Transparency in Climate Reporting: The Case of Sveaskog
The Swedish government’s ownership policy emphasizes the critical importance of state-owned companies working towards national environmental and climate goals, adhering to the Paris Agreement, and acting as role models in sustainability. This policy forms the basis for scrutiny of climate reporting practices among these companies, including Sveaskog, a state-owned forestry company. A recent debate arose concerning the transparency and comprehensiveness of Sveaskog’s climate reporting, specifically regarding the inclusion of biogenic greenhouse gas emissions. Klimatkollen, a climate transparency initiative, raised concerns about the lack of detailed reporting in line with established standards, prompting a response from Sveaskog.
Sveaskog contended that it does report biogenic emissions, that comparing climate efforts between forestry companies is impossible, and that Klimatkollen equated biogenic and fossil carbon dioxide emissions. However, a closer examination of Sveaskog’s sustainability report and their own subsequent statements reveals a discrepancy. While claiming to report biogenic emissions, the company admitted that these figures, specifically those within their value chain (Scope 3), would only be included in their 2024 report. This omission hinders transparency and comparability, especially when assessed against the Greenhouse Gas Protocol (GHG Protocol), a widely recognized standard for emissions accounting and reporting.
Klimatkollen highlighted the importance of adhering to the GHG Protocol, which requires separate reporting of Scope 1 (direct emissions from operations), Scope 2 (indirect emissions from energy consumption), and Scope 3 (indirect emissions from the value chain). Furthermore, Scope 3 emissions should be categorized into specific activities (15 categories in total), and biogenic emissions should be reported independently. This level of detail allows for a comprehensive understanding of a company’s overall climate impact and facilitates meaningful comparisons between organizations. Sveaskog’s previous lack of detailed reporting hampered such comparisons, making it difficult to assess their performance relative to other companies in the sector.
The debate also touched upon the comparability of climate reporting within the forestry industry. While acknowledging the challenges due to varying methodologies and data availability, Klimatkollen emphasized that increased transparency remains crucial. By publicly disclosing emissions data according to a standardized framework, companies enable stakeholders to evaluate their performance, hold them accountable, and drive improvements in climate action. Sveaskog’s commitment to developing international comparable standards is commendable, but implementing transparent and comprehensive reporting in line with the GHG Protocol should be the immediate priority.
A key point of contention involved the distinction between biogenic and fossil carbon dioxide emissions. Klimatkollen stressed the importance of distinguishing between these two types of emissions, noting that accurate accounting for both is crucial. While biogenic emissions, arising from natural processes like plant growth and decay, can be considered part of a closed carbon cycle, their impact on atmospheric CO2 levels depends on sustainable forest management practices. Failing to accurately account for both fossil and biogenic emissions risks underestimating the overall impact on the carbon cycle and potentially hindering efforts to mitigate climate change. This is particularly relevant for bioenergy, where unsustainable practices can lead to increased carbon emissions and contribute to climate change acceleration.
The exchange between Klimatkollen and Sveaskog highlights the increasing demand for transparency and accountability in corporate climate reporting. State-owned companies, like Sveaskog, bear a particular responsibility to demonstrate leadership in this area. By adopting the GHG Protocol and providing detailed, standardized reporting on both fossil and biogenic emissions, Sveaskog can fulfill its obligations under the government’s ownership policy, improve transparency, enhance comparability, and contribute to a more informed public discourse on climate action. This transparency will empower stakeholders to hold the company accountable and ensure its actions align with national climate goals and the ambitions of the Paris Agreement. The timely and accurate reporting of emissions data is not merely a technical exercise but a crucial step towards building trust, fostering accountability, and driving meaningful progress towards a sustainable future.
