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E1-4 - Targets related to Climate change mitigation and adaptation

Updated over 5 months ago

ESRS Standard

The term"Policy" is synonymous with the term"Policy", which is used within the German version of the ESRS Standard.

30 The company must disclose its defined climate-related Targets.

31 The purpose of this disclosure requirement is to provide an understanding of the targets the company has set to support its Climate change mitigation and adaptation policies and to address the material climate-related impacts, risks and opportunities.

32. the disclosure of Targets referred to in paragraph 30 shall include the information required by ESRS 2 MDR-T Tracking the effectiveness of policies and actions through targets.

33. as part of the disclosures referred to in paragraph 30, the company shall disclose whether and how it has set GHG emission reduction targets and/or other targets for the management of Material Impacts, Risks and Opportunities, such as the use of Renewable energy, Energy efficiency, Climate change adaptation and Mitigation of Physical risks or Transition risks.

34 If the company has set GHG emission reduction targets (39), the ESRS 2 MDR-T and the following requirements apply:

  • (a) GHG emission reduction targets shall be expressed in absolute terms (either in tons of CO2 equivalent or as a percentage of a base year's emissions ) and, where appropriate, in intensity terms.

  • b) The GHG emission reduction targets are specified for greenhouse gas emissions of categories Scope 1, 2 and 3. In the case of combined GHG emission reduction targets, the company indicates which GHG emission categories (Scope 1, 2 and/or 3) are covered by the target, what proportion relates to the respective scope and which greenhouse gases are covered. The company explains how the consistency of these Targets with the limitations of its GHG inventory is ensured (as provided for in disclosure requirement E1-6). The GHG emission reduction targets are gross targets, i.e. the company may not include the removal of greenhouse gases, Carbon credits or avoided emissions as a means of achieving the GHG emission reduction targets.

  • c) The company indicates its current baseline year and reference value and updates the baseline year for its GHG emission reduction targets after each subsequent five-year period from 2030 onwards. The company may disclose progress made towards its Targets prior to its current base year, provided this information meets the requirements of this Standard.

  • d) The GHG emission reduction targets shall include, as a minimum, targets for the year 2030 and, if available, for the year 2050. From 2030 onwards, targets shall be set after each five-year period.

  • e) The company shall indicate whether the GHG emission reduction targets are scientifically sound and consistent with limiting global warming to 1.5°C. The company also discloses the guidance and framework used to set these targets, including whether they have been derived using a sector-specific decarbonization pathway, the underlying climate and policy scenarios, and whether the targets have been externally assured. As part of the critical assumptions for setting the GHG emission reduction targets, the company briefly explains how it has taken into account future developments (e.g. changes in sales volumes, shifts in customer preferences and demand, regulatory factors and new technologies) and how these may impact both its GHG emissions and emission reductions.

  • f) The company describes the expected Decarbonisation levers and their overall quantitative contribution to achieving the GHG emission reduction targets (e.g. energy or material efficiency and consumption reduction, fuel switching, use of renewable energy, phasing out or substitution of products and processes).


Application Requirements (AR)

AR 23 Pursuant to paragraph 34(a), the company may specify GHG emission reduction targets in intensity values. The intensity targets are formulated as a ratio of GHG emissions to a unit of physical activity or output. Relevant units of activity or output are specified in the sector-specific ESRS. In cases where the company has only set a GHG intensity reduction target, it still reports the corresponding absolute values for the target year and interim target year(s). This may result in an entity being required to disclose an increase in absolute GHG emissions for the target year and the interim target year(s), for example because it expects organic growth in its business.

AR 24 When disclosing the information required under paragraph 34(b), the company shall state the proportion of the Targets that applies to the relevant category of greenhouse gas emissions (Scope 1, 2 or 3). The company shall specify the methodology used to calculate the Scope 2 GHG emissions included in the target (i.e. either the site-based or the market-based methodology). If the GHG emission reduction target boundary differs from the boundary of the GHG emissions reported under the E1-6 disclosure requirement, the company shall disclose the gases covered, the respective percentage of Scope 1, 2 and 3 GHG emissions covered by the target, and the total emissions. For the GHG emission reduction targets of its subsidiaries, the company applies these requirements accordingly at the subsidiary level.

AR 25. when providing the information on the base year and the reference value required under paragraph 34(c)

  • (a) the company shall briefly explain how it has ensured that the baseline against which progress against the target is measured is representative of the activities covered and the influences of external factors (e.g. temperature anomalies in a given year that affect energy consumption and associated greenhouse gas emissions). This can be done by normalizing the reference value, or by using a reference value derived from a three-year average, if this increases representativeness and allows a more accurate representation.

  • (b) the benchmark and base year shall not be changed unless there is a material change to the target or reporting boundary. In this case, the company shall explain how the new baseline affects the new target, its achievement and the presentation of progress over time. To promote comparability, when setting new Targets, the company selects a current base year that is no more than three years prior to the first reporting year of the new target period. For example, for 2030 as the target year and a target period between 2025 and 2030, a base year from the period 2022-2025 is selected.

  • c) the company updates its base year from 2030 and every five years thereafter. This means that before 2030, the base years chosen by companies can be either the current base year for existing Targets or the first year of application of sustainability reporting in accordance with Article 5(2) of Directive (EU) 2022/2464 (2024, 2025 or 2026) and every five years after 2030 (2030, 2035, etc.).

  • (d) when submitting climate-related Targets, the company may indicate the progress made towards achieving these Targets before its current base year. In doing so, the company shall, as far as possible, ensure that the information on past progress meets the requirements of this standard. Where there are methodological differences, for example in relation to target boundaries, the company shall briefly explain these differences.

AR 26 When providing the information required under paragraph 34(d) and (e), the company shall provide the information for the target period by reference to a sector-specific, if available, or a cross-sectoral emission trajectory consistent with the 1.5 °C global warming limit. For this purpose, the company calculates a 1.5°C target-aligned baseline for the Scope 1 and Scope 2 GHG emission categories (and a separate one for Scope 3, if applicable) against which its own GHG emission reduction targets or interim targets within the respective categories can be compared.

AR 27 The reference target value can be calculated by multiplying the greenhouse gas emissions in the base year by either a sector-specific (sectoral decarbonization method) or cross-sectoral (absolute contraction methodology) emission reduction factor. emission reduction factor. These emission reduction factors can be derived from various sources. The company should ensure that the source used is based on an emission reduction pathway that is consistent with limiting global warming to 1.5°C.

AR 28 Emission reduction factorsare constantly evolving. Companies are therefore advised to use only updated publicly available information.

Cross-sector reduction pathway (ACA) based on 2020 as reference year.

2030: -42 %
2050: -90 %

Source: Based on "Pathways to Net-zero - SBTi Technical Summary" (Version 1.0, October 2021)

AR 29 The reference target value depends on the base year and the baseline values of the company's emission reduction target. As a result, the reference target value may be easier to achieve for companies with a current base year or higher baseline emissions than for companies that have already taken ambitious actions to reduce greenhouse gas emissions in the past. Therefore, companies that have achieved emission reductions in the past in line with a cross-sectoral or sector-specific pathway aligned with the 1.5 degree target can adjust their baseline emissions accordingly to determine the reference target. If the company adjusts its baseline emissions accordingly to determine the reference target, it shall not take into account any emission reductions before 2020 and shall provide appropriate evidence of past greenhouse gas emission reductions.

AR 30 When providing the information required under paragraph 34(f), the company shall explain the following:

  • (a) With reference to its climate change actions, the Decarbonisation levers and their estimated quantitative contribution to achieving GHG emission reduction targets, broken down by category (Scope 1, 2 and 3),

  • b) Whether it intends to introduce new technologies and what role they are expected to play in achieving its GHG emission reduction targets,

  • c) Whether and how it has considered different climate scenarios, including at least one climate scenario consistent with limiting global warming to 1.5°C, to identify relevant environmental, social, technology, market and policy-relateddevelopments and determine its Decarbonisation levers.

AR 31. the company may present its GHG emission reduction targets together with its climate change mitigation actions (see section AR 19) as a table or graphical pathway showing developments over time.

Base year (e.g. 2025)

Targets for 2030

Targets for 2035

Targets for 2050

GHG emissions (in thousand tons of CO2e)

100

60

40

Energy efficiency and reduction in consumption

-10

-4

Material efficiency and reduction in consumption

-5

Fuel switching

-2

Electrification

-10

Use of Renewable energy

-10

-3

Gradual discontinuation, replacement or modification of the product

-8

Gradual discontinuation, replacement or modification of the process

-5

-3

Other


Examples from previous practice

Examples serve only as an indication of how a disclosure requirement has been reported by other companies to date. Audited ESRS reports are not yet available. There is no guarantee of accuracy and completeness.

E1-4 - Targets Climate change mitigation

Our emission reduction targets are scientifically sound. Since first submitting our targets to the Science Based Targets Initiative (SBTi) in 2021, we have made significant progress, including improving the accuracy of our emissions data and strategic business developments. These changes required a retrospective adjustment of the base year emissions in accordance with the SBTi protocol to ensure a consistent data basis.

Following this recalculation, we resubmitted our revised ten-year emissions reduction target at the beginning of 2023, which was validated in March. We also submitted a long-term Net-zero target, which was also validated.

Our medium-term science-based Targets:

  • We are committed to reducing absolute greenhouse gas emissions in Scope 1 and Scope 2 by 40% by 2030 compared to 2021.

  • In addition, we aim to reduce Scope 3 emissions from upstream transport logistics by 50% per tonne transported per kilometer within the same timeframe.

  • The Scope 3 target is based on an intensity metric that records CO₂e emissions per tonne transported and kilometer travelled - a common measure in the logistics industry. An annual reduction in emissions intensity of around 6.5% is required to achieve the target, even if our business grows.

Our long-term science-based Targets:

  • We are committed to achieving net-zero emissions across the entire Value chain by 2050.

  • To achieve this, we are planning an 85% reduction in Scope 1 and Scope 2 emissions by 2050 compared to 2021.

  • We also want to reduce Scope 3 emissions per transported tonne per kilometer by 95%.

These Targets underline our commitment to a sustainable future and drive us to consistently shape our business activities in line with Climate change mitigation requirements.

This article has been machine translated. In case of errors, please contact [email protected].

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