OCTOBER2022TechnologyIstheFastTracktoNetZeroCO2AIbyBCGCarbonEmissionsSurveyReport2022WemustactnowtolimitglobalwarmingSource:NASA’sGoddardInstituteforSpaceStudies.2.0°Crange:~450ppmToday415ppm1.5°Crange:~430ppm1960310ppmCO2concentrationintheatmosphere(ppm)0400250450800Year0600200400100012001400160018002000CO2AIBYBCGCARBONEMISSIONSSURVEY2022Our2022CO2AIbyBCGCarbonEmissionsSurveyrepresentsacontinuationofa2021investigationintowherebusinessesstandontheirnet-zerojourneySource:BCGanalysis.Note:Throughoutthisanalysis,greenhousegasemissionsaremeasuredincarbondioxideequivalents.CO2AIBYBCGCARBONEMISSIONSSURVEY2022Secondedition1,600+respondents40%+globalemissions18countries14industriesOur2022surveyconfirmsthatthebetteracompanymeasuresitsemissions,themoreitcanreducethemSource:CO2AIbyBCGCarbonEmissionsSurvey2022.Note:Wedefinerespondentswhohaverealizedmorethan50%oftheiremissionsreductionambitionashavingmadeasignificantreduction.Partiallymeasureinternal(Scope1andScope2)andexternal(Scope3)emissionsFullymeasureinternalemissionsFullymeasureallemissionsofrespondentswhopartiallymeasuretheirinternalandexternalemissionsdeclareasignificantreductioninthoseemissionsofrespondentswhomeasurethefullscopeoftheirinternalemissionsdeclareasignificantreductioninthoseemissionsofrespondentswhomeasurethefullscopeofalloftheiremissionsdeclareasignificantreductioninthoseemissionsCO2AIBYBCGCARBONEMISSIONSSURVEY2022ScopeofmeasurementAbilitytoreduce45%58%64%CorporationsrecognizethebenefitsofdecarbonizationSources:CO2AIbyBCGCarbonEmissionsSurvey2022;BCGanalysis.Morethan70%ofthosesurveyedforesee$1millionormoreinannualbenefitsfromemissionsreduction37%foresee$100millionormoreinannualbenefitsfromemissionsreductionCO2AIBYBCGCARBONEMISSIONSSURVEY2022ThelargestperceivedbenefitsareimprovedreputationandloweroperatingcostsSources:CO2AIbyBCGCarbonEmissionsSurvey2022;BCGanalysis.Note:Percentageofrespondentorganizations;respondentswerepermittedtogivemorethanoneanswer.PerceivedbenefitsfromemissionsreductionRESPONDENTS(%)CO2AIBYBCGCARBONEMISSIONSSURVEY202243Increasedrevenues54Improvedreputation54Loweroperatingcosts48Highervaluations40Localtaxationbenefits37AbilitytoattracttalentSources:CO2AIbyBCGCarbonEmissionsSurvey2022;BCGanalysis.Measurementremainsaleadingroadblock,withonlymarginalimprovementsinemissionsmeasurementsince2021CO2AIBYBCGCARBONEMISSIONSSURVEY2022RESPONDENTS(%)Internalemissions(Scope1andScope2)Externalemissions(Scope3)801010100PartialmeasurementComprehensivemeasurement81%10%9%2021surveyresultsPartiallymeasureinternal(Scope1andScope2)andexternal(Scope3)emissionsFullymeasureinternalemissionsFullymeasureallemissionsTotalFullyTosomeextentOrganizationsarenotyetmeasuringtheiremissionsaccuratelySource:CO2AIbyBCGCarbonEmissionsSurvey2022(N=1,602).Ourrespondentsestimatea25%to30%averageerrorrateintheiremissionsmeasurement,withanimprovementofapproximately5ppover2021CO2AIBYBCGCARBONEMISSIONSSURVEY202225%–30%Sources:CO2AIbyBCGCarbonEmissionsSurvey2022;CDPGlobalSupplyChainReport2021;BCGanalysis.Note:pp=percentagepoints.Scope3isstillchallenging:itaccountsforover90%ofemissionsbutisapriorityforonly12%oforganizationsCO2AIBYBCGCARBONEMISSIONSSURVEY2022Respondents(%)Reductionpriority(%)Emissions(%)Companiesthatmeasuretherelevantscopeandhavedefinedtargets(%)5788812925029Scope2Scope1Scope3–7pp–21ppInternalemissions(Scope1andScope2)Externalemissions(Scope3)TheCO2AIbyBCGmaturityindexmeasuresorganizationalmaturitythroughfourgeneralstagesofemissionsmeasurementandreductionSources:CO2AIbyBCGCarbonEmissionsSurvey2022;BCGanalysis.Note:Anorganization’smaturityscoreisdeterminedbytheaverageofvariousdimension-specificscoresbasedonsurveyanswersaboutemissionsmeasurement(exhaustiveness,accuracy,automation,andfrequency)andreduction(concern,targetsettings,equipment,andactualreduction).Acrossallorganizations,theaveragedimension-specificscoreis5.0.CO2AIBYBCGCARBONEMISSIONSSURVEY2022Stage1–Lagging·Poormeasurementexhaustivenessandaccuracy·Notargets,ortargetssettoalimitedscope·NoobviousreductionMaturityscore≤2.5outof10Stage2–Emerging·Limitedmeasurementexhaustivenessandaccuracy·Targetsarenotsystematicallyset·LimitedreductionMaturityscore>2.5to5outof10Stage3–Competent·Goodmeasurementexhaustivenessandaccuracy·Targetssetsystematically,atleastforinternalemissions·SignificantreductionMaturityscore>5to7.5outof10Stage4–Expert·Comprehensiveandaccuratemeasurement·Targetssetsystematicallyforallemissions·SignificantreductionMaturityscore>7.5outof10TheoverallCO2AIbyBCGmaturityindexscoreforallsectorshasimprovedmarginallysince2021,from4.7to5.0Sources:CO2AIbyBCGCarbonEmissionsSurvey2022;BCGanalysis.Note:Financialinstitutionsarethemostmaturesectorintermsofreducingemissionsinlinewiththeirambition.Becauseofrounding,notallbarcharttotalsaddupto100%.·Industrialgoodsandfinancialinstitutionsareattheforefrontofcarbonmaturity·Publicsectorandnonprofitorganizationsaretheleastmature,consistentwiththeirnonprioritizationofemissionsreductionCO2AIBYBCGCARBONEMISSIONSSURVEY2022Proportionoforganizations(%)791371330242838383837225145373544434321191613117ConsumerIndustrialgoodsFinancialinstitutionsEnergy4Insurance4HealthcarePublicsectorandnonprofitFront-runnersFollowersLaggardsMaturityscore202120225.15.54.95.24.34.95.25.04.04.73.64.23.43.9Stage1:laggingStage2:emergingStage3:competentStage4:expertWhatwouldaccelerateemissionsreduction?Sources:CO2AIbyBCGCarbonEmissionsSurvey2022;BCGanalysis.CO2AIBYBCGCARBONEMISSIONSSURVEY2022Policyincentives(e.g.,regulation,taxincentives)“Receivemorestatesupporttoinvestinrenewableenergy,suchastaxincentivesforthereductionofCO2emissions.”“Preciseemissionsstandardsandregulations,withwell-definedrewardsandpenalties.”Leadershipsupport“Fullsupportfromseniorleadershipandawillingnesstoallocatemorebudget.Immediatedecisionsandconcreteactions,tohelpusmovequicklyfromdeclarationstoactions.Nomoredelaysorextensions.”Adoptionofdigitalsolutions“ThebreakthroughenablerwouldbetheuseofdigitalandAItechnologiestoacceleratecarbon-emissionsmeasurementandreductionbysimulatingnewinputsandestimatingthepotentialdamage.”Organizationswithautomateddigitalsolutionsforemissionsmeasurementare…Sources:CO2AIbyBCGCarbonEmissionsSurvey2022;BCGanalysis.CO2AIBYBCGCARBONEMISSIONSSURVEY2022MorelikelytomeasureemissionscomprehensivelyMorelikelytoreduceemissionsinlinewiththeirambitions2.2x1.9xCO2AIbyBCGisasustainability-as-a-serviceplatformtohelpcompaniesmastertheirend-to-endnet-zerojourneySource:BCGanalysis.CO2AIBYBCGCARBONEMISSIONSSURVEY2022MeasureandreportReduceemissionswithyourorganizationCollaboratewithyourecosystemandshapesustainabilitywithinyourindustry(developedinpartnershipwithCDP)Developandreportasingle,accurateviewofemissionsIdentifyinitiativesandprojectimpactReducefootprintandtrackprogressCollaboratethroughoutthevaluechainDecideSources:CO2AIbyBCGCarbonEmissionsSurvey2022;BCGanalysis.Note:AfricaincludesEgypt,Nigeria,andSouthAfrica;Asia-PacificincludesAustralia,China,India,andJapan;EuropeincludesFrance,Germany,Italy,Spain,andtheUK;LatinAmericaincludesArgentina,Brazil,andChile;theMiddleEastincludestheUAE;NorthAmericaincludesCanadaandtheUS.Becauseofrounding,notallbarcharttotalsaddupto100%.Respondentsaredistributedacrossgeographies,industries,andorganizationsizesCO2AIBYBCGCARBONEMISSIONSSURVEY2022EMPLOYEES(%;NUMBER)Organizationsize1310100,001+281,000–2,500172,501–5,0005,001–10,00050,001–100,00010,001–20,00020,001–50,000111017811455155205277173159GeographyRESPONDENTREGION(%;NUMBER)321227AfricaAsia-PacificEuropeLatinAmerica124MiddleEast13NorthAmerica19542651219071208INDUSTRYOFOPERATIONS(%;NUMBER)IndustryEnergyPublicsectorandnonprofitConsumer(retail)Consumer(other)Consumer(packagedgoods)FinancialinstitutionsHealthcareOtherIndustrialgoods(automotive)Industrialgoods(chemicals)Industrialgoods(materialsandprocesses)Industrialgoods(other)InsuranceTechnology,media,andtelecommunications923109571010912667410486715684812811616563166232451861