The Urgency of Transformative Commutes in the Face of Mandatory Scope 3 Reporting in Europe

Posted on November 28, 2023April 16, 2024 by MarjanM

Accelerating Sustainable Shifts

Responding to Mandatory Scope 3
Reporting in Europe

As the European Union’s Corporate Sustainability Reporting Directive (CSRD) takes effect in 2025, companies across Europe are facing a new frontier of environmental responsibility: mandatory Scope 3 reporting. This directive will require companies to disclose their indirect greenhouse gas emissions, including those generated by their employees’ commutes. This shift in reporting requirements has created a sense of urgency for companies to reevaluate their commuting practices and adopt sustainable alternatives.

The Mandate for Scope 3 Reporting:

A Catalyst for Change

The CSRD’s emphasis on Scope 3 emissions reflects a growing recognition that companies’ environmental impact extends beyond their direct operations. Employee commuting is a significant contributor to Scope 3 emissions, accounting for an estimated 15% of a company’s total carbon footprint. This highlights the need for companies to address commuting emissions as a crucial step towards achieving their sustainability goals.

Quantifying the Impact of Employee Commuting

The environmental impact of employee commuting is substantial. A study by the International Energy Agency (IEA) found that transportation is the largest source of greenhouse gas emissions in the EU, accounting for around 27% of total emissions. Within the transportation sector, road transport is the primary culprit, with employee commuting contributing significantly to this category.

To illustrate the scale of the issue, consider the following statistics:

The average European employee commutes 48 kilometers per day, generating around 1.5 tons of CO2 emissions annually.
A company with 1,000 employees can generate an estimated 1,500 tons of CO2 emissions per year from employee commuting alone.
These emissions are equivalent to the annual carbon footprint of approximately 300 homes.

The Strategic Advantage of Addressing Commuting Emissions

Tackling employee commuting emissions not only benefits the environment but also presents strategic advantages for companies:

Enhanced brand reputation: Companies that prioritize sustainable commuting practices can enhance their brand reputation and attract environmentally conscious consumers and investors.
Improved employee well-being: Reducing commuting times and stress can lead to a healthier, happier, and more productive workforce.
Reduced costs: Sustainable commuting alternatives can be more cost-effective than solo driving, saving companies money on parking subsidies and fuel reimbursements.
Enhanced risk management: Addressing Scope 3 emissions can help companies mitigate climate-related risks and adapt to emerging regulations.

Seizing the Opportunity:

A Call to Action

The transition towards mandatory Scope 3 reporting presents a golden opportunity for companies to transform their commuting practices and embrace sustainable alternatives. By prioritizing employee well-being, reducing environmental impact, and enhancing their bottom line, companies can emerge as leaders in sustainability and reap the rewards of a greener, healthier, and more prosperous future.

Getting Started: Practical Steps to Transform Commutes

To kickstart their journey towards sustainable commuting, companies can consider implementing the following measures:

Conduct a commuting survey: Understand the current commuting patterns of employees and identify potential areas for improvement.
Promote public transportation: Provide incentives for employees to use public transportation, such as subsidies or flexible work arrangements.
Encourage cycling and walking: Create infrastructure and facilities that support cycling and walking, such as bike lanes, secure parking, and shower facilities.
Promote carpooling: Implement carpooling programs or connect employees with carpool matching services.
Offer remote work options:Embrace remote work arrangements to reduce the need for commuting altogether.

By adopting these measures, companies can transform their commuting practices, reduce their environmental impact, and enhance their overall sustainability performance. The time to act is now, as the CSRD’s mandatory Scope 3 reporting requirements loom. Companies that seize this opportunity will not only contribute to a more sustainable future but also reap the rewards of a healthier, happier, and more productive workforce.

Corporate sustainability ideas that improve your ESG reporting ‘score’

Posted on November 9, 2023April 16, 2024 by SelenaDj

Corporate sustainability ideas to improve your ESG reporting ‘score’

Sustainability has become a global imperative, with governments worldwide making significant strides towards creating more eco-conscious cities and societies. In the quest to combat climate change, over 90 countries have set ambitious net-zero emissions targets, demonstrating a shared commitment to mitigating the most devastating effects of this global change. This collective effort has inevitably spotlighted businesses, compelling them to embrace sustainability not merely as a choice but as a necessity.

However, companies often grapple with uncertainty about what precisely they should do:

Understanding Sustainability Standards and Policies

The first step in unraveling the complexity of “becoming more sustainable” is comprehending the regulations behind sustainability expectations.

A promising starting point is the European Green Deal, a package of policy initiatives aiming to steer the EU towards a green transition, ultimately achieving climate neutrality by 2050.

As part of ESG reporting and in alignment with the European Green Deal, the EU mandates large and listed companies to regularly publish reports on how their activities impact people and the environment. To this end, The European Commission introduced the European Sustainability Reporting Standards (ESRS) for use by all companies subject to the Corporate Sustainability Reporting Directive (CSRD).

Companies required to report on sustainability under the CSRD include:

1. All large companies, irrespective of capital market orientation, with more than 250 employees and more than 40 million EUR in net turnover or 20 million EUR in assets.
2. All capital-market SMEs, except for micro-enterprises, which are not covered by the CSRD and, therefore, are not expected to report under ESRS

The Role of ESRS

The ESRS aims to enhance the scope and quality of corporate sustainability reporting, promoting sustainable development through transparency. As a result, stakeholders, particularly investors, other companies, and society, should gain deeper insights into companies’ business practices.

However, the impact of the ESRS goes beyond reporting requirements. Furthermore, companies are also mandated by ESRS to disclose whether they have improved their sustainability performance and further developed their sustainability management.

General Requirements and Disclosures for ESG Reporting

Under general requirements and disclosures, companies should provide a comprehensive overview of the organization and its operations:

Foundational ESG practices, including ESG policies, commitments, data collection and verification methods, reporting periods, data accessibility, future ESG goals, external assurance processes, etc.
The business overview – covers governance structure, ownership, market presence, operational locations, supply chain, products and services, customer base, employee profile, health and safety practices, ethical business practices, certifications and awards, etc.

Topical Requirements for ESG Reporting

Under topical requirements, organizations should offer an overview of their current environmental, social, and governance practices, future ESG goals, actions taken to improve their “sustainability score,” and more.

ESG Reporting as a Means to Corporate Sustainability

The journey towards successful reporting and enhanced sustainability starts with a robust understanding of your current practices:

Assess the impact of your operations on the environment, evaluating emissions, waste management practices, and natural resource usage (energy, water, etc.).
Examine your commitment to social responsibility, including labor practices, employee well-being, compensation practices, product safety and quality, and community engagement.
Evaluate your governance sustainability, encompassing board diversity and independence, stakeholder rights and responsibilities, data security, and cyber risks.

Reviewing your current practices through a sustainability lens should provide valuable insights into areas where you can enhance sustainability. To kickstart this process, we also provide an overview of simple changes you can make.

Reducing your Climate Change impact

Climate change is a primary driver behind the European Green Deal, making it a crucial starting point. This means continually seeking innovative ways to reduce carbon emissions.

For instance, consider the impact of daily commuting to your workplace on your carbon footprint.

—Did you know?: Passenger transportation contributes to the total carbon footprint (+34 Billion Tons per year) with 4,6 Tons of CO2 per car.—

Now envision the potential to reduce the number of cars on the road by 25%, 50%, or even a staggering 75%. You can achieve this by encouraging sustainable commuting practices like carpooling, cycling, and walking. To help you revolutionize employee commuting, we’ve created KINTO Join—a sustainable commuting platform that:

1. Connects employees with shared commuting routes, reducing the number of vehicles traveling to your workplace.
2. Validates eco-friendly journeys (carpooling, walking, and cycling), incentivizing environmentally conscious commuters.
3. Quantifies CO2 savings, enabling easy reporting of your contribution to zero emissions and eligibility for government subsidies.

Learn more about KINTO Join here.

Ideas to Improve Other ESG Practices

Pollution

To address pollution, implement zero-waste practices in offices or manufacturing facilities by reducing, reusing, and recycling materials.
Enhance indoor air quality in office spaces by installing air quality monitoring systems.

Water and Marine Resources

Support marine conservation efforts by participating in beach cleanup events or partnering with organizations dedicated to ocean protection.

Biodiversity and Ecosystems

Conduct biodiversity assessments on company-owned lands to identify and protect endangered species and habitats.

Resource Use and Circular Economy

Implement take-back or recycling programs for products at the end of their lifecycle, encouraging customers to return items for recycling or refurbishing.
Additionally, start a carpooling program to motivate employees to travel to work together, thus reducing overall fuel consumption.

Own Workforce

Offer flexible work arrangements, such as remote work options or flexible hours, to improve work-life balance for employees.
Provide mental health resources and support, such as Employee Assistance Programs (EAPs), to promote the well-being of your workforce.

Workers in the Value Chain

Provide training to suppliers on fair labor practices, worker safety, and human rights to ensure ethical treatment throughout the value chain.
Conduct regular audits of suppliers to assess compliance with labor standards and social responsibility requirements.

Affected Communities

Prioritize hiring from within the local communities where your company operates to create job opportunities and strengthen community ties.
Allocate a percentage of profits or resources to community development projects, such as building schools or supporting healthcare initiatives.

Consumers and End-Users

Add sustainability labels or certifications to products, providing consumers with information on the environmental and social impacts of their purchases.
Launch educational campaigns to inform consumers about sustainable product usage and responsible disposal methods.

Business Conduct

Establish a confidential whistleblower hotline for employees to report ethical concerns or misconduct within the company.

It's Action Time: Make Corporate Sustainability Ideas a Reality

Embracing sustainability isn’t just an option; it’s a responsibility we all share. To commence this journey start small but start now. Take actionable steps to reduce your carbon footprint, enhance workplace well-being, and contribute to your local community.

Begin with the ideas we’ve shared in this blog post, but do not stop there. Furthermore, make sure that you are continuously reviewing your current practices through a sustainability lens and thinking about small actions you can take today to make a big impact tomorrow. Additionally, share your ideas! Remember: the simple changes you make every day not only align with sustainability standards but also exemplify your dedication to a brighter and more sustainable tomorrow.

Learn more about how your employees’ commuting habits can impact your ESG reporting score here

Category: Corporate Sustainability Reporting (CSRD)