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 fact, in 2018 we again 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 (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).

*) from 2016 as baseline year

Our performance and targets



Realization 2018

 

~8%1

GHG absolute reduction (vs. 2016)

1.4%3

Energy efficiency improvement year-on-year

41%

Purchased renewable electricity

76%

Employee engagement favorable score

0.33

Safety Frequency Recordable Index

62%4

Brighter Living Solutions

2021 / 2030 ambitions
 

30% absolute reduction by 2030 (vs. 2016)2

>1% average annually till 2030

75% by 2030

>75% by 2021

<0.25 by 2021

>65%5 by 2021

1) We estimate the effect of the underlying structural improvements in absolute GHG emissions by roughly 8% versus 2016, while the total absolute GHG emission reduction versus 2016 is approximately 18% (from 1.5 million tons to 1.23 million tons).
2) An additional Scope 3 intensity reduction target of 28% by 2030 (versus 2016) has been agreed which, together with our Scope 1 + 2 target, meets the criteria for a Science-Based Target.
3) Our energy efficiency improvement was 5.1% over the past strategic period.
4) Excluding temporary vitamin effect.
5) KPI will be updated as part of the Responsible Care Plan update in 2020.

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 DSM also 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 a newly established 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 2019, we continued to make good progress toward our target of purchased renewable electricity. The percentage of purchased electricity from renewable sources increased globally from 41% in 2018 to 50% in 2019. In the Netherlands, our portfolio of agreements continued to provide 100% purchased electricity from wind parks to all locations. At our DSM Nutritional Products manufacturing sites in Switzerland, approximately 50% of the electricity currently comes from hydropower. Following the first Power Purchase Agreement (PPA) in the US, which provides electricity from wind power, we continue to work with new projects setting us to be well positioned on our journey towards our RE100 commitment.

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. This milestone was celebrated at the grand opening in April, which was attended by representatives from all partners and the local authorities. The replacement results in 50 kt CO2eq reduction per year (of which about 80% is for us and 20% for the other partners).

Internal Carbon Price

To encourage investments in low-carbon and carbon-free technologies, we use an internal carbon price of €50/t CO2eq in the valuations of key investment projects and in the Profit and Loss statements of the business groups for internal management reporting. Starting from 2019, business growth projects must either be GHG-neutral or else be compensated for within the same business.

We’re among more than 1,400 companies already using internal carbon price. Why? Because it serves as a useful model for redirecting and scaling up investments towards low-carbon technologies; for driving operational efficiencies and especially in markets that already have a carbon price or in regions where a carbon price is expected to emerge.

Advocating

When it comes to climate, we’re an action taker and a movement maker – determined to play our part in shaping the low-carbon agenda. It starts with our commitment to the Sustainable Development Goals,  but it continues through everything from advocating carbon pricing policies to working alongside governments, NGOs, fellow private companies, and anyone else that can help us reach our goal of a low-carbon world for all.

We advocate consistent, long-term governmental policies that make a low-carbon economy a reality. We believe that government policies and initiatives should encourage low carbon innovations, improvement of energy efficiency and the scaling of renewable energy; innovate fiscal systems and policies, including  (but not limited to) carbon pricing and removal of fossil fuel subsidies; increase transparency and disclosure of financial investments and policies regarding the shift from fossil fuels to renewable energy; and educate the public on the impact of climate change.

We’re directly involved in several climate action initiatives and on the board of three prominent European public-private partnerships: the Bio-based Industries Consortium; the Sustainable Process Industry through Resource and Energy Efficiency (SPIRE); and the European Technology Platform for Sustainable Chemistry (SusChem). 

CDP (formerly Carbon Disclosure Project)

We report our climate actions to the CDP, which uses the power of measurement, transparency, information disclosure and accountability to drive positive change in the world of business and investment.

Carbon Pricing Champions

As a Carbon Pricing Champion we work with the UN Global Compact to advocate carbon pricing, set an internal carbon price and report on our progress (in our Annual Report).

CPLC

The Carbon Pricing Leadership Coalition (CPLC) and High-Level Commission on Carbon Pricing and Competitiveness are both convened by the World Bank. The CPLC brings together leaders from government, the private sector, academia, and civil society to expand the use of carbon pricing policies. The Commission serves as a platform for dialogue among business leaders to explore the evidence, concerns of business, and the lessons learned in designing and implementing carbon pricing policies in the context of competitiveness.

CLG Europe

The CLG Europe works under the leadership of The Prince of Wales to advocate climate change action with policymakers and businesses within the EU.

LCTPi

The Low Carbon Technology Partnerships Initiative (LCTPi), is a multi-stakeholder platform for developing and deploying large-scale, low-carbon technologies. At DSM we’ve joined the below50 campaign, uniting companies that produce, use and/or invest in fuels that are at least 50% less carbon intensive than fossil fuels.

PPCA

The Powering Past Coal Alliance (PPCA) is a global initiative of governments, businesses and organizations working to advance the transition away from coal power generation. Members are committed to working together for EU and OECD countries to phase out coal-fired electricity generation no later than 2030, with the rest of the world following no later than 2050.

RE100

The Renewable Energy 100 (RE100) aims to unite businesses in committing to using 100% renewable electricity (which includes the setting of bold intermediate targets). 

TCFD

At DSM we were among the first ten global leading companies that committed to implementing the recommendations of the Financial Stability Board's Taskforce on Climate-related Financial Disclosures (TCFD) within three years.

WEF CEO Climate Leaders

DSM is a Strategic Partner of the World Economic Forum (WEF). Together with 79 CEOs, we released an open letter to governments “Let’s partner on climate action”.

We Mean Business

We Mean Business is a coalition that invites hundreds of companies and investors to commit to low-carbon initiatives.

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