Environmental pressure doubles the number of companies reporting carbon emissions

The number of companies reporting their carbon emissions has doubled in the last three years and reached a record level in Brazil.

According to a survey by FGVces (Center for Sustainability Studies of the Fundação Getúlio Vargas), 305 companies published an inventory of greenhouse gases in 2021, which represents an increase of 108% compared to 2018, when 145 organizations made the disclosure.

The study considers data from the Public Emissions Registry, a platform that integrates the Brazilian GHG Protocol Program and is considered one of the main databases for this type of diagnosis.

Compared to 2020, the growth in the number of companies was 60%, from 192 to 305. According to the report, the increase occurs despite the difficulties faced by companies during the Covid-19 pandemic, demonstrating the greater commitment of the business sector with the sustainable agenda.

The Brazilian GHG Protocol Program is an initiative of FGVces that seeks to encourage companies to calculate and report their carbon footprints. Created in 2008, the project adapts one of the most used methods in the world to make an emissions inventory to the Brazilian reality: the GHG Protocol (Greenhouse Gas Protocol).

Although the model simplifies the process for companies, the calculation of emissions is usually complex, since it does not only consider the carbon directly released by the production activity.

In corporate jargon, the climate footprint is segmented by scope. Scope 1 emissions are those generated directly by the company’s operations. Scope 2 concerns the gases released indirectly in energy consumption. The rest falls into scope 3, which ranges from business trips to purchasing raw materials, transporting products and suppliers.

According to Guilherme Lefevre, a researcher at FGVces, the number of companies that carry out this survey of emissions is much higher than the 305 companies. The Brazilian GHG calculation tool —the recipe for the cake, as he says—reaches 2,000 downloads a year. What has increased are organizations that choose to disclose the inventory in the Public Emissions Registry.

The study carried out a qualitative survey with 200 companies to understand what is behind this movement. One of the main motivations mentioned was the demand of the so-called stakeholders, which includes customers, suppliers and investors. According to the respondents, those who do not publish the inventory may lose competitiveness.

The findings corroborate one of the main theses of the ESG agenda (environmental, social and governance): that companies would be pressured to follow sustainable principles because of business risk.

According to Lefevre, most companies that publish inventories on the platform are large —such as Petrobras and Eletrobras—, publicly traded and belonging to the financial, retail, energy and agribusiness sectors.

Although there are many beginners on this journey, the researcher says that 60% of companies received the “gold seal” of the program, which attests that the report is complete and has been audited by an independent third party.

“We clearly see that there is an increase in the commitment of the Brazilian business sector to disclose their emissions data. The big question is whether this is accompanied by an increase in climate ambition”, he ponders.

Guarany Osório, a researcher at FGVces, highlights that the increase in the publication of greenhouse gas inventories occurs even without any legal obligation.

In May 2022, the federal government published a decree on the carbon market, but several points remain open and companies are still not obliged to be accountable, much less set emission reduction targets.

“It seems that the business and financial sectors have engaged with the agenda, since they do it without having a law that obliges them”, he says “It is not a cloud, a crisis, a pandemic or a short-term government that will make the companies change course.”

Ambev is one of the companies that started publishing its inventories in the Public Emissions Registry recently, in 2021. As it operates in several countries, the company has been collecting and reporting its carbon footprint since 2000, but using the international platform. The reason for also using the national system is to offer a Brazilian perspective, which allows comparisons with other sectors and a historical evolution.

According to Karen Tanaka, sustainability manager at Ambev, the survey carried out by the company even considers the greenhouse gases emitted when consumers go to freeze their beer at home.

“I see with very good eyes the existence of more companies reporting. We even have a program for our suppliers to report”, he says. “I need to know how much each supplier is investing in decarbonization. I need him to know how to make the diagnosis to start cutting”, he adds.

The company has public emission reduction targets. The main one is to achieve net zero (zero net emissions) across the entire value chain by 2040, which includes the sub-target of cutting 25% by 2025.

Another company that has also recently started to report its inventory is Porto do Açu, controlled by Prumo Logística. The terminal is privately held, and began operations in 2014, with a focus on supporting oil and gas activities.

Currently, the idea is to place the company in the energy transition, allowing the port to be strategic for supporting offshore wind farms and for the production of green hydrogen.

Eduardo Kantz, director of institutional relations and sustainability at Prumo, says that Porto do Açu has been carrying out an emissions inventory since 2016, but started reporting from 2020. According to him, the publication has more to do with the company’s positioning on the agenda of sustainability than pressure from specific stakeholders.

“The inventory is, first, the materialization of a commitment to transparency and dissemination of information, but also part of a larger strategy to have Açu as a great energy hub that can help all actors involved in port activities to achieve their emission reduction goals”, he says.

A representative of a carbon-intensive sector, Azul has been submitting its emissions inventory since 2019.

Camila Almeida, the airline’s people director, recalls that, in addition to its socio-environmental purpose, the company is publicly traded, which makes it more subject to demands from various stakeholders. “We have crews asking us, customers, investors, we have the world looking at us,” she says.

Azul’s biggest environmental impact comes from aircraft emissions. Currently, the company adopts measures to minimize this footprint, seeking short and efficient routes, among other initiatives. In addition, it has been partnering with aircraft manufacturers —such as Airbus and Embraer— seeking cleaner technologies, and with companies that may be strategic for a future supply of SAF (sustainable aviation fuel).

According to Almeida, Azul has a goal of being net zero by 2045 and the first step is to take measurements. “The inventory provides starting points to guide our commitments and chart the path to get there.”