Integration of coupled sectors decarbonization pathways across the value chain into corporate carbon management processes

Abstract

To contribute to the mitigation of climate change, a significant number of businesses from a wide range of sectors increasingly commit to science-based carbon reduction targets. However, to integrate their ambition into strategic and operational business processes, companies often merely rely on historically determined emission data. These data provide limited support in forecasting the company's future product emissions within the framework of corporate carbon controlling. This implies for example that windfall gains from regulatory and individual decarbonization efforts in coupled sectors can only be forecasted to a limited extent. Yet, for a more reliable basis for decision making, not only proactive product planning but also scenario pathways on how coupled business sectors will progress must be incorporated. Especially for companies with complex, globalized supply chains highly dependent on raw materials, this leads to a more dependable analysis of the carbon hot-spots to be tackled. Therefore, based on an analysis of current corporate carbon management practices, a framework is elaborated to expand corporate carbon controlling to coupled sectors and their decarbonization pathways. This includes a method to integrate decarbonization forecasts of coupled sectors within a company's product planning activities. This method is illustrated with an exemplary case study, in which the product related emissions of a fictive automotive manufacturer are forecasted between 2020 and 2050 using product portfolio projections and coupled sector decarbonization. The latter leads to an overall company's carbon emissions reduction in 2050 by about 77% in comparison to the prediction neglecting external sustainability aspirations and thus emphasizes the importance of capturing these effects.