Taking meaningful, measurable actions to embed sustainability throughout our organization is a cornerstone of WorldClimate, Deloitte’s environmental ambition. In FY2020, our near-term (2030) greenhouse gas (GHG) reduction goals were validated by the Science Based Targets initiative (SBTi) as 1.5° C-aligned, science-based targets. Over the past year, we have continued to work toward achieving these targets, recognizing the increasing urgency of the climate crisis.
FY2023 Scope 1 and 2 emissions decreased 79% compared to base year emissions, exceeding our organization’s 2030 SBTi goal of a 70% reduction in Scope 1 and 2 emissions. These reductions are primarily driven by purchases of renewable energy, transitioning to electric vehicles in Deloitte firm fleets, and a change in policy regarding accounting for fleet emissions where Deloitte has no operational control.
Progress toward Deloitte’s 2030 goal of a 50% reduction in business travel emissions per Full-Time Equivalent (FTE) slowed considerably in FY2023 due to travel rebounds following the COVID-19 pandemic. This is a significant challenge for professional services organizations like Deloitte, as well as companies across numerous other industries where travel has long been a core component of doing business. Deloitte is continuing to implement guidance and practices aimed at addressing business travel intentionality and exploring additional ways to reduce travel emissions through value chain mitigation measures like sustainable aviation fuel certificate purchases. Increasingly, clients are asking Deloitte to report client-specific travel emissions and set goals to reduce them. We welcome such opportunities to work together with Deloitte clients to reduce emissions in this critical area.
Additional information on business travel initiatives is provided in the Environmental article in this report.
Our emissions from Scope 3 Purchased Goods and Services increased in FY2023 by 63% compared to FY2022. While the amount of goods and services procured by Deloitte increased by a small percentage, the emissions factors used for those goods and services increased significantly in many cases, contributing to the emissions increase. Calculating emissions from goods and services carries the most uncertainty, as spend data is used to approximate emissions rather than activity data. Deloitte observed that industry average emission factors tend to increase significantly as organizations improve completeness of their emissions reporting. We will continue to work closely with our suppliers toward achieving our goal of having 67% of them, by emissions, set science-based targets by 2025. Over time, as suppliers set goals and have success in their journey towards meeting them, we anticipate Scope 3 emissions for this category will decrease.
Additional details of our GHG emissions and performance against goals are included in the Performance Metrics and Reporting Frameworks Summary.
Deloitte continues to advance our commitment to the Climate Group’s EV100 initiative, which seeks to accelerate the transition to 100% electric vehicles (EVs) by 2030. Looking across our global organization, Deloitte’s fleet has advanced from 24% EVs in FY2022 to 39% in FY2023.
Deloitte member firms are helping to drive this effort. For example, this year Deloitte North and South Europe (Deloitte NSE) implemented guidance that all new vehicle purchases must be hybrids (either a conventional combustion hybrid or a plug-in electric hybrid) or full-battery EVs. In FY2023, 42% of Deloitte NSE’s fleet now consists of EVs and plug-in hybrids.
Deloitte is likewise committed to the Climate Group’s RE100 initiative, supporting the advancement of renewable electricity. We continue to make progress toward our goal of procuring 100% of our electricity from renewable sources, achieving 91% in FY2022 and 94% in FY2023. This goal is not without its challenges for a large global organization like Deloitte, which seeks to purchase renewable electricity for a highly distributed load that spans markets around the world. Where RE100-compliant renewable electricity cannot be sourced, Deloitte firms sometimes source renewable energy attributes from a neighboring geography. This enables Deloitte to demonstrate commitment to our renewable electricity target, help expand the market for renewable electricity in adjacent geographies where it is available, and promote the economic opportunities that come with opening or expanding in-country supply.
Achieving 100% renewable electricity requires the development of vitally important renewable electricity projects, infrastructure, and associated contracts in each market where Deloitte operates. In addressing these matters, Deloitte seeks to engage key stakeholders and looks to aggregate demand with others in order to open markets to voluntary procurement of renewable electricity.
Deloitte has committed to invest in meaningful market solutions for the emissions we cannot yet eliminate. In recent years, we have compensated for unabated emissions through carbon credit purchases as a means to promote the advancement of sustainability solutions, while also recognizing that this does not replace the need to reduce emissions in line with science. In FY2021 and FY2022, Deloitte purchased certified carbon credits for 100% of emissions from operations and business travel.
We continue to explore and seek to adopt leading practices around climate investment and supporting the transition to a low-carbon economy through beyond value chain mitigation. We recognize that purchasing carbon credits, while an important mechanism to bring funding to new climate abatement projects, is only one piece of the puzzle. A comprehensive approach to global decarbonization is needed.
Based on this, in FY2023 Deloitte began transitioning our approach to expand our investment in beyond value chain mitigation to a portfolio of innovative beyond-compliance or credited investments in climate mitigation measures that otherwise may not occur without external funding. We are beginning this transition through the implementation of a voluntary internal carbon price. Deloitte’s internal carbon price is designed to secure a consistent level of investment by establishing a floor price, though Deloitte firms are encouraged to apply a higher price as they implement this new financial mechanism. A floor price was established to remove barriers to the adoption of the carbon price in the Global South, given the disparity in both wealth and emissions between the Global North and Global South.
We will continue to reassess our approach to carbon pricing in future years and anticipate gradually increasing the minimum carbon price to align with leading benchmarks and expanding the scope to cover additional sources of emissions. We will also continue to evaluate the most impactful uses of funds collected through implementation of our carbon price.