ESG reporting – assessing for the future
Environmental, Social and Governance (ESG) performance shows how a company is addressing sustainability challenges. When combined with financial indicators, this gives a more complete picture of the risk and opportunity profile of a company for stakeholders. Head of Sustainability Development and Climate at DNV, Ellen Skarsgård, and Environmental Analyst, Katerina Tzafilkou, reflect on how ESG reporting requirements might change in the future and how DNV works with customers to help them bring their ESG strategy to life.
DNV’s sustainability strategy is twofold. On the one hand we work to become more sustainable in our own operations, and on the other we help our customers and partners reach their sustainability targets. The latter includes assurance services related to renewable energy, sustainable supply chains, and green financing.
-We see the biggest impact DNV can have on sustainability is linked to the expertise and services we provide to our customers, to help them decarbonize and become more efficient in their daily operations. Indeed, DNV’s carbon footprint quite low in itself, but as a provider of ESG-related services – services where we evaluate companies’ sustainability performance in a comparative way – our customers and stakeholders expect us to do our own homework as well, says Head of Sustainability Development and Climate at DNV, Ellen Skarsgård.
Expanding ESG reporting to Scope 3 emissions
-DNV’s strategy focuses on how we can enhance the sustainability of our business, in line with the UN Sustainable Development Goals (SDGs), and our goal of becoming a climate net positive company. We have clear goals to reduce our carbon footprint by half.
A full overview of our carbon emissions can be found in DNV’s annual report. The report covers three emission scopes: direct emissions; indirect emissions from the energy we purchase; and finally Scope 3 emissions which comprise emissions from DNV’s value chain, says Katerina Tzafilkou, an Environmental Analyst in Skarsgård’s team.
As customers’ and stakeholders’ expectations towards ESG reporting intensify, more and more organizations are extending their ESG reporting to improve their carbon accounting and include more sources of emissions .
- Scope 3 emissions are emissions stemming from everything from business travel and commuting to work, to the IT equipment and cell phones we purchase, and our data storage. The Scope 3 emissions category is by far the largest for many companies, including DNV, and it stands for about 80% of our emissions, adds Tzafilkou.
Going beyond offsetting
Even though reporting on Scope 3 emissions is still voluntary under the Greenhouse Protocol, both Skarsgård and Tzafilkou expect reporting on value chain related emissions to become mandatory.
-A low carbon economy cannot be achieved without considering the carbon footprint of one’s value chain. It makes a lot of sense to track emissions at full scale, for instance related to business trips or office commuting. Since last year, DNV has been meticulously mapping and reporting on emissions from these types of activities, says Skarsgård.
-Our goal is ultimately to become climate positive, she adds. -That means we proactively work to reduce and avoid emissions, and currently, we offset what we cannot reduce or avoid. But we are also looking into innovative technologies to capture or absorb carbon. We are collaborating with Sintef in a pilot project which explores direct air capture through seaweed farming.
-Going beyond offsetting is very difficult, but thanks to highly skilled colleagues across several business areas and regions, DNV is very well positioned to utilize its expertise to push both our customers’ and our own boundaries when it comes to emissions reduction and reporting, Tzafilkou concludes.
