FMCG firms not hitting Scope 3 targets
GREEN-LEANING financial think tank Planet Tracker has carried out research suggesting that Unilever, Colgate-Palmolive and Procter & Gamble are struggling with climate transition plans.
Planet Tracker has released analysis of three leading consumer goods companies with a combined market cap of USD 538 billion, to help investors compare company climate transition plans and identify best practices for alignment with 1.5ºC by 2030.
Using a robust proprietary assessment framework aligning with most available frameworks and disclosures including CDP, Planet Tracker reveals a systematic failure to tackle upstream Scope 3 emissions effectively, which puts Colgate-Palmolive and Procter & Gamble on a +3 deg C pathway with expected emissions 7 times higher than recommended level set by the Science-Based Targets initiative (SBTi) by 2030.
The report demonstrates that Unilever, which is found to be on a path to surpass 1.5 times over the recommended SBTi level, exhibits a more comprehensive mitigation strategy for Scope 3 emissions, especially upstream, a link between remuneration and sustainability goals and comprehensive disclosure on the financial risk associated with Carbon Pricing Mechanisms.
Planet Tracker also calculated the magnitude of the companies’ emissions when downstream “optional” Scope 3 emissions – i.e. emissions derived from the use of other products and services together with the companies’ brands – are included.
The findings show that emissions for Unilever, Colgate-Palmolive and Procter & Gamble are up to 3, 5 and 8 times higher respectively when optional indirect emissions are accounted for. Procter & Gamble’s total emissions for example are 26 MTCO2e, but when downstream Scope 3 emissions are included increase to 200 MTCO2e – almost equivalent to the national emissions of France.
While Planet Tracker notes the challenging nature of measuring and impacting downstream emissions, it commends Unilever for including in its targets the downstream Scope 3 emissions the company has control over, such as transportation and distribution. However, the financial think tank does not recommend the inclusion of downstream indirect emissions in the companies’ transition targets due to the low control over them.
