Scope 2 Emissions Reporting

November 2024

Transparency in Scope 2 emissions reporting has become paramount as stakeholders, lenders, and investors demand more accountability regarding environmental impact. At MULTIVAC Group, we understand this need and come with a solution: the Smart Widget Dashboard.

In the ongoing efforts to create more sustainable operations, companies in the food and medical manufacturing industries are increasingly focusing on reducing their environmental footprint. Among the various scopes of emissions defined by the Greenhouse Gas (GHG) Protocol, Scope 2 emissions play a crucial role in sustainability reporting and efforts.

Scope 2 emissions refer to the indirect greenhouse gas emissions from purchased energy—such as electricity, heat, and cooling—that a company consumes but does not produce directly. While Scope 1 covers direct emissions from company-owned or controlled sources, Scope 2 addresses the impact of energy that is purchased from external suppliers.

For businesses in food and medical manufacturing, energy use is significant. From the operation of machinery in production lines to temperature-controlled environments for storage, the reliance on external energy is substantial. This makes monitoring, managing, and reporting Scope 2 emissions critical to sustainability goals.

Both the food and medical manufacturing industries are highly resource-intensive operations. For food manufacturers, purchased energy is required for processing, packaging, and transportation. While medical manufacturers depend heavily on purchased energy for cleanroom operations, sterilization, and the production of sensitive medical devices. In both sectors, the energy required to maintain high levels of hygiene and safety standards makes energy consumption a major area of concern for emissions.

The good news? Efforts to reduce Scope 2 emissions can lead to significant operational efficiencies. Shifting to renewable energy sources, implementing energy efficiency programs, and optimizing production processes not only help reduce emissions but can also lead to cost savings.

Beyond environmental impact, there is a growing financial incentive for companies to prioritize emissions reductions, particularly Scope 2 emissions, in their operations. Lenders and investors now look closely at sustainability initiatives when determining a company’s financial health and long-term viability.

Lenders: Banks and financial institutions increasingly consider a company’s environmental, social, and governance (ESG) performance before approving loans. Companies with strong sustainability strategies and clear emissions reduction targets often secure better financing terms. For food and medical manufacturers, demonstrating a proactive approach to Scope 2 emissions reduction can strengthen their position when seeking loans, especially as lenders prefer clients committed to environmental responsibility, which can reduce financial risks related to future regulation or energy cost fluctuations.

"The biggest challenges we face in making this (GHG) inventory is that the vast majority of our customers do not report their GHG emissions, so we have to calculate these emissions using proxies. And for some economic sectors, such as agriculture, the calculation methodologies are still being developed."

Luke Disney, Head of Climate Strategy, Rabobank

Investors: Emissions reporting has become a critical metric for shareholders and institutional investors, who are factoring sustainability into their investment decisions. Stakeholders are increasingly pressuring companies to disclose emissions data and meet emissions reduction targets, as this signals not only environmental responsibility but also operational efficiency. By actively managing Scope 2 emissions, food and medical manufacturing companies can appeal to sustainability-focused investors, attract ESG-conscious capital, and enhance stockholder trust and long-term shareholder value.

The GHG (Greenhouse Gas) Protocol and other sustainability reporting frameworks, such as the Carbon Disclosure Project (CDP) and Science-Based Targets initiative (SBTi), require companies to report Scope 2 emissions as part of their overall emissions inventory. As you just learned, transparency in this area has become paramount, as stakeholders, investors, and lenders demand more accountability regarding environmental impact.

As your dedicated production partner, MULTIVAC is committed to finding innovative ways to enhance your operations. Our Smart Widget Dashboard simplifies Scope 2 reporting by delivering essential data directly to your inbox. Custom-built around your key performance indicators and specific data requirements, the Smart Widget Dashboard provides granular insights enabling you to figure cost per pack down to the penny.

Need comprehensive Scope 2 reporting data to meet sustainability funding requirements? The Dashboard captures real-time metrics for air, energy, cooling water, and material consumption, which can be tracked per pack, shift, plant, or production line. Accessible on any mobile device or desktop, the Dashboard is fully configurable to fit your unique parameters, giving you powerful insights whenever you need them.