How Saipem Contributes to SDG 13: Action Against Climate Change
This article series is sponsored by Saipem and produced by the TriplePundit editorial team.
There is now international consensus that the fight against climate change represents the biggest challenge humanity must face in the 21st century. Extreme weather events, failure to reduce carbon emissions and slowness in building climate resilience are among the top risks that pose a serious threat to global stability, according to the Global Risks Report 2019, published by the World Economic Forum in January. Last year, the Intergovernmental Panel on Climate Change (IPCC) published a special report describing the dramatic effects of climate change and the immediate steps that must be taken to limit warming in the future.
The Task Force on Climate-Related Financial Disclosures (TCFD) had published recommendations for the effective disclosure of climate-related financial risks about a year before the IPCC's report. Following its Action Plan on Financing Sustainable Growth released in March 2018, the Technical Expert Group on Sustainable Finance (a technical working group set up by the European Commission) followed up with its own report, “Climate-Related Disclosures."
The report compares the TCFD’s recommended disclosures to the EU’s directive on non-financial and diversity disclosures, and highlights the common points. The report proposes climate-related disclosures, differentiated based on companies’ exposure to climate change, to assist the European Commission in its revision of the current non-binding guidelines for disclosures, formally titled Directive 2014/95/EU.
So far, the energy industry has taken steps to limit the emissions of greenhouse gases from its own operations. However, the challenge will be to meet the increasing demand for energy by the global population, which is estimated to exceed 9 billion by 2040, while tackling climate change. Although the link between climate-related indicators and financial impacts is complex, climate-related risks and opportunities undoubtedly affect the future strategy and perspectives of an international and multi-business technological solutions provider like Saipem. In fact, Saipem can play an important role in helping and supporting its clients as they seek to meet the needs of a fast-changing world.
Considering the above, following the recommendations of the TCFD, Saipem published its first disclosure on tackling climate change, approved by its board of directors last month. The document proves Saipem’s commitment to providing effective disclosure to its stakeholders on issues that could influence the company’s operations and to demonstrating how it is equipped to run its business in the long term. The company analyzes and monitors the potential implications of climate change on its business and operations, such as any other issues in the medium/long-term, and integrated this consideration into its strategic plans.
Contributing to SDG 13: Climate action
Saipem plans to gradually reduce its dependence on the fossil fuels business by extending offers to its clients in less climate-impacting fields, investing in renewable technologies, developing more sustainable fossil fuel uses, and diversifying its activities. Saipem is making significant efforts to improve the efficiency of its assets and operations to reduce GHG emissions.
Saipem's climate change disclosure also describes main climate-related risks and opportunities and the process for their identification, assessment and management. As requested by the TCFD, Saipem discloses the time horizon, the magnitude, and the likelihood of these risks and opportunities. Last, but not least, regarding climate-related opportunities, Saipem estimated more than 2 billion euros in revenues in a three-year time frame, due to market context and ongoing commercial efforts.
Metrics and emissions reduction initiatives
Saipem discloses its main energy and emission indicators and provides practical examples of emission-reduction initiatives applied to its business context. For example, the electrification of two onshore drilling rigs in Kazakhstan demonstrates a fruitful client-contractor partnership aimed at achieving maximum efficiency and reducing environmental impacts.
Moreover, in 2018 Saipem finalized its Group Strategic GHG reduction plan, which includes all Saipem Divisions. This represents a fundamental milestone and concrete evidence of Saipem’s Tackling Climate Change strategy.
In order to further improve and detail its climate-related disclosures, Saipem is cooperating with Fondazione Eni Enrico Mattei (FEEM), an international research center, on a project in Italy. Co-sponsored by Saipem, this project is a multi-stakeholder initiative aimed at analyzing climate-related risks for companies and promoting well-founded and science-based public discussion.