Climate & Energy

Improving our own carbon footprint

Raising the bar

To be a leader in climate action it’s important to lead by example. That’s why at DSM we closely manage our absolute Greenhouse Gas (GHG) emission reduction; GHG efficiency; and energy efficiency.

In 2018 we raised the bar by targeting a 30% absolute reduction of the company’s direct GHG emissions (Scope 1) and emissions from our purchased energy (Scope 2), by 2030*, and reduce indirect value chain emissions (Scope 3) by 28% per ton of product produced in the same period. These targets have been validated by the Science Based Targets initiative (SBTi) as being  aligned with the Paris climate agreement.  DSM has also set a long-term target to reach net-zero emissions before 2050.

Furthermore, as an essential complement to our efforts to cut emissions, we also apply an integrated strategy of climate adaptation measures. For example, to improve the resilience of our assets and supply chains against potential physical impacts of climate change, we are developing our physical risk assessment. This involves mapping high-risk areas and major sites for emerging hazards and long-term impacts using different time horizons and climate scenarios.

We report on our climate actions through CDP (formerly the Carbon Disclosure Project), and we’ve committed to reporting this information in mainstream reports as part of our fiduciary duty implementing the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

Ultimately, together with our value chain partners, we are committed to eliminating our carbon footprint for the next generation.

*) from 2016 as baseline year

Our performance

  Aspiration 2020 2019
Greenhouse gas (GHG)      
GHG emissions scope 1 + 2 absolute reduction versus 2016 30% in 2030 25% 25%
GHG emissions scope 3 intensity reduction 28% by 2030 5% -
Energy      
Energy efficiency improvement year-on-year > 1% 5.7% 2.3%
Purchased electricity from renewable sources 75% by 2030 60% 50%

How do we achieve our targets?

How we are achieving our targets? Well we ensure that all new investments by our businesses are carbon neutral, and have dedicated investment programs on renewable energy and energy efficiency, we set-up in the light of adopting an Internal Carbon Price for example.

In 2018 we concluded a new €1 billion Revolving Credit Facility with our long term banking partners that links the interest rate payable to our GHG emission reductions., underscoring the importance of sustainability in everything we do - including corporate finance.

Furthermore, as our suppliers play a key role in delivering our strategy and targets, we are working closely with them on emission reduction projects through our CO2REDUCE program.

Renewable energy

In line with Sustainable Development Goal 7 (affordable and clean energy for all) we’re committed to responsible, efficient use of energy. At DSM we depend on the availability of renewable electricity via the grid or local electricity production. As local policies affect our ability to scale-up our procurement of renewable electricity, we work closely with authorities and other companies to scale-up supply of renewable electricity on the grid, including our own on-site solar fields at several sites.

We’re also a signatory of the Climate Group’s Renewable Energy 100 (RE100) initiative, which brings together the world’s leading companies committed to sourcing 100% of their electricity from renewable sources at the earliest possible opportunity. The intermediate target we set for 2030 is for 75% of our purchased electricity to be obtained from renewable sources.

Buying renewable power

In 2020, we continued to make good progress toward our target of purchased renewable electricity. The percentage of purchased electricity from renewable sources increased globally from 50% in 2019 to 60% in 2020. In the Netherlands, our portfolio of agreements continued to provide 100% purchased electricity from wind parks to all locations. All other sites in Europe are also using 100% renewable electricity due to other existing agreements. In North America, we have around two-thirds coverage of purchased electricity from renewable resources. We expect this to increase toward 100% in 2021. We also look for opportunities to replace heat from fossil fuels on our premises. The biomass cogeneration plant at our DSM Nutritional Products site in Sisseln (Switzerland) replaced the site's old natural gas-fired cogeneration plant and is the first major success in this area. Our partners, ENGIE and EWZ, own, operate and maintain the biomass plant, which started production early 2019.  The biomass cogeneration plant in Sisseln (Switzerland) reached full year capacity in 2020. The replacement results in 50 kt CO2eq reduction per year (of which about 80% is for us and 20% for the other partners).

For our site in Jiangshan (Jiangsu Province, China), the anaerobic digestor enables the production of biogas from wastewater. Our site in Chifeng (Inner Mongolia, China) uses purchased steam produced from biomass residues.

Internal Carbon Price

To encourage investments in low-carbon and carbon-free technologies, we  use an internal carbon price in the valuations of key investment projects and in the Profit and Loss statements of the business groups for internal management reporting.   Since 2019, business growth projects must either be GHG-neutral or else be compensated for within the same business. This increases the visibility of, and encourages accountability for, the impact of carbon on the business. In 2021, we increased the ICP from €50/t CO2eq to €100/t CO2eq to better reflect the updated insights on the actual price of CO2 to society. This price is also within the ranges of the scenarios we use for assessing climate transition risks.

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