Emissions and climate goals of listed companies in Austria

Since 2015, when the Paris climate goals were adopted, more and more companies are reporting on their sustainability. The reasons for this are manifold: they want to better manage risks, control their internal processes, comply with legal obligations, and show their commitment to sustainability. The historical corporate culture also plays a role.

In Austria, companies have been required to report on sustainability since 2017 as part of the "Sustainability and Diversity Improvement Act" (NaDiVeG), based on the EU regulation "Non-Financial Reporting Directive" (NFRD).

In the future, the new EU CSRD regulation will require over 1000 Austrian companies to publish detailed information on their emissions and emission targets simultaneously with their financial annual reports. The EU Commission's new OMNIBUS proposal would significantly reduce the number of companies in Austria subject to reporting requirements (study).

In order to derive the right measures, it is necessary to know the status quo of emissions in the economy. However, as of 2024, most Austrian companies do not measure their emissions and therefore cannot report on them. This is different for ATX corporations, which, as the 20 largest publicly traded companies, not only shape the Austrian economy, but are also obliged to measure and disclose their environmental impacts according to applicable EU law (see above).

Currently, however, we are not aware of any public database that makes the climate-relevant activities and greenhouse gas balances as well as climate neutrality goals and reduction targets of Austrian companies available and understandable. Therefore, in the first version of this project, we rely on the data that could be collected in the manual evaluation of their sustainability reports.

The term greenhouse gas balance is used because it refers to a detailed list of all greenhouse gas emissions that can be attributed to a company. Such a balance provides a systematic overview of the sources and quantities of emitted greenhouse gases, which is essential for the evaluation and management of emissions.

The Greenhouse Gas Protocol is one of the most widely used international standards for calculating these company-related greenhouse gas emissions. It includes detailed specifications for calculation and distinguishes between three emission categories: Scope 1, Scope 2, and Scope 3.

- Scope 1 refers to emissions that are directly produced, such as by the combustion of oil, coal, or gas in a company's facilities.

- Scope 2 encompasses emissions that occur in the generation of purchased energy, such as electricity or heat. If a company generates the energy itself, these emissions are not accounted for as Scope 2, but as direct emissions under Scope 1.

- Scope 3, includes emissions from the upstream and downstream value chain. This differentiation allows for a precise and comprehensive recording of a company's total greenhouse gas emissions. Typically, on average, 85% of a company's emissions occur in this category. However, this category is also the least accurately calculated, as it is largely based on estimates based on industry averages, financial information, and approximations (see Nature.com)

A Scope is an emission category according to the Greenhouse Gas Protocol (see above), by which companies calculate their greenhouse gas balance. There are three categories, hence three "Scopes". All together they make up the sum of a company's greenhouse gas emissions.

Category: Scope 1 Emissions refer to the direct greenhouse gas emissions caused by an organization or company. This means that they originate from sources that are within the control or direct sphere of influence of the organization. These emissions typically arise from activities such as the combustion of fossil fuels in factories or vehicles, processes in production, or through chemical reactions in industrial plants.

Category: Scope 2 Emissions refer to indirect greenhouse gas emissions that arise from the upstream use of energy provided by external sources. These emissions do not occur directly at the organization's site, but result from the generation of purchased energy such as electricity, steam, or heat. Examples of Scope 2 emissions are the CO2 emissions that result from the combustion of coal, gas, or oil to generate electricity in power plants. Organizations can influence these emissions by switching to renewable energy or improving their energy efficiency.

Category: Scope 3 Emissions (indirect upstream and downstream) Scope 3 emissions include all greenhouse gas emissions that can be indirectly attributed to the activities of a company that take place upstream or downstream of the reporting company's activities. Unlike Scope 1 and Scope 2 emissions, which refer to internal processes and energy consumption, Scope 3 emissions encompass a wider range of sources, often associated with the supply chain or the use of products or services. Examples of Scope 3 emissions are emissions caused by the transportation of goods and materials, the use of sold products, business travel, commuting by employees, and the disposal of waste products. These emissions are generally more difficult to capture and control, as they are often caused by external partners or customers.

Funded emissions are part of the Scope 3 emissions of banks & insurance conglomerates. So far, the NaDiVeG did not require that the funded emissions be disclosed. Since 2023 and 2024, Austrian companies have increasingly been disclosing the funded emissions, sometimes resulting in emissions in the million ton range. The Partnership for Carbon Accounting Financials (PCAF) standard is the method used by Austrian companies Erste Group, RBI, BAWAG. VIG plans to quantify the funded emissions for the first time in 2024.

Funded emissions can be further divided into Scope 1, 2, 3. If a loan is given for a house, the emissions from the gas heating would be Scope 1, the emissions from electricity consumption would be Scope 2, and various emissions from the upstream and downstream value chain (e.g. construction) would be Scope 3.

The Science Based Targets Initiative (SBTi) is a joint initiative between various organizations, including the Carbon Disclosure Project, the United Nations Global Compact (UN), the World Resources Institute, and the WWF, with the goal of assisting companies and organizations in setting targets for reducing greenhouse gas emissions that are aligned with scientific climate goals. SBTi provides a robust framework for setting targets that are in line with preventing global warming above 1.5 degrees Celsius above pre-industrial levels, as outlined in the Paris Agreement. 

For classification, it is important to know that SBTi only announced in 2021 that it will adjust the minimum ambition level for companies from “well below +2°C” to “+1.5°C”. In addition to this missing ambition level, there are criticisms of SBTi, such as the current methodology not sufficiently addressing the circumstances and possibilities of individual corporate actors. More on this at https://www.nature.com/articles/s43247-024-01535-z