Calculating your CO2 footprint will enable you to identify the key drivers of your emissions – and the 'hotspots' with the biggest reduction potential for the lowest cost.
In 2021, the Science-Based Targets initiative (SBTi) published its corporate net zero standard, aligning the global community around a shared definition and clear requirements for what a company must do to reach net zero. As a result, net zero has become the ultimate corporate climate commitment. Following the SBTi net zero standard allows you to make a commitment that can withstand stakeholder scrutiny and gives you clear guidance on how to achieve it. Around 7% of manufacturers have set a net zero target as of April 2022 (Data is based on South Pole research within a data pool of about 6,000 companies).
The Intergovernmental Panel on Climate Change (IPCC) defines net zero as a state where there is no incremental addition of GHGs to the atmosphere. This means all avoidable emissions have been reduced and residual emissions are to be removed from the atmosphere.
According to the SBTi, a company has achieved net zero when all direct and indirect emissions have been reduced by an average of 90% across industries from 2020 levels, with any remaining emissions neutralised by permanently removing carbon from the atmosphere by no later than 2050.
Once you have conducted a feasibility analysis and defined your target, you need to plan the concrete steps for getting there. Your net zero roadmap must be built around an emissions reduction plan (see next step of the journey) and clearly demonstrate how you will reduce emissions across all your emission 'scopes' – both direct and indirect emissions – in the near- and long-term.
These milestones should be science-based, which means that they need to be consistent with limiting global temperature rise to 1.5°C. That means planning near-term targets to drive significant emission reductions within the next five to ten years. At South Pole, our experts can answer any questions about credible corporate commitments and help your organisation develop a clear net zero roadmap.
The manufacturing sector usually focuses on addressing scope 1 emissions and purchased energy consumption, from energy-guzzling production sites and cooling systems to energy-intensive transportation modes. These processes can be powered by renewable energy. Procuring or even producing renewable energy on-site offers many advantages for companies: it allows them to reduce emissions quickly, reduce costs and hedge against rising electricity prices in an increasingly volatile market.
South Pole assisted a global telco with evaluating, sourcing, and negotiating a cost-effective power purchase agreement (PPA) for one of its most renowned subsidiaries.
Global manufacturing companies need to engage their suppliers in order to achieve their climate targets.
To future proof your business and be in line with internationally recognised initiatives such as the SBTi, you should have a strategy for the emissions within your supply chain, i.e. your scope 3 emissions.
Manufacturing often uses intermediate products, which means you're likely to work with a lot of suppliers. Consequently, the largest part of your emissions may lie in scope 3. How should you address these indirect emissions? One effective plan of action is to start " RE-Powering your supply chain" by accelerating your suppliers' transition to renewable electricity. This will be a global effort that fosters collaboration and long-term relationships with your suppliers.
Circular systems minimise resource inputs – keeping products, equipment, and infrastructure in service longer – while reducing waste, the need for raw materials, and carbon emissions. In other words, circularity isn't just good for the planet, it's good for business too.
However, transitioning to circular systems can be a challenge. Our team will work closely with you to develop long-term and integrated strategies. These could include mitigating for plastic that is being produced by building certified plastic reduction projects into the supply chain, identifying manufacturing waste from operations that can be reduced, and building value chain-wide guidelines for the adoption of sustainable materials.
Net zero can't be achieved overnight. Given the urgency of the climate crisis, the corporate net zero standard also encourages businesses to invest in emission reductions beyond their value chains starting today. So, while you work to reduce your emissions, you can address remaining emissions by investing in high-quality carbon credits that finance climate action projects that avoid or remove emissions from the atmosphere.
South Pole has developed a range of projects addressing emissions stemming from the manufacturing industry worldwide. Supporting projects that accelerate the transition to renewable energy or improve energy efficiency in emerging economies, for example, allows your organisation to create a positive change in your sector.
Electricity production that is heavily dependent on fossil fuels remains one of the primary contributors of global warming. Channelling finance to the expansion of renewable energy infrastructure is key to achieving net zero by 2050. By supporting renewable energy climate action projects, like this one which brings clean energy to a dazzling island nation or this pivotal project to accelerate solar use in Latin America, your company can compensate for its emissions while helping drive towards a global low-carbon economy. Explore a selection of our renewable energy projects here.
Carbon credits are measurable, verifiable emission reductions from third-party certified climate action projects. These projects reduce, remove, or avoid GHG emissions. But they also bring a whole host of other co-benefits aligned to the UN's Sustainable Development Goals: empowering communities, protecting ecosystems and reducing reliance on fossil fuels, among others. With the largest availability of projects in the world, our experts can help you design a portfolio to suit a range of budgets and needs.
Chat to our experts who can guide you through the selection process.
As stakeholder awareness of the impacts of manufacturing on the global climate grows, companies are scrambling to disclose their climate impacts to investors and prove their climate ambition to customers, employees and suppliers.
Loosely communicated climate action, however, can pose a serious reputational risk. To avoid accusations of greenwashing, companies must disclose transparently and make credible claims that resonate with their stakeholders. We can advise clients on best-in-class climate communications.
