Mastercard announced it is the first company in the payments sector to set science-based targets that support the fight against climate change.
Its plan to cut greenhouse gas emissions by 20 percent over the next eight years was approved by the Science Based Targets initiative (SBTi), a partnership between CDP, the U.N. Global Compact, the World Resources Institute and WWF. To be certified by SBTi, company targets must align with the global effort to limit temperature rise to “well below” 2 degrees Celsius.
Climate scientists agree the 2-degree threshold is essential to avoiding the worst impacts of climate change. World leaders wrote it into the landmark Paris climate agreement, but government action isn’t enough to get there. By themselves, national commitments associated with the Paris Agreement will only limit warming to 3.5 degrees Celsius this century, as Oscar-nominated filmmaker Josh Fox pointed out in a 2016 op-ed on TriplePundit. Private sector engagement is needed to fill the gap, which will only widen if the U.S. government sticks to its decision to pull out of the Paris Agreement.
To answer the call, top firms started setting science-based targets in advance of the 2015 U.N. climate talks, where world leaders finalized the agreement, but as of this year Mastercard joins fewer than 125 other companies to have their targets approved by SBTi. Its 20 percent goal uses a 2016 baseline and includes direct and indirect emissions, as well as those generated by electricity the company purchases.
“Being the first payments company to align their business strategy with the Paris Agreement, Mastercard is demonstrating its business leadership and positioning itself for success in the low-carbon economy,” Cynthia Cummis, director of private-sector climate mitigation at the World Resources Institute, said in a statement.
Mastercard achieved 100 percent renewable energy offset usage across all of its global offices last year, through a combination of on-site solar, renewable energy purchases and credits. The company said it will pursue green certification for future construction projects to further reduce direct emissions. All of its owned office campuses are already LEED certified.
For indirect emissions—by far the largest share of the company’s overall footprint—Mastercard dedicated a team to help global suppliers to quantify and reduce GHGs.
“Climate change is one of the biggest challenges of our time,” Kristina Kloberdanz, Mastercard’s chief sustainability officer, said in a statement last month. “This commitment highlights Mastercard’s determination to be a part of the solution.”
Mastercard first announced plans to pursue science-based targets at the start of this year—a move praised by Trillium Asset Management. “This target will propel the company to meaningful emissions reductions that are necessary for the planet, while also generating bottom line benefits,” the socially responsible investing firm predicted in January.
Trillium and the sustainability arm of Loring, Wolcott & Coolidge have been in talks with Mastercard since a 2016 shareholder proposal that called on the company to adopt time-bound emissions targets. Data increasingly shows that such targets are good for business as well a the environment: Companies with GHG reduction goals achieve an average of 9 percent better return on investment compared to their peers that do not, according to research from WWF and CDP.
SBTi-approved companies, which include the likes of Ikea, Unilever and Procter & Gamble, are already seeing the results. Nearly a third of companies with verified science-based targets reported bottom-line savings as a result of their GHG goals, according to a recent SBTi survey. One in five of these firms’ executives expect all of their company’s products and services to be low-carbon by 2028—a finding Dexter Galvin of CDP called “remarkable” and indicative that a “tipping point is in reach.”
Image credit: Mastercard