Accelerating the food industry transformation

It’s not the cow, it’s the how: Strategies for Paris-aligned meat production Eugen Block Holding GmbH 

Together with right°, Block Group is analysing their own climate impact and checking their climate strategy for 1.5°C-alignment.

How can a company that produces and sells meat operate in compliance with the Paris Climate Agreement? Following a discerning strategy, Block Group has set out to limit the company’s climate impact to maximum 1.5°C. The most effective lever for increasing the sustainability of meat production and consumption lies within the livestock rearing practices themselves. Therefore, Block Group works continuously with its agricultural council, long-term purchasers, and scientific partners to adjust their cattle feeding strategies to reduce the CO2e emissions of meat effectively, holistically, and in conjunction with natural processes.

From Status Quo to Planning the 1.5°C Future

As a first step, right° analysed where Block Group currently stands in terms of climate, using the X-Degree Compatibility (XDC) Model to calculate the entire company’s climate impact in degrees Celsius. This science-based metric compared the company’s greenhouse gas emissions (in tons of CO2e) from the entire up- and downstream supply chains (Scope 1, 2, and 3) to their gross value added (the sum of EBITDA and personnel costs). In addition to the °C assessment, the team at Block Group were received clarity on their remaining emissions budget until 2050. These pieces of data provided a reliable basis for Simon Krämer, Corporate Social Responsibility Officer, and his team to examine the company’s climate strategy for Paris conformity and plan precise reduction pathways.

Block Group’s next step was to use right°’s web-based XDC Scenario Explorer to independently investigate and evaluate the impact of their planned emissions reductions measures. The scenario analysis focused on the feeding strategies of animals from the region whose meat is processed by Block Group. The results clearly showed that the CO2e emissions from feed production can be reduced by increasing the proportion of grass feeding through pasture resource use optimisation. In fact, grass feeding even acts as a CO2e sink because the soil of grass-covered grazelands is capable of storing harmful greenhouse gases over the long term. Working with their farmers to boost the proportion of their cattle’s grass grazing was thus an important step in Block Group’s emissions reductions. To improve the sustainability of their feed itself, Block Group has increased the proportion of locally grown legumes it contains. Legumes in particular have a regenerative effect on soils that can reduce the need for nitrogen fertilisers. Decreasing the use of nitrogen fertilisers enables Block Group to cut their emissions of nitrous oxide, an especially damaging greenhouse gas. The scenario analysis provided Block Group scientifically sound confirmation that their planned animal feed adjustments would indeed efficaciously contribute to the company’s goal of getting on track to 1.5°C.

Livestock rearing in Altkahlen — **Avoiding greenhouse gas emissions as early as the livestock rearing phase**Feeding animals protein-rich legumes ensures more than just heightened meat quality. Local cultivation of legumes for livestock feed can decrease the need for nitrogen fertilisers to support future crops on those fields. This reduction is important since nitrogen fertilisers produce nitrous oxide emissions, which have an even greater climate impact than methane.

“It’s not the cow, it’s the how. By resolutely enforcing sustainable agricultural practices and closing resource loops, we’re transitioning our beef production company toward 1.5°C. Now with the XDC Model from right°, we make decisions based on the best available science.”

Simon Krämer, Corporate Social Responsibility Officer, Block Group

Tools used:

Calculations performed:

Baseline XDC

Scenario XDC

**Stephan von Bülow**Chairperson of the Executive Board, Block Group

A pioneering cooperation

“Society as a whole must reduce our consumption of animal-based foods,” writes the Block Group in their 2021 sustainability report. Meat production always generates emissions. The Scenario Explorer was able to demonstrate, however, that given the right conditions, meat production can in fact be compatible with the 1.5°C goal. To achieve this, a change in agricultural production methods – e.g., closing nutrient cycles – is necessary. The tools from right° provide clarity about Block Group’s climate impact trajectory and empower the company to confidently collaborate with their farmers to execute scientifically confirmed measures that will reduce the climate impact of their meat production to within the 1.5°C goal. Block Group also takes responsibility for its climate impact by actively engaging in partnership projects with agricultural businesses to reduce greenhouse gas emissions in their upstream supply chain. The company is determined to continuously optimise their climate strategy – strengthened and supported by right°’s impact-centric, science-based assessment and exploration tools. On into the future, Block Group will measure the progress of their transformation into a 1.5°C company using the reliable performance indicator degrees Celsius.

“We take responsibility for steering the climate impact of our products toward 1.5°C – by lowering emissions from farm to fork. The tangible °C indicator from right° equips us to continuously measure our progress.”

XDC Climate Impact Report

Comprehensive analysis of your current climate impact and required emission reductions as well as definition of possible 1.5°C compatible reduction pathways.

More references from the Business sector

25.11.2022

Reference

Shaping Transition Processes

CLIMATE IMPACT ANALYSIS FOR BANKS

Measuring Paris-Alignment Across Asset Classes GLS Bank

**Dr. Laura Mervelskemper**Co-Leiterin "Wirkungstransparenz und Nachhaltigkeit"

Climate fund below 2°C

In 2019, GLS Bank started a climate impact analysis of its climate fund using the XDC Model. Some of the main challenges were:

The coverage of different asset classes,
data availability and
a customized sector classification.

Through intensive collaboration between GLS Bank, Wuppertal Institute and right°, the various challenges were addressed, and the climate impact analysis of the fund was successfully completed.

The result: the fund is demonstrably <2°C-compatible. The bank can communicate the Paris Alignment of the fund to customers and stakeholders.

Consistent Communication

After successfully piloting a Temperature Alignment approach in portfolio management, GLS Bank also extended the XDC analysis to include:

its credit portfolio,
customer portfolios, and
the bank itself.

This methodologically consistent application of Temperature Alignment to all asset classes and areas is the key to consolidated customer communication and transparent reporting.

"Capital flows play a central role in relation to the climate crisis. XDC can help align them to 1.5°C."

GLS Bank cargo bike. Photo: Patrick Held

Strategic Partnership

Within the framework of a strategic partnership, right° and GLS Bank are working on the continuous improvement of the methodological basis of the XDC analysis. The main topics are:

full integration of Temperature Alignment into the portfolio management process,
expanding the applicability of the methodology,
scientific integrity,
methodological transparency.

Experts from all divisions are involved on both sides – from climate science to investment research and communication.

In addition, right° and GLS Bank, together with other partners, launched a pilot project in 2020 to analyse the Temperature Alignment of real estate.

Looking Ahead: Risk Management

Beyond transparent and consistent reporting, the key objective is to be able to redirect capital towards 1.5°C on a larger scale: The integration of climate impact criteria into credit risk assessment and lending processes.

GLS Bank is now tackling the integration of XDC analyses as part of the lending process – determined to act as a pioneer, sending the message “It can be done!”

Accelerating the thermal energy transition

Energy supply solutions for Paris-compatible apartment blocks E.ON Energy Infrastructure Solutions (EIS)

In a collaborative partnership, right° and E.ON are investigating innovative heating solutions within existing buildings.

E.ON Energy Infrastructure Solutions (EIS) has planned a new heat supply system for a typical 1980s model apartment block of 300 units. Together with right°, Patrick Schneckenburger’s team analysed how the science-based 1.5°C figure can be used as the basis for evaluating various technical solutions concepts.

**Typical appartment block (symbolic picture)**

From Status Quo to 1.5°C Real Estate

The conditions of one building are different from the next. So as a first step, E.ON assembled an overview of the status quo to answer the question: Where does the apartment block currently stand in terms of its climate impact in °C? right°’s XDC Real Estate Explorer was used to compare the properties’ total area against their CO2 emissions and to project these results into the future. The analysis showed: With its current heat supply, the apartment block is not Paris-compatible and is well above 1.5°C.

Tools used:

Calculations performed:

Baseline XDC
Scenario XDCs for four technology options as well as different implementation dates

In the subsequent scenario analysis, the question was investigated: To what extent do E.ON’s solutions contribute to bringing the apartment block into 1.5°C compatibility? Based on the block’s operational emissions, the software calculated results for a total of four modernization options employing different technologies. These calculations were based on both the internationally recognized decarbonization pathways of the CRREM project (Carbon Risk Real Estate Monitor) and a forecast by the Fraunhofer Institute. The Fraunhofer Institute assumes that the share of renewable energies in the electricity mix will grow significantly faster. The flexibility to consider different scenarios is a specific strength of the XDC Model.

The scenario analysis also illustrated the effect of the different modernization options depending on their time of implementation, thereby indicating when a heating solution would need to be implemented to achieve the 1.5°C target for the property. Since climate change is caused by the cumulative amount of emissions over time, it makes a substantial difference whether the solution is implemented in 2023 or in 2045.

The XDC Model’s results have shown that for refurbished existing apartment blocks, heat pump concepts incorporating a wide range of environmental energy sources are both 1.5°C compliant and economically feasible. However, there are differences within the industry regarding the development of emission factors and pathways. Here, a uniform standard is still needed.

“The tools from right° will enable us to sell and distribute demonstrably Paris-compatible energy supply solutions in the future.”

**Andre Schnelte**Senior Product & Business Development Manager, E.ON

A collaboration with an impact

The team at E.ON can now clearly show their customers which heating concepts deployed at which timepoints are capable of bringing a property into future-proof Paris-alignment: science based and simple in °C. Which combination of technologies is suitable for which challenge depends on the respective requirements and local conditions.

As a next step, the E.ON team intends to bring Paris-conformity into the discussion as a key performance indicator for real estate energy supply. As robust collaboration partners, E.ON and right° aim to establish industry standards that transparently convey emissions intensity as a single informative indicator.

“In addition to the cost-effectiveness of the new energy solutions we design, build, and operate, the demonstrable Paris-conformity of our solutions now also brings compelling informative value into our discussions with customers.”

XDC Real Estate Explorer

Capture the climate impact of buildings, quarters, and real estate portfolios in one simple value: degrees Celsius. Calculate 1.5°C-aligned decarbonisation pathways. Evaluate refurbishments and investments in advance. Tackle the transition.