Climate mitigation

In 2015, the Paris Agreement first established a common ambition to take urgent action on GHG emissions to limit average temperature increases to well below 2°C. Later in 2018, the Intergovernmental Panel on Climate Change (IPCC) provided a clear and compelling case to redouble efforts to limit warming to 1.5°C. Our fair share of this ambition requires our emissions to reach net-zero by 2050 with a rapid acceleration of the rate of our emission reductions over the coming decade — these are specified in our net-zero commitment and Science Based Targets (SBT).

Aligning our climate approach with science

We were one of the first companies to align our efforts with the latest science as presented in the IPCC Special Report ‘Global Warming of 1.5°C’ by setting a long-term pathway to reach net-zero GHG emissions across our operations and value chains by 2050. Our Science Based Targets are the intermediate step to achieve this goal, supported by our ambitions regarding renewable electricity and energy efficiency, and by working intensively with our key suppliers through our CO2REDUCE program. This requires transforming our operations and value chains.

We are working with long-term innovation roadmaps that will bring us as close to zero emissions as possible in the coming decades. This includes investments in a portfolio of solutions that can help our customers to do the same. We will also eventually deploy permanent carbon removals to neutralize any residual emissions to reach our net-zero ambitions. These removals will need to meet the highest quality criteria and social and environmental safeguards. Our net-zero activities are guided by the SBTi NetZero Standard and Business Ambition for 1.5°C commitment framework.

“We continue to show good progress on our climate targets. Our climate action plan identifies the key measures that are important for DSM, including our emissions reduction programs for our own operations and supply chain, and steps to improve our resilience. Our Food System Commitments demonstrate the impact of our products on society. Beyond our own value chain, accelerating global climate action is a key pillar of our agenda.”

Business measures supporting our climate approach

In support of our ambition to substantially reduce our carbon footprint, we have introduced key measures which we apply to all growth projects. Since 2019, business growth projects must either be GHG-neutral or else be compensated for within the same business.

In addition, to encourage investments in low-carbon and carbon-free technologies, we use an internal carbon price (ICP) in the valuations of key investment projects and in the Profit and Loss statements of the Business Groups for internal management reporting. This increases the visibility of, and encourages accountability for, the impact of carbon emissions on the business. In 2021, we increased the ICP from €50/t CO₂eq to €100/t CO₂eq to better reflect the updated insights into the actual price of CO₂ to society. This price is also within the ranges of the scenarios we use for assessing climate transition risks.

Ownership of climate actions is at Executive Committee level

The DSM climate action agenda brings together our key climate actions addressing the three pillars of improve, enable and advocate. The progress of the agenda, including the implementation of the Taskforce on Climate-related Financial Disclosures (TCFD) recommendations, the GHG reduction program, our portfolio developments and efforts to advocate for accelerated transition with partners, are managed and actively reviewed by the Executive Committee several times a year.

Concrete actions within the agenda are owned by individual Executive Committee members including the development of our internal carbon price, advancing our low-carbon portfolio, oversight of our climate advocacy, and engagements with climate-focused investors. Through the agenda, we ensure that the business opportunities related to mitigation and adaptation, and the identified transition and physical risks of climate change, are addressed. Our climate change strategy received an A rating from CDP in 2021.