Swedish companies can play a leading role in mitigating climate change

In the wake of recent findings – the result of ongoing analysis to help define the new Swedish climate targets – comes the stark realisation that Sweden will not meet the goals set for 2030.  

But these concerns are not just limited to Sweden; we know the whole world is falling badly behind. We are halfway to the Paris Agreement. We only have six years left to reduce our greenhouse gas emissions by 35%. If we miss the 2030 target, we cannot reach net zero by 2050 and the damage to the planet will be irreversible.

A huge part of the systemic change has to be driven by businesses. Our economies have thrived for 200 years due to rapid industrialization boosted by large polluting industries. The top 100 companies are responsible for 71% of the world’s emissions. So how do we  as humanity recalibrate our attitudes towards growth and instead focus on creating sustainable, circular economies and building a more livable planet for the next generation?

The private sector has a key role to play. Businesses have the resources, ingenuity and ability to scale to lead the vanguard of economic and environmental progress around the world.  

We need to develop heroes and champions in the corporate sector who support low-carbon and circular ways of working to create a cleaner, greener, sustainable planet.

Which is why we founded We Mean Business in 2014, and subsequently launched the Science Based Targets initiative (SBTi) so as to set a voluntary global standard for companies to establish their net zero emission targets. SBTi is a key methodological instrument that sets greenhouse gas emissions reduction targets in line with what science tells us is needed to keep global heating below catastrophic levels. 

We know that companies with approved targets significantly reduce emissions much faster. We also know that in view of this the demand for corporate climate target validation is growing exponentially.  In 2022, the SBTi validated 87% more companies than in the year before, in fact it was more than the entire seven years prior combined.

We celebrate the fact that corporate climate action is accelerating, and it must: the human and economic costs of climate change are simply unacceptable. The letter signed by CEO’s earlier this week was an outstanding example of just how motivated many businesses are to play a central role in changing the status quo.

But a lot more needs to be done, we cannot rest on our laurels. Already, some challenges are being pushed into the future. While setting and progressing against scope 1 (direct emissions) and scope 2 (purchased energy emissions) reduction targets are quickly becoming a reality for businesses across all sectors and regions, scope 3 emissions targets, which are emissions outside of your direct control like those from your supply chain, remain a real challenge.

According to CDP, on average, scope 3 targets are 11.4 times larger than direct emissions. From data limitations to influencing suppliers, businesses have cited scope 3 as one of the biggest hurdles to setting and achieving science-based targets.     

SBTi’s supplier engagement targets commit a company to sourcing a certain percentage of goods and services from companies that have also set science-based targets. By engaging with these compliant suppliers in the near-term, supplier engagement targets enable businesses to deliver on scope 3 goals ambition.

The benefits of supplier engagement targets extend beyond emissions reduction. They can also result in higher-quality supplier relationships, which will enhance efficiency, transparency, and resilience across the value chain. 

These efforts build credibility with investors, customers and employees who increasingly expect companies to take broader responsibility for impacts across their value chain.

Scope 3 can seem intimidating when it comes to decarbonization —but the supply chain might also be where companies can make the biggest impact. And when you extrapolate that across the thousands of companies taking action, the result could be the exponential growth of decarbonization around the world.  

Frontrunning companies have already taken impressive action and are stimulating their peers to go faster too. Sweden is leading the way by some measure. 6% of all companies with Net Zero targets validated by the Science Based Targets initiative are Swedish- 289 in total.

To put this in perspective, the country with the highest number of companies 722 in total with science-based targets  is the United Kingdom, with a population seven times the size of Sweden.

For everyone’s sake – we need all companies to take their targets more seriously and, most importantly, to take action more quickly. 

It’s an opportunity for Swedish companies to lead the way and have an impact far beyond the Nordics. 

Per Heggenes, CEO of IKEA Foundation

On Wednesday 22 November, this op-ed was published in Akutell Hållbarhet – Swedish companies can play a leading role in climate change mitigation.