Data analytics and rating firm Moody’s has exceeded its near-term greenhouse gas emissions (GHG) reduction targets from a 2019 base year, as reported in its newly released sustainability report.
In its 2021 Stakeholder Sustainability and Task Force on Climate-related Financial Disclosures (TCFD) reports, the company said it achieved a 92% reduction in Scope 1 and 2 GHG emissions, compared to its near-term target of 50%. Those stem from fuel and energy-related activities.
Photo Courtesy Amarntath Tade
Moody’s said that 28% of its suppliers of purchased goods and services and capital goods had adopted science-based targets. Moody’s goal is to reach 60% by 2025.
“In 2021, we became a Founding Member of the Net Zero Financial Services Provider Alliance (NZFSPA), part of the Glasgow Financial Alliance for Net Zero (GFANZ), and committed to align our relevant products and services to net-zero,” said Mark Kay, Moody’s CFO in the TCFD report.
Last September, Moody’s accelerated its original net-zero commitment across its operations and value chain by ten years, committing to reaching this long-term target by 2040. The 2021 report also pointed out that the rating company was one of the first few to have both its near – and long-term net-zero targets validated by the Science Based Targets initiative (SBTi).
SBTi is a partnership between the United Nations Global Compact, World Resources Institute (WRI), and World Wide Fund for Nature (WWF), which helps companies set specific science-based emissions reduction targets.
In 2021, over 2,200 businesses and financial institutions with a combined market capitalization of $38 trillion worked with SBTi to reduce their GHG emissions. The global reach of those companies was 70 countries and 15 industries, representing over one-third of the global market capitalization.
More than 1,100 of the businesses had already their targets approved by SBTi.
Eighty percent of the firms were aligned with the 1.5 degrees Celsius goal, while two-thirds had committed to cutting their emissions at a higher rate than required. Ninety-six percent of businesses included Scope 3 GHG emissions reductions in their targets, and scope 3 emissions are usually the most difficult to achieve.
“SBTi companies with approved targets are reducing emissions at an accelerating pace, collectively achieving 12% scope 1 and 2 emissions reduction in 2020. This resulted in a total-emissions decrease of 29% between 2015 and 2020,” noted SBTi in its 2021 Progress Report. “An annual 4.2% emissions reduction is required for 1.5ºC-aligned science-based targets. A typical SBTi-approved company has been even more ambitious than the 1.5ºC trajectory, with a linear rate of 8.8% scope 1 and 2 reductions a year during the period with approved targets.”
In 2022, total companies working with SBTi exceeded 3,000, with over 1,400 having science-based targets and about 1,100 net-zero commitments.