Equipoise’s decarbonisation service powers MTVH’s net zero strategy and cuts costs 💰
A growing tide of corporate climate action
Following the 2015 Paris Agreement, we’ve seen a significant increase in governments setting net zero targets and organisations implementing decarbonisation strategies.
In fact, governments with commitments to reach net zero represent 88% of global greenhouse gas emissions and 92% of gross domestic product.
At the organisational level, 46% of companies on the Forbes 2000 list have set net-zero targets, a figure that has more than doubled since the end of 2020.
While it is encouraging to see organisations setting ambitious decarbonisation targets, many lack access to data on which to base their strategy.
That’s what Boston Consulting Group found in its annual carbon emissions survey, identifying that only 10% of companies are measuring their emissions across scopes 1, 2 and 3.
Organisations need accurate carbon accounting data to identify emission hotspots and prioritise reduction strategies. How can they reach net zero if they don’t know where they are starting from?
This particularly rings true for Scope 3 emissions. These are the emissions arising from the value chain, which are, on average, 11.4 times greater than those from an organisation’s operations.
Analysis from the CDP highlighting the importance of Scope 3 emissions
National decarbonisation targets can only be met if the organisations powering these reductions can make decisions based on accurate data.
A data-informed net zero strategy
With the United Kingdom setting its 2050 Net Zero emissions target, organisations are aligning themselves with these ambitions. Metropolitan Thames Valley Housing (MTVH) is one of them.
Owning and managing more than 57,000 homes, MTVH provides housing for people living in London, the South East, East Midlands and East of England.
Metropolitan Thames Valley homes at Clapham Park
MTVH has a strong social mission to provide affordable housing to its occupants, but it also wants to ensure this housing is environmentally sustainable.
As part of its Sustainable Action Plan, MTVH is committed to reaching net zero emissions by 2050. This strategy relies on three pillars:
Decarbonising its existing housing stock by assessing the environmental performances of its housing and making it more energy-efficient
Developing new low-carbon homes as they continue to build affordable homes for people to buy or rent
Building strategic partnerships with industry regulators, research groups and suppliers to achieve net zero
While a key focus will be aligning its existing and future housing stock with a net zero future, MTVH is also focusing on decarbonising its supply chain.
MTVH spends hundreds of millions of pounds on goods and services from over a thousand suppliers every year. To reach net zero by 2050, all suppliers must decarbonise.
Leveraging technology for Scope 3 decarbonisation
In its Sustainable Action Plan, MTVH set a target to accurately measure its supply chain carbon footprint, a required first step to improving its supply chain sustainability.
That’s why they partnered with Equipoise. Leveraging Equipoise’s technology and the Greenhouse Gas Protocol spend-based method, they were able to calculate emissions from procurement.
Equipoise’s emissions analysis revealed that MTVH’s Scope 3 emissions from purchased goods and services and capital goods were four times greater than their Scope 1 and 2 emissions combined.
Further data analysis through Equipoise’s interactive dashboards allowed MTVH to identify procurement categories with the highest greenhouse gas emissions per pound spent.
By identifying these emissions hotspots, MTVH’s procurement team can prioritise engaging the highest emitting suppliers and identify decarbonisation opportunities.
These actionable insights can accelerate their decarbonisation journey and ensure initiatives can be implemented where the potential impact is greatest.
Engaging in such a partnership makes sense from an environmental point of view, and MTVH has also been able to reap the financial benefits of emissions accounting.
The financial benefits of sustainability
Through its Sustainability Financing Framework, MTVH recognises the role sustainability can play in its funding strategy, from bank loans to the issuance of public bonds.
“By meeting sustainability targets to help fund our business, we can cut the cost of our debt, further build our financial strength and free up more funds to achieve our ambition of providing more affordable homes and supporting our residents and customers to live well.”
- Donald McKenzie, Director of Corporate Finance at MTVH
In 2020, MTVH and BNP Paribas agreed to a historic £50mn sustainability-linked loan, with the interest margin tied to MTVH’s achievement of greenhouse gas emission reduction targets.
“MTVH has demonstrated that funding structures, commercial strategy and the demands of the climate crisis need not be at odds.”
- Anne Marie Verstraeten, UK Country Head at BNP Paribas
With these reduction targets primarily focused on energy consumption, procurement emissions are playing a growing role, with investors demanding reductions in Scope 3 emissions.
Through its sustainable procurement policy and supplier emissions data, MTVH can set reporting requirements for its suppliers and demand that they improve their sustainability performance.
Being proactive with its Scope 3 decarbonisation strategy will undoubtedly enable MTVH to reduce its cost of capital for future funding and attract sustainability-oriented investors.
Connect with Equipoise to explore how you can measure your greenhouse gas emissions and identify emission reduction opportunities within your supply chain.
