Assessment of the climate impact and climate objectives of the private sector in Belgium

Oxfam-Solidariteit (hereafter OS or Oxfam), non-governmental organisation for humanitarian assistance and development aid, launches an Invitation to Quote (IQ) for a study on the climate impact of the private sector in Belgium.

The quote must arrive at latest on 31 August, midnight CET and stay valid until 11 September, midnight CET

1. 1. Objective

The objective of the study is to calculate and assess the climate impact of large companies in Belgium (from the point of view of carbon footprint, carbon intensity in relation to financial results and from the point of view of climate trajectories). The final objective of this study is to highlight the need to engage the private sector in the climate transition as well and to formulate policy recommendations in this respect.

 

1. 2. Background

IPCC special report on 1.5 confirmed the importance of limiting global warming to the Paris target of 1.5 to avoid irreversible catastrophic impacts. No amount of adaptation can compensate for the terrible consequences of failing to hit this goal. Furthermore, IPCC special report on Climate Change and Land made it clear that carbon sequestration at scale can have enormous consequences for food security and people living in poverty. Measures therefore need to concentrate first and foremost on reducing emissions at the source. To achieve this, climate action cannot be limited to changing individual behaviours. It needs to target those who are benefiting the most and have a historical responsibility for the climate crisis, big businesses and multinationals. Governments need to design and enforce measures to make sure that private sector strategies remain in line with the goals of the Paris Agreement, as agreed at COP21.

In 2021, parties reaffirmed during the COP26 that the private sector and financial actors have a role to play in the energy transition. Oxfam has raised the question of what constitutes genuine corporate climate action – which must include setting up ambitious and science-based targets. The recent IPCC assessment report on mitigation provides evidence on the role of taxation schemes in reducing carbon emissions and fostering low-emissions technological innovation. It also indicates that only 20% of global GHG emissions were covered by carbon taxes or emissions trading systems, and that coverage and prices have been insufficient to achieve deep reductions.

 

Meanwhile, the tax system in Belgium provides some large companies with the means to lower their effective tax rate on profits or revenue. The global trend towards lower corporate taxes has been observed at least since the 1980s, particularly in rich countries. In addition, opaque tax havens with very low tax rates and aggressive tax competition between countries lead to a race to the bottom in corporate taxation. Recent developments in international taxation agreed at the OECD level (the introduction of unitary and minimum taxation of large multinationals) are, however, insufficient at this stage to definitively halt this trend. Every year, this situation deprives public authorities of substantial revenues that could be invested in climate action (both for mitigation and adaptation, as well as source for their commitments on international climate finance and loss & damage for vulnerable countries).  For example, according to Oxfam's computations, Belgium would have to budget between USD 190 and 310 million each year to comply with the Global Climate Fund's funding in an equitable way.

As Oxfam we call for large corporations to publish their (scope 1, 2 and 3) greenhouse gas emissions (in absolute value) and formulate transparent reduction yearly targets in line with the Paris Agreement, with an intermediate climate goal in 2030 of at least 65% of reduction for EU countries with a view to reach zero emissions by 2040. The company should also disclose an investment plan to demonstrate that they are putting the means to reach their goals[1].

Voluntary actions are not sufficient: unilaterally deciding on emissions’ reduction objectives will not take us on a common trajectory that is compatible with 1.5°.  Research in the EU on 1000 companies showed that only 13.9% have adopted science-based targets that are aligned with the Paris Agreement. Furthermore, Oxfam’s report on net zero emissions shows that current net zero strategies could require a surface of 5 times India to compensate for emissions. Public regulation is needed to solve a common good problem.

 

• 1. 1. Annexes to be provided after signature of a contract
• Previous Oxfam research
• Available data from BE and other EU administrations
• Relevant studies from other NGOs:

 

1. 3. Research questions

Overall : What is the climate impact of the largest companies in Belgium ?

1. Who are the largest private sector economic actors in Belgium (ideally 20 to 25 companies)?    

Selection of a sample of 20 to 25 companies. Companies that have been present in the BEL20 for at least 5 years over the last 10 years and a few companies relevant to the study. (for example: public transport, energy sector, airlines).
 

2. What is the current carbon footprint of these companies (scope 1, 2 and 3)?
   1. What is their annual greenhouse gas emissions in tonnes of CO2 equivalent?
   2. What is their carbon intensity (annual greenhouse gas emission in tonnes of CO2 equivalent per million euros of turnover – excluding financial sector)?

 

3. What is the evolution of the carbon footprint of the companies studied over the last 5 years?

We want to have a temporal overview per year of the annual greenhouse gas emissions and carbon intensity of companies over the last 5 years.     
 

4. What is the current companies’ climate trajectories in degrees (based on latest IPCC scenarios)?

We want to know what climate trajectory each company is on. For each company, determine whether it is on the 1.5° trajectory or on higher trajectories. If a company is on a higher trajectory, identify which trajectory (e.g. between 2° and 2.5°, between 3° and 3.5°, etc.)

 

5. Are the current carbon footprint trends of the large companies studied in line with the trajectory to limit warming to 1.5°C (peak by 2025, -55%/-65% by 2030, neutrality by 2050/2040)?

In this section, we want to assess what is the trajectory over the last years of the carbon footprint of the companies studied and see if these trajectories are in line with 2 scenario of the 1.5°c targets.           
 

The first scenario foresees a peak by 2025, -55% by 2030 and neutrality by 2050. The second scenario foresees a peak by 2025, -65% by 2030 and neutrality by 2040.

 

6. What would be the ideal carbon footprint reduction trajectory of the companies to meet the goal of limiting global warming to 1.5°C (-55%/-65% by 2030, neutrality by 2050/2040)    

For each company, the aim is to determine the ideal carbon footprint reduction trajectory, which is in line with IPCC evidence: global emissions peak by 2025 (IPCC AR6WGIII), -65% by 2030 (IPCC SR15). (Also: Coal, oil and gas use, without carbon capture and storage, must fall 95%, 60% and 45% below 2019 levels by 2050 according to IPCC AR6WGIII).       

 

7. Which companies are close to the ideal trajectory? Which companies are far from or in contradiction with the ideal trajectory?     

Based on the above data, this section aims to assess which companies need to make the greatest efforts to adapt their carbon footprint and which companies are already close to the ideal trajectory.

 

1. 4. Requested profile

The consultant should have strong data analysis and research skills, excellent economic knowledge and experience in private sector climate impact assessment and evaluation. A strong background in European, Belgian policy frameworks and international climate standards is also required.

• Good knowledge of climate change topics (especially corporate carbon footprint)
• Strong experience in analysis and evaluation of climate objectives.
• Proven analytical, synthesis and writing skills in English, French and/or Dutch.
• Ability to write for policy makers and the general public.
• Professional knowledge of French and/or Dutch is an asset.

 

1. 5. Deliverables

Deliverables will have to fit OS quality standards.

• A final report with interpreted data in English, French or Dutch
• Diagrams and tables to illustrate the results.
• A methodological note in English on 1) the way to select the companies studied, 2) how the emissions of each company are calculated 3) how the carbon intensity was calculated, 4) how climate trajectories were calculated.

 

1. 6. Calendar

14 October: methodological guide

28 October: draft version of the documents and follow up meetings

21 November: final report

 

[1] Oxfam position (Corporate Governance Policy Compendium, 2021)