At AkzoNobel, we’re aware that climate change could affect our operations, our supply chain and our customers. So, in 2017, we committed to becoming a carbon-neutral company by 2050. Now we’re turning this ambition into reality by setting aspirational, science-based targets. As well as aligning with the 1.5°C pathway, this means we’ll increasingly deliver sustainable solutions to our customers.
Ambitious mitigation plans in place
Reducing carbon emissions by 50% throughout out whole value chain
Climate change mitigation is an integral part of our approach to sustainable business and plays an important role in our company strategy. It brings risks, but also creates opportunities. In 2021, we announced an ambitious target of reducing carbon emissions across our full value chain by 50% by 2030, taking 2018 as our baseline.
Our ambitions are aligned with the Paris Agreement, which aims to limit climate change and ensure the global temperature doesn’t rise more than 1.5˚C above pre-industrial levels. Approved by the Science Based Targets initiative (SBTi), this will help to drive our innovation and collaboration with our value chain partners, including customers and suppliers.
The commitment includes our own operations (Scope 1 and 2), as well as Scope 3 upstream and downstream. Scope 3 covers purchased goods and services, application and use of our products, and end-of-life. Together, this covers around ~96% of our total emissions.
We’re already looking for innovative ways to tackle the issue and have a clear plan to reach our Scope 1 and 2 commitment by transitioning to 100% renewable electricity and reducing our energy by 30% compared with 2018.
Our ambition on renewable electricity is progressing well, with our operations in Europe having fully switched over by January 2022. Our current total share of renewable electricity use is 45% globally, approaching our 2025 interim target of 50%. In total, 44 of our locations now use 100% renewable electricity, with 23 sites using solar panels as a supplementary source of energy. We plan to increase this number in the near future.
To drive this continuous improvement, 20% of our Board of Management’s long-term incentive is linked to environmental, social and governmental (ESG) goals, including energy use and renewable electricity. In addition, climate change is included in our risk assessment.
Collaboration for the future
Tackling climate change requires strong collaborative innovation across our value chain
For Scope 3, we’re taking action by increasing our sustainable solutions, while our pioneering Paint the Future collaborative ecosystem approach continues to gather momentum. It’s focused on engaging with suppliers and customers around the world to collectively find solutions to the challenge of cutting carbon emissions by 50%.
The innovation and development of our sustainable solutions plays a key role. We’re able to offer our customers – and their customers in turn – sustainable solutions that enable them to reduce their own emissions and use products with a lower carbon footprint. Developing these sustainable solutions and services involves the vast majority of our 2,699 people in RD&I teams and of our €230 million innovation investments.
In 2021, we continued to focus on product carbon footprint assessment, helping our customers to analyze and reduce their own carbon footprints. We’re encouraging all our value chain partners to transition to the use of renewable energy sources and work with us to reduce the carbon emissions from VOCs and from the application and use of our products, and to increase the use of renewable raw materials.
Sustainable solutions – how we are helping our customers
With our Sustainable Solutions, we continue to offer our customers – and their customers in turn – technologies and solutions that enable them to reduce their own emissions and material use. Examples include lower curing coatings, low or zero solvents, water-based solutions and using fewer layers of paint.
Helping buildings fight the heat island effect
As an industry leader developing products and technologies that help create more green buildings, our product innovations play a vital role to in making cities and communities more sustainable.
Overall, building and construction is responsible for around 39% of global energy-related carbon emissions. If no action is taken to improve energy efficiency in the building sector, demand is expected to rise by 50% by 2050. We supply this industry with our “Cool Chemistry” technology. As well as providing ultimate protection outside, it can also cut inside temperatures by up to 5°C, reducing energy consumption and lowering the carbon footprint.
Carbon savings in the production process
Our RUBBOL 100% UV cured exterior range of Sikkens wood coatings can cut drying time by up to 16 hours. This system helps save on production time and energy costs, while providing outstanding performance. In addition, because the range produces zero emissions and needs no mixing, the production process is more sustainable – another important factor for many of our customers.
Low-E energy efficient range: lower costs, improved carbon footprint
The Low-E collection from Powder Coatings is designed to reduce the curing temperature or curing time without sacrificing quality or performance. By using this range, our customers can cut their energy consumption and/or increase application productivity. This contributes to lowering costs, as well as improving their carbon footprint.
In addition, we provide customers with environmental footprint information (including carbon emission data) which they can use for their own climate action plans. This is achieved by using lifecycle assessment (LCA) methodology and providing environmental product declarations (EPDs).
Climate change adaptation
As recommended by the Task Force on Climate-related Financial Disclosures (TCFD), we continue to monitor our risks and opportunities related to climate change. As a company, we’re exposed to physical risks – such as those associated with water scarcity, flooding and weather events. We also consider transitional risks that can lead to changes in technology, market dynamics and regulations.
For the last six years, we’ve implemented an internal carbon price for investment decisions, anticipating the impact of any future carbon pricing. We have sustainability assessments in place for investment projects, including water risk assessment for new locations. Annually, we also quantify the potential transitional risk impact of any global carbon taxation by multiplying our carbon footprint with the internal carbon price. The financial impact is well below 1% of revenues.
Identifying out water related risks
Climate change has rapidly impacted the earth’s most precious resource: water. Many regions have no access to clean water, so we’ve committed to sustainable water stewardship; we endorse the United Nations CEO Water Mandate and set clear goals on water consumption and reuse.
As part of our Planet ambitions we are committed to reusing water at all our most water intensive sites by 2030.
We continue to assess risks related to water. We use the Aqueduct water risk atlas developed by the World Resources Institute to assess the level of risk related to water at our production locations. Around 10% of our sites are in areas rated “extremely high” for overall water risk (with standard weighting factors). Aqueduct is also used to assess current climate related risks (coastal flooding, river flooding and drought). Around 14% of our locations are in areas rated “extremely high”. These account for 3% of our fresh water use.
Future risks for 2030 were also evaluated using Aqueduct (water stress, business as usual). Around 25% of our locations are in areas rated “extremely high”, accounting for 7% of our fresh water use. All locations confirmed as “extremely high” in any of these assessments will develop a risk mitigation plan.
We continued to assess our suppliers in 2021 and challenged them on their water risk, particularly in regions affected by river or coastal flooding. We’re working with them to look for solutions to these challenges.