Vattenfall, one of Europe’s largest utilities, announced a new climate pledge, committing to slash emissions from its supply chains – such as those from the production of raw materials like steel and concrete – in half by 2030.
The announcement builds on a series of climate commitments unveiled by the company in September including a target, including a goal to reach net zero emissions across its full value chain by 2040, to reduce emissions intensity in the company’s operations by over 77% by 2030 and to reduce absolute emissions from the use of sold products by 33% by 2030.
Anna Borg, Vattenfall’s President and CEO, said:
“With Vattenfall’s target on reducing the climate impact from purchased goods and services with 50% until 2030, our CO2 strategy becomes complete and we send a clear signal that sustainability is our business. We believe that through making climate-smart decisions when we procure and through cooperating with our suppliers, we can both lower our own emissions and push for a wider decarbonization in society.”
According to Vattenfall, the main emission drivers in the company’s supply are derived from the extraction and production of raw materials, such as concrete, steel, and other metals. Transportation in the supply chain also represents a significant share of the emissions.
To investigate the potential of reducing supply chain emissions, the company has been performing projects, including one related to the construction of a hydropower dam in Sweden, where it has developed a concrete with a lower share of cement.
The company has also created incentives for its suppliers to reduce their carbon footprint, including the use of the Environmental Cost Indicator (ECI), which combines a range of environmental impacts of a project and calculates the cost to mitigate, in order to offer suppliers with a high expected reduction in the ECI a discount on their offered price. Applying the ECI to the recently completed construction phase of an onshore wind farm in the Netherlands led to a 25% reduction in GHG emissions.
Kerstin Ahlfont, Vattenfall´s CFO, said:
“With our new ambitious emission target, Vattenfall is expanding and intensifying the work towards decarbonising the supply chain. But the journey towards fossil-free living and a decarbonised supply chain can only be made in cooperation with suppliers and partners. Vattenfall is committed to being an active partner in the transition.”