By Faith Taylor, Global Sustainability Officer
Over the past few years, the number of companies with net zero goals has greatly increased. But many reports suggest that these companies aren’t on track to reach their net zero goals. To ensure that global temperature increases stay below 1.5°C, as recommended by the Intergovernmental Panel on Climate Change (IPCC), it is imperative that companies are not only committing to achieving net zero emissions but are also building and executing well-developed and science-based net zero plans.
Since the start of Kyndryl in November 2021, we have conducted extensive groundwork to develop our 2040 long-term and 2030 short-term net zero emissions goals so that we could confidently announce our targets. We are happy to share that we have committed to validating these net zero emissions goals through the Science Based Targets initiative (SBTi). SBTi has launched the leading scientific framework to support the development of net zero goals based on climate science.
Through this process, we have identified four steps for building and executing a successful net zero emissions plan.
1. Create a greenhouse gas emissions inventory.
To establish net zero goals, you must be able to track and measure your greenhouse gas (GHG) emissions and that means building a GHG inventory or baseline of your footprint. The industry standard for determining how to create a GHG emissions inventory for direct and indirect emissions called Scope 1, 2 and 3 is the GHG Protocol. According to your business model you need to first determine your scope and boundaries of what to include in the inventory. At Kyndryl, this meant creating a global assessment and comprehensive site typology to outline the emissions of our locations using an Inventory Management Plan (IMP).
2. Gather your data and get it third party verified.
This can be the most challenging step, especially when you are first starting as data comes from many sources, such as energy in your facilities, employee travel, waste and supply chain. When it comes to gathering and verifying GHG emissions data, there are three main pieces of advice:
- Develop a cross-functional team to assist with collecting the necessary data, from employees to 3rd party vendors or others with process data.
- Evaluate and include the source, timing, and accuracy of the data you are collecting.
- Think about the 80/20 rule: 20% of your data collection points will probably account for 80% of your emissions. For example, your top tier suppliers in your value chain may be contributing the largest percentage of your emissions.
Leverage software tools to streamline data collection. Software that assists with data and project collection offers increased business efficiencies and allows for improved management of ways to reduce your company’s emissions.
An important sub-step here is to get the emissions data you collect validated by a third-party expert in assurance. This helps to ensure that you have data integrity and accuracy of your GHG inventory and enhances the credibility of your reporting.
3. Develop your action plan and set your net zero emissions goals, aligning with the Science Based Targets initiative (SBTi).
Once the GHG data is compiled and the emission calculations are completed, it’s time to scientifically review the data to determine your company’s targets and goals. We recommend using SBTi because it uses scientific evidence to outline reduction goals that are third-party validated. Here are a few questions to consider when developing your net zero action plan:
- What are our business strategies and how can we ensure that we are aligning our sustainability net zero goals with them?
- What emission reduction activities can we implement to meet our goals?
- What are the timing and resources we need to achieve our goals?
At Kyndryl, we developed a carbon abatement financial model. This model helps us to understand the tradeoffs and strategies we need to meet our targets and goals.
The creation of a data-based action plan allows you to confidently report your baseline and targets through (SBTi), and measure progress on your strategy to meet your net zero goals requested by investors, customers, and regulators.
4. Execute your action plan — and annually report and evaluate your progress.
This is a crucial step in achieving net zero emissions; without execution of our action plans, it will be impossible to meaningfully reduce our emissions and achieve Kyndryl’s goal to be net zero by 2040.
Execution of this plan may look different for each company and industry. At Kyndryl, it includes energy efficiency projects, renewable energy investments, supplier and customer engagements, and innovation across the value chain. The action plan should include education of your employees, suppliers, customers, and external partners so that they understand how they can help you meet your goals.
As you execute your action plan, it is important that you meet regulatory, customer and investor requests to demonstrate the “how.” Transparency today is demanded by publicly disclosing your sustainability progress in the form of frameworks and ongoing questionnaires. We recommend two key sustainability reports to meet this demand: the Task Force for Climate Related Financial Disclosures (TCFD) which allows businesses to disclose climate risk management, and the other is the Carbon Disclosure Project (CDP) Climate Report, which focuses on the overall environmental performance of companies.
To learn more about Kyndryl's net zero goals and sustainability efforts, please visit our Climate Action page and stay tuned for our first ESG report coming later this year.