How can carbon negative unlock positive value for the planet?

10 minute read 25 Jan 2021
EY Global
By EY Global

Ernst & Young Global Ltd.

Local contact

Christin Bøsterud

Partner, Nordic Chief Sustainability Officer, EY Norway

Christin is a lawyer with a PhD in ethics. Committed to forging visibility of women, especially in leadership positions. Farmer and equestrian.

10 minute read 25 Jan 2021
Related topics Sustainability Sustainable development goals Climate change and sustainability Climate-related reporting Long-Term Value
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To help build a better working world, EY will be carbon negative in 2021 and net zero in 2025.

Since this article was published, EY is now carbon negative. Find out how we are progressing against our carbon ambition here.

In brief
  • Action is urgently needed to limit global carbon emissions. As a business, we believe we have a responsibility to go further, faster.
  • We have set targets to significantly reduce EY’s absolute emissions and will remove and offset more carbon than we emit, each year — making EY carbon negative in 2021 and net zero in 2025.
  • Our ambition reflects the changing expectations of EY stakeholders, especially EY people, for building a better working world and creating long-term value. 

Climate change is one of the defining issues of our time. The science is conclusive: we face significant and irreversible human-made changes to the climate. We know action is urgently needed if we are to limit the global temperature increase to 1.5°c above pre-industrial levels, in line with the Paris Agreement. Doing so is the only way we can avert catastrophe and protect the planet for future generations.

As business is a source of the world’s carbon emissions, we believe we have a responsibility to act. Collectively, business has the financial resources, technological capabilities, global reach and innovative capacity needed to find the solutions for a low-carbon future and to avoid irreversible damage to our planet. We have the means and the responsibility to act together now.

Many businesses are setting carbon reduction targets, making progress toward net zero, and removing greenhouse gas emissions from the atmosphere. However, there is growing evidence that these current commitments aren’t enough.

EY’s purpose of building a better working world compels us to go further, faster. EY will therefore become carbon negative in 2021, and net zero in 2025.

We will achieve this by significantly reducing our absolute carbon emissions, and then removing or offsetting more than the remaining amount of our emissions, every year.

We will reduce our absolute emissions by 40% across Scopes 1, 2 and 3 by FY25, against an FY19 baseline, consistent with a 1.5°c science-based target, approved by the Science Based Targets initiative (SBTi), enabling EY to reach net zero in FY25.

Our ambition to become carbon negative in 2021 builds on our 2020 achievement of carbon neutrality and will help us create long-term value for our stakeholders.

We believe that becoming carbon negative in 2021 and net zero in 2025, reducing our emissions in line with a science-based target, is the right ambition to have.

Discover the seven actions in EY's carbon ambition:

EY will become carbon negative in 2021 and net zero in 2025 by:

  • 1. Reducing our business travel emissions, with a target to achieve a 35% reduction by FY25 against our FY19 baseline

    While we recognize that many EY services require an element of business travel, we also know that air travel is where they have the most significant negative impact on the environment, accounting for approximately 75% of our global carbon emissions in FY19.

    We will reduce these emissions by:

    • Continuing to encourage the use of virtual collaboration technologies that have helped EY teams to provide exceptional client service during COVID-19 
    • Using new tools and technologies that help EY people make better travel choices and encourage greener alternatives wherever possible.

    In achieving this 35% reduction by FY25, EY will avoid emitting more than 2m tons of CO2 from FY19 to FY25.

  • 2. Reducing our overall office electricity usage, and procuring 100% renewable energy for our remaining needs, earning RE100 membership by FY25

    EY will be a fully accredited member of RE100 by FY25. RE100 is a global initiative that brings together some of the world’s most influential businesses committed to 100% renewable electricity. To achieve this target, we will reduce our office carbon emissions from electricity consumption to zero by FY25 by switching to 100% renewable energy.

    As a result of introducing innovative ways of working, since FY09 we have been able to reduce our real estate occupancy from 13.8m² per person to 7.6m² per person. By avoiding the use of 1.9M m² of space over the last decade resulted in a reduction of over 150k tCO2e, equivalent to the annual energy use of 17,830 homes or 380 million miles driven by average passenger vehicles.

    From 2020, our global Scope 3 emissions measurements have included those from our people working from home, reflecting our flexible working culture and trends in remote working, as well as changes resulting from the COVID-19 pandemic.

  • 3. Structuring our electricity Power Purchase Agreements (PPAs) to introduce more renewable electricity than EY consumes into national grids

    We have agreed Virtual Power Purchase Agreements (vPPAs) with several solar and wind farms. Through the arrangements we have in place a plan to add more than twice the amount of electricity we consume into the multiple national electricity grids from 100% renewable energy. By doing so we will offset our own office electricity emissions, reduce our total electricity costs, and play our role in decarbonizing the electricity generation sector.

    In 2019, Ernst & Young LLP (EY US) entered into a Virtual Power Purchase Agreement (vPPA) to finance and construct two large scale Texas wind farms to use 100% renewable electricity. In the UK, Ernst & Young LLP has also agreed its first zero-carbon Power Purchase Agreement with Lightsource bp, the largest solar developer in Europe. Each year, the two projects will generate roughly 510 GWh and 20 GWh respectively. This amounts to almost 50% more than the 256GWh of electricity than EY consumed globally in FY19.

  • 4. Using nature-based solutions and carbon-reduction technologies to remove from the atmosphere or offset more carbon than we emit, every year

    In December 2020 we launched a collaboration with South Pole, a profit-for-purpose organization which invests in nature-based solutions and technologies to remove and offset emissions.

    EY contributions through South Pole will help to preserve vital natural environments aligned with our global carbon footprint and contribute to renewable energy projects, through: 

    • Kariba Forest Protection in Zimbabwe, which prevents more than 3.5 million tonnes of carbon dioxide from being emitted into the atmosphere annually by preserving more than 780,000 hectares of forest
    • Guanare Forest Restoration in Uruguay, where the reforestation of degraded grasslands is improving soil quality and biodiversity

    Through this collaboration we are also investing in wind, solar and hydro projects, including the Renun River Hydro Project in North Sumatra and the Koru Wind Power Plant in Turkey.

    In addition to this, we will collaborate on high-impact, distinctive carbon-removal and -reduction projects with clients and broader ecosystem participants.

    How EY can help

    Climate and decarbonization

    The EY climate and decarbonization services help businesses respond to the physical and transition risks associated with climate change, as well as advise on how to operate in new markets and regulatory environments related to carbon and renewable energy.

    Read more

  • 5. Providing EY teams with tools to calculate, then work to reduce, the amount of carbon emitted in carrying out client work

    We recognize that executing client-facing projects results in carbon emissions and that many EY clients want to work together to reduce them. To do so, we will provide all EY teams with tools, including the EY Engagement Carbon Calculator, that enable them to assess and then reduce the amount of carbon emitted in delivering client work. 

    This will also enable EY project teams to share reduction efforts directly with clients. EY clients have told us that they would like to collaborate even more to reduce our collective impact on the planet and, by reporting on this, we aim to collectively achieve improved environmental and business performance.

  • 6. Requiring 75% of EY suppliers, by spend, to set science-based targets by no later than FY25

    We have set a goal for suppliers covering 75% of EY spend to have set an SBTi approved carbon-reduction target by FY25. We will collaborate with all suppliers to help them on their journeys to SBTi accreditation and the decarbonization of the products and services we procure from them. By working with suppliers and encouraging them to work with us, we will further multiply the impact of EY’s carbon negative position.

  • 7. Investing in EY services and solutions that help clients create value from decarbonizing their businesses and provide solutions to other sustainability challenges and opportunities

    The biggest difference we can make is to help EY clients on their journeys to decarbonize their businesses, creating value for all stakeholders from sustainable action, including financial value for their investors. We are going to increase investments in the services and solutions that will continue to make EY a global leader in sustainability.

    This includes a significant increase in the investments into our Climate Change and Sustainability Services capability, together with our Strategy, Consulting and Tax Service Lines. EY clients are increasingly asking for support in creating value from sustainability, accelerating their transition to a lower-carbon future and navigating the challenges and opportunities from the ESG (Environmental, Social and Governance) arena.

    We will increase EY investment into several of our key Alliances to help clients take advantage of the leading-edge technology solutions available today. We will also continue carrying out activities in numerous multi-stakeholder sustainability alliances: in work on metrics and reporting with World Economic Forum International Business Council, the creation and leadership of the S30, membership in the Alliance of CEO Climate Leaders and work with the UN Global Compact and the World Business Council for Sustainable Development. 

    We will also continue to invest in our people by equipping them with the skills and knowledge necessary to lead on climate action at home, at work, and in their delivery of exceptional client service.

    Last year, EY created two training programs with sustainability elements: the EY Tech MBA and the EY Badges program. EY Badges offers structured learning for EY people to earn accreditation in a range of subject domains, including a Badge in Climate Change & Sustainability. The EY Tech MBA by Hult International Business School enables EY people to navigate the technology, leadership and business challenges ahead. Individuals studying for the MBA build their own personal curriculum from a broad range of subject areas, including purpose, personal well-being, diversity and inclusion, and sustainability.

    How EY can help

    ESG and sustainability

    Integrate ESG and sustainability into business strategy, and improve and communicate performance to stakeholders with help from EY teams.

    Read more

The EY transformation to become carbon negative is coupled with a focus on supporting EY clients to do the same, allowing us to increase our impact beyond our own organization. By using our convening power to share our experiences, we will serve as a catalyst for change, collaborating with others to find solutions together.

Collaborating is essential in order to innovate and accelerate towards a more sustainable future. Every organization has a critical and positive role to play, and we’re inspired by those already driving sustainable change.
Carmine Di Sibio
Former EY Global Chairman and CEO

This ambition reflects the changing expectations of EY stakeholders, especially EY people. It is one of the ways we are delivering our purpose of Building a better working world and creating long-term value – by playing our part to combat climate change and protect the planet.

In the process of becoming carbon neutral in 2020 we kept asking ourselves what more we could do. The COVID-19 crisis cut our business travel emissions and EY teams were still able to provide exceptional client service. This gave us a new perspective on what a low-carbon future could look like and made us challenge the easy option of reverting to old habits as the world recovers.

We also saw momentum building around us, with businesses and entire countries setting net zero targets. But we knew that we had to go beyond this to make an even bigger impact and accelerate our own transition to a low carbon future. We wanted to make sure that we did so in a way that drove business performance, allowing us to create value and new opportunities from sustainability.

The 300,000 EY people around the world encouraged us to push ourselves further and become carbon negative. Being carbon negative will engage and inspire EY people, encouraging them to be more thoughtful and mindful about their impact on the climate while continuing to provide exceptional client service. It will also build EY member firms’ reputation as employers of choice, attracting talent who increasingly want to work for responsible businesses.

No organization can do this alone. We are proud to follow the paths of sustainability pioneers who have inspired and motivated us, and to work with like-minded organizations on this ambitious project going forward.

We will use our convening power to drive change beyond our own walls, leveraging our involvement with organizations and initiatives to shape policy and regulations. This includes our work with the S30, the World Economic Forum (including the WEF International Business Council), COP26, the UN Global Compact, the World Business Council for Sustainable Development, the Race to Zero campaign and many more. Through these collaborations, we will gain needed momentum in the movement towards low-carbon business and sustainability that protects and creates value for all.

  • Definitions

    Science-based target (SBT)

    A greenhouse gas reduction target to reduce an organization’s emissions in line with climate science and the Paris Agreement goal to limit global warming to 1.5˚C above pre-industrial levels.

    Carbon neutral

    The result of an organization removing and offsetting emissions equivalent to its carbon footprint each year.

    Carbon negative

    The result of an organization both reducing its emissions in line with its 1.5˚C SBT and investing in nature-based solutions and carbon technologies to remove and offset more carbon than it emits each year.

    Net zero. The point at which an organization has achieved its 1.5˚C SBT and removed its residual emissions from the atmosphere.

    Emission scopes

    Emissions are split into three categories by the Greenhouse Gas Protocol:

    • Scope 1: All direct emissions from the activities of an organization or those under its control
    • Scope 2: Indirect emissions from electricity purchased and used by an organization
    • Scope 3: All other indirect emissions from activities of an organization, excluding electricity

    For EY, scope 1 and 2 is largely related to office energy, while scope 3 is from business travel.

Building a better working world

Summary

EY will become carbon negative in 2021, and net zero in FY25. We will achieve this by significantly reducing our absolute carbon emissions, and then removing or offsetting more than the remaining amount of our emissions, every year.

Our new carbon ambition builds on our 2020 achievement of carbon neutrality and will help us create long-term value for our stakeholders.

About this article

EY Global
By EY Global

Ernst & Young Global Ltd.

Local contact

Christin Bøsterud

Partner, Nordic Chief Sustainability Officer, EY Norway

Christin is a lawyer with a PhD in ethics. Committed to forging visibility of women, especially in leadership positions. Farmer and equestrian.

Related topics Sustainability Sustainable development goals Climate change and sustainability Climate-related reporting Long-Term Value
Upvote