In the spring of 2020, S Group published ambitious climate goals. According to the goals, S Group aims to be carbon negative (scope 1 and 2) by the end of 2025. In addition, we will reduce the amount of our greenhouse gas (GHG) emissions by 90 per cent (scope 1 and 2), compared to the level of 2015, by the end of 2030.
There are many new and difficult-to-understand terms that are related to climate change and GHG emissions. Below, you will find a short introduction to key words and practices. We hope that it clarifies what climate work is all about.
Key terms:
1. Carbon negativity
In practice, being carbon negative means that we capture more carbon from the air than we release into the atmosphere. Thus, our operations reduce the atmospheric carbon atmosphere, and our final impact on the amount of carbon dioxide is subtractive, i.e. negative.
To achieve this goal, it is generally necessary to both heavily reduce emissions from our own operations and use carbon offsetting, such as nature’s own carbon capture or, alternatively, technologies that remove carbon dioxide from the atmosphere.
2. Carbon neutral and emission-free
When a company creates no carbon dioxide emissions, it is considered carbon neutral. Carbon-neutral operations do not change the carbon content of the atmosphere as the amount of carbon dioxide emissions is zero. In other words, the operations are emission-free.
3. Carbon emissions/greenhouse gas emissions
These terms are used when talking about greenhouse gases that cause climate change. In addition to carbon dioxide, greenhouse gases also include methane and ozone. Refrigerants in refrigerators are also strong greenhouse gases.
As different greenhouse gases have a different impact on the climate, we have to the convert the other greenhouse gases to carbon dioxide equivalents (CO2e) in order to find out their total impact.
4. Carbon offset / Compensation
a: Carbon offset carried out by the entire S Group or an individual company
Carbon offset is related to our goal of being carbon negative in our own operations (scope 1 and 2). After we have reduced our emissions, there might still exist a carbon load from, for example, the production of district heating. Carbon offset is a reduction in emissions made to compensate for emissions made elsewhere S Group always aims for carbon negativity in its compensation, which means that emissions are overcompensated.
In practice, carbon offsetting is used to increase carbon storage (e.g., through land restoration or the planting of trees) elsewhere to compensate the amount of emission that our operations have created.
b: S Group offers compensation to consumers
In the future, we might offer a service that enables the consumer to the carbon dioxide emissions created by their consumption, either for one product or all their consumption. These emissions are not included in the emissions created by S Group’s own operations, which is why we might offer the carbon offset as a voluntary service that the consumer pays for.
Some of our suppliers have already compensated the carbon footprint of their products, so the product is carbon neutral already when the consumer buys it.
5. Overcompensation
We talk about overcompensation when we want the compensated amount to be higher than required by carbon neutrality. Overcompensation helps us ensure that the results of our own operations are carbon negative, i.e. that we remove more carbon from the atmosphere than we produce.
6. National or international compensation?
For now, the carbon sinks in the Finnish forests are included in the Finnish government’s national calculation and carbon balance. Therefore, companies cannot use them to offset for their emissions, because this would mean that the created emission unit is used twice (so-called double counting), and not enough carbon dioxide would be captured from the atmosphere.
Companies can nevertheless commit to a climate act of increasing the amount of domestic carbon sinks and support Finland’s national emission goal in this manner. However, these acts cannot be used to offset carbon emissions in the manner required by S Group’s climate goals.
International compensation initiatives are certified and confirmed by third parties, and the emission units they create are counted and used only once. This guarantees that the activities capture the company’s own carbon emissions. S Group’s climate goals state that it must be possible to verify the compensated amount in such a manner that the measures truly capture enough emissions.
7. Carbon handprint, positive carbon handprint
A carbon handprint refers to a positive climate impact created by the operations or a product. A positive handprint can refer to, for example, a company is feeding waste heat from refrigerators into the general district heating network and reducing the need for other heat in the area.
8. Carbon footprint
A carbon footprint will typically reveal the amount of emissions created by the operations or a product with certain limitations. The carbon footprint of, for example, supermarket includes the emissions created by its construction, operations and closing of the operations.
9. Emission-free electricity versus electricity produced with renewable energy sources
Emission-free electricity is produced with either renewable or emission-free energy. Solar and wind power are examples of renewable and emission-free electricity, while nuclear power is an example of emission-free electricity.
10. S Group’s goals in the production and consumption of electricity
S Group’s goal is to use only renewable electricity by the end of 2030. In addition, we have promised that the electricity we use during the transition period is at least emission-free.
In practice, we have already reached the goal level: in 2020, all the energy we use was produced with renewable energy, and its origin was verified with a guarantee of origin.
S Group produces electricity for its operations with both wind and solar power. Our own renewable energy covers approximately 50 per cent of our electricity consumption; the rest we buy from the market. The amount of own production will rise significantly this year.
11. Guarantee of origin of electricity
Guarantees of origin of electricity verify that the consumed electricity is renewable. The guarantee of origin of electricity refers to an electronic document that is proof for the end user that a certain amount of electricity is produced with a certain source of energy. Mechanisms related to the origin of electricity is regulated by legislation (Act on Verification and Notification of Origin of Electricity).
S Group currently acquires a guarantee of origin of electricity for all electricity that is consumed within the group. This means that all electricity that we consume is produced with renewable energy.
12. Carbon sink
A carbon sink is any process, activity or mechanism that removes carbon dioxide from the atmosphere. For example, plants capture carbon dioxide as they grow, i.e. they function as a carbon sink for as long as they grow. As they decay, they return carbon into the atmosphere, which makes it the opposite of a carbon sink, i.e. a source of carbon.
13. Carbon storage
Carbon storage is different from a carbon sink. For example, plants create a carbon storage, but the size of the carbon storage can change. As plants grow, they function as a carbon sink and, once the growth ends, the plant is still a carbon storage even though the size of the carbon sink is no longer growing.
14. The life cycle of a product or activity, life-cycle assessment
A life-cycle assessment is a method that examines a product’s or service’s environmental impact from cradle to grave. A life-cycle assessment acknowledges various types of environmental impact, one of which is the carbon footprint.
15. Carbon intensity, emission intensity?
Carbon intensity refers to the greenhouse gas emissions created by the operations in relation to, for example, the company’s turnover (€/tCO2) or the produced energy (tCO2/MWh).
S Group’s responsibility review discloses the emission intensity of our operations in relation to sales and the gross area of our properties. In addition to electricity and heating, the emissions also include emissions created by refrigerant leakage.
16. Specific emission
Specific emission contains emissions created per each produced unit of energy (electricity and heating). The amount is often announced as gCO2e/kWh or kgCO2e/MWh.
17. Coverage of S Group’s climate goals?
The climate goal for S Group’s own operations includes emissions reductions targets from electricity, heating, and refrigerant leakages. The goal does not include emissions from, for example, transport, products we sell, packaging or wastage as their emissions are counted towards other parties according to internationally agreed calculation models.
S Group’s goal is to be carbon negative (scope 1 and 2) by the end of 2025. This means that, by then, we will reduce more carbon dioxide from the atmosphere than we produce from our own operations. In addition, we will reduce our GHG emissions by 90 per cent by the end of 2030.
18. What do we hope for from our partners?
In our Big Deal campaign, we have challenged our partners—that is, suppliers and service providers—to reduce emissions from their operations by one million tonne by the end of 2030. Already over 100 partners have accepted the challenge. Collaboration with our partners significantly increases the impact of our climate work.
Our external partners are responsible for S Group’s transports, so transport is not part of our emission reduction goal. Therefore, our logistics partner Inex Partners has set its own emission reduction goal for its contract partners that take care of distribution. According to the goal, emissions from transport will be reduced by 20 per cent by the end of 2025.
Reducing food waste is also part of minimising emissions. We are on track to halve food waste by the end of 2030.