The pathway to decoupling emissions from revenueCDP
Longstanding business concerns over the negative impact on revenue growth from controlling runaway emissions now have a growing number of proven pathways to success, the latest report from CDP in partnership with We Mean Business shows.
CDP’s extensive analysis of over 1,000 companies highlights a core group of 62 companies that have achieved the elusive goal of delivering impressive and reliable revenue growth, while reducing greenhouse gas (GHG) emissions.
Over a five-year period, the revenues of the businesses that managed decoupling grew by an average of 29% and their emissions fell by 26% overall; in contrast with those companies not achieving decoupling that saw revenue decline by 6% on average, while their GHG emissions grew by 6%.
One such company, UK retailer J Sainsbury Plc, reduced its emissions by 22% while increasing revenue by 18% over five years; achieving a 28% drop in emissions intensity. During that period, the company introduced low-carbon energy technology at stores and depots, as well as liquid natural gas and liquid bio-methane in its dual-fuel vehicle fleet.
While Indian IT company Wipro, saw revenue growth of 15% over the five-year period alongside a 24% drop in emissions, with overall emissions intensity falling by 33%. The company introduced server virtualization technologies and a number of building services energy conservation measures.
Almost a quarter (23%) of the successfully decoupled businesses are in the financial services industry, a sector that has certain key advantages in terms of achieving business growth without increasing its direct energy needs. However, the list also includes a number of companies from the most energy-intensive, highest emitting sectors, for whom decoupling requires a definite shift in operational practices.
Taking a broader look at the total sample in CDP’s report, 94 have publicly committed to science-based greenhouse gas reduction targets via the Science Based Targets Initiative. If these companies are to achieve their current targets, they could realise 1Gt CO2e of reductions by 2030 below current emission levels, which is about one quarter of the 4Gt CO2e of reductions below current levels that the group of companies would need to achieve to be in line with a 2°C-compatible pathway.
The CDP report, which is the first in an annual series, establishes the baseline for corporate action on climate change, and future reports will track progress being made to implement the Paris Agreement.