Climate neutrality
„We have the drive that it takes“
After more than two years of Corona, the Ukraine war has been going on for more than two months. Climate change, the continuing global warming or the steady advance of Earth Overshoot Day seem to fade into the background. But, global challenges like climate change remain and must be solved sustainably and over the long term. On March 1, Covestro presented its ambitious climate neutrality targets as part of its annual press conference. Lynette Chung, Covestro's Chief Sustainability Officer, explains how these fit into Covestro's vision of the circular economy, why scope 1 and 2 are being addressed first, and what concrete steps have already been taken to address them.
The world is changing rapidly. In 2020, Covestro announced its vision of circular economy. In 2021, its new corporate strategy “Sustainable Future”. Now climate neutrality goals. How does this all fit together?
Lynette Chung: "Within the last few years, a lot has happened, in the world and at Covestro. Megatrends such as climate change, population growth, resource scarcity, environmental degradation, remains as high as ever on the agenda with clear visible impacts on our planet and business. This prompts a rethink of business models and the way we do business. Linear patterns have had their days and it is clear that those patterns are unsustainable. We at Covestro announced in 2020 our ambitious vision to become fully circular. The circular economy as global model is a solution to these challenges.
Coupled with our vision to become fully circular, we also address climate change as one of the biggest challenges of our times. Creating a circular economy is key to address climate change. We thus drive holistically the goal of climate-neutrality with our circularity ambitions.”
Within our climate goals, we focus on scope 1 and 2. What does this exactly mean – and why haven’t we tackled everything at once?
The chemical and plastics industry is one of the largest greenhouse gas emitters. At the same time, our products are used everywhere and play an important role for daily life and sustainable solutions in important future areas, such as climate-friendly construction, electromobility and renewable energy. The industry holds the key to addressing many sustainability challenges. But, it is important that the industry plays its role in reducing its greenhouse gas emissions, while developing solutions and innovating for a more sustainable, circular economy.
When we look at the greenhouse gas emissions, we distinguish between scope 1, emissions from our own production, scope 2, emissions from external energy sources, and scope 3, indirect greenhouse gas emissions from upstream and downstream processes in the value chain.
Why focussing on scope1 and 2 first? Well, we took our time to develop the very ambitious goals: reducing emissions from our own production, scope 1, and emissions from external energy sources, scope 2, to net-zero until 2035. It was important to have a clear roadmap of measures to support us in this ambitious endeavour. Covestro employees in production, technology, engineering, energy procurement, HSE and sustainability are already working intensively on site transformation activities and site-specific roadmaps, focusing firstly on the major sites.
The fact that we already last year achieved our previous 2025 climate goals makes us very proud and convinced that we can deliver on these new goals.
But we will not stop there: For us, scope 1 and 2 is a starting point. The next step will be scope 3 targets, which will connect closely to our circular economy activities. We are confident that we will come up with scope 3 targets and also further circularity milestones in 2023.
Could you become more precise how circular economy and climate neutrality go hand in hand?
We are already successful and have many activities running to promote our circular economy agenda. Going forward we will increasingly emphasize and illustrate how the circularity and climate-neutrality agenda go hand in hand.
As an example, shifting to alternative raw materials helps us to break away from fossil resources, and we ensure at the same time to reduce the overall climate impact from our raw materials. Already today, we offer alternative-based products with a lower carbon footprint, such as climate neutral MDI, Polycarbonate and low-carbon footprint TDI. In the long run, we want to offer every product in a climate neutral version.
Our efforts in innovative recycling, value chain and cross-sector partnerships and focus on renewable energy will support increasing market offerings and closing the carbon loop in the mid and long-term – ultimately delivering to both circularity and climate goals.
The four topics on the path of the transformation to circular economy contribute all to climate neutrality. From alternative raw materials to innovative recycling, from cross-sector-cooperations to renewable energy.
I am proud and grateful to be part of Covestro’s transformation journey, seeing the many activities and extraordinary contributions from across the company and colleagues to drive the transformation forward, while recognizing the complexity and immensity of this undertaking. This makes me confident and shows: We have the drive that it takes to master the climate neutrality and circularity challenges.”
You said that Covestro needs partners and strong partnerships. Could you be a little more specific here?
Lynette Chung: “Indeed, this deserves to be emphasized: The way to a global circular economy cannot be done alone: we need partners to build on that vision as various players are involved. Policymakers, business and society must work together to achieve ambitious climate goals and to create a circular economy. And importantly, market and customer acceptance is key. Customers need to understand and use circular, low-carbon products and be part of the transformation.
We already have several examples to illustrate our approach. Let me give you three examples:
- We have strategic supplier partnerships for the supply of renewable raw materials, for example with Neste, Shell etc.
- With Genomatica we have teamed to be the first to successfully produce significant volumes of a plant-based version of the chemical raw material HMDA.
- In an EU-wide project, (the “Circular Foam” project) for example, we are also researching how PU rigid foam, used in e.g. insulation materials, can be recycled
In a circular economy, we can protect the climate, nature and resources and achieve sustainable growth that respects planetary boundaries. Covestro and the chemical industry are part of the solution. How we at Covestro are working across the different Business Entities to make progress towards our ambitious climate goals is something we will be sharing with you in the coming months. We look forward – you can stay tuned.