Climate concept & its importance in water
The water industry's members have solutions for a more sustainable water and sanitation industry already today and are actively working to ensure tomorrow's innovative power for the climate. Here we describe a number of concepts that are central to sustainability and climate work.
ESG – Environmental, Social & Governance
ESG highlights various aspects of the concept of sustainability, which can include environmental, social and corporate governance aspects, and is an important concept in the field of sustainability.
• Environmental aspects:
These are about how companies deal with environmental issues. This includes everything from carbon emissions and energy efficiency to water consumption and waste management.
Example: Reducing climate impact by using renewable energy or reducing waste.
• Social aspects (Social):
These focus on how companies impact people and society. This includes working conditions, diversity, human rights and community engagement.
Example: To promote gender equality in the workplace or support the local community through charitable projects.
• Corporate governance aspects (Governance):
These are about how companies are governed and managed. This includes transparency, ethics and responsibility towards shareholders.
Example: Having an independent board or clear reporting of financial information.
ESG is not just a trend, but a necessity for long-term success. Companies that integrate ESG aspects into their business strategies can create value for shareholders, society and the environment. It is a way to balance financial profitability with social responsibility and environmental concerns.
Greenhouse gas emissions (Greenhouse Gas, GHG)
GHG emissions, or greenhouse gas emissions, refer to the release of gases that contribute to the greenhouse effect, leading to global warming and climate change. These gases trap heat in the Earth's atmosphere and include both naturally occurring and anthropogenic (human-made) gases.
Scope 1-3 emissions according to the GHG Protocol and ISO standard 14064 mean:
• Scope 1: These emissions are direct and arise from the organization's own operations. Examples include fuel combustion and emissions from vehicles owned or controlled by the organization.
• Scope 2: These emissions are indirect and arise from purchased electricity, steam, heating and cooling. This includes emissions that are not directly linked to the company's own operations.
• Scope 3: This category includes other indirect emissions that the organization does not own or control. This includes emissions from purchased materials, product use, waste management, business travel, and more.
What does Net-Zero and carbon neutrality mean?
Carbon neutrality aims to achieve net-zero carbon emissions to prevent or reduce global warming. This means that an organization or business either reduces its emissions to zero or compensates for them by removing an equal amount of carbon dioxide from the atmosphere.
• Carbon neutral: An organization undertakes to evaluate the CO2 emissions it produces. This is combined with finding ways to reduce these emissions and compensate for them by reducing emissions elsewhere or by removing an equal amount of CO2 from the atmosphere. This balancing is called carbon offsetting and can involve planting new trees, investing in renewable energy, or using technologies such as bioenergy with carbon capture and storage.
• Net zero: On the other hand, net zero means that a company reduces its absolute emissions across its entire supply chain to support the goal of limiting global temperature increase to 1.5 degrees Celsius, as agreed at the Paris climate summit in 2015. Net zero is considered the “gold standard” for corporate climate action. It means that all greenhouse gas emissions, not just CO2, are reduced to zero or fully offset.
Corporate Sustainability Reporting Directive, CSRD
• CSRD is an important EU directive that aims to create the best conditions for the EU to meet its Net Zero goals by 2050.
• CSRD requires that ESG (Environment, Social and Governance) information is available to investors. By raising the quality requirements for sustainability reporting to the same level as financial reporting and requiring external review, the risks of green or social washing are reduced.
• Through CSRD, ESG is also linked more clearly to companies' business models and strategies.
• Through CSRD, companies' sustainability communication moves from talking about how they work on sustainability and what effect this work has had, to actually being able to measure the results of their sustainability work in a standardized way.
• New requirements are now being imposed on reporting of scope 1 and 2 also on scope 3, which means that many companies now have to streamline data quality and reporting processes.
• As CSRD requires transparency in sustainability reporting, it is also important to consider whether the information presented is in line with how you want to appear as a company. CSRD makes it easier for investors to compare companies' sustainability performance, which can have a major impact on companies' access to capital.
Which companies are covered by CSRD and when?
When the directive is fully implemented (financial year 2026), more than 50,000 companies in the EU will be covered by the CSRD, of which approximately 4,100 are Swedish companies. Different companies meet at different times:
• January 1, 2024 (reporting 2025) for companies/groups that are large, of public interest and with more than 500 employees
• January 1, 2025 (reporting 2026) for large companies/groups
• 1 January 2026 (reporting 2027) for small and medium-sized enterprises listed on a regulated market and small and non-complex credit institutions and captive companies
LCA (Life Cycle Assessment).
European Platform on LCA | EPLCA (europa.eu)
• Life-cycle assessment (LCA) is a method for achieving a holistic picture of the total environmental impact of a product's life cycle, from raw material extraction, through manufacturing processes and use to waste management, including all transport and all energy consumption in between.
• Life cycle assessments can be done on all human activities and products such as food, packaging, electronics, fuels, transportation, etc.
• By finding out at which stage in the production chain the environmental impact is greatest, companies can direct their environmental efforts in the right direction and create an effective environmental management system.
• There is also support and methods for using LCA results for, for example, product development and marketing.
• There is an internationally broad and well-established consensus behind the standards for life cycle assessment developed within ISO (ISO 14040 series).
The ISO 14040 series includes:
• ISO 14040 Environmental Management – Life Cycle Assessment – Principles and Structure
• ISO 14044 Environmental management – Life cycle assessment – Requirements and guidance
• ISO/TR 14047 Environmental management – Life cycle assessment – Examples of application of ISO 14042
• ISO/TS 14048 Environmental management – Life cycle assessment – Data documentation format
• ISO/TR 14049 Environmental management – Life cycle assessment – Example of application of ISO 14041 for definition of objectives and scope and inventory analysis
Environmental Product Declaration, EPD
EPD is an abbreviation for Environmental Product Declaration and is a type of environmental declaration and describes a product's environmental performance from a life cycle perspective. The term “EPD” is also commonly used in Swedish, alternatively translated as environmental declaration (“type III”) or environmental product declaration.
An EPD is based on a completed life cycle assessment (LCA) but also contains other supplementary information about the declared product or service. The main differences between an EPD and a general LCA study are:
• Use of common calculation rules (PCR, Product Category Rules)
• The results are always presented publicly in a predefined reporting format
• Verification of the EPD document and underlying calculations
• An EPD is produced and published within the framework of a program operator that follows the international standard ISO 14025. To find an EPD, you therefore need to visit their EPD database or equivalent, which is available via the respective website. In some software or calculation tools, EPD information is also already imported.
In-depth information & links:
Corporate sustainability reporting (europa.eu)