As the world’s temperature rises, so too does the demand for cooling.
While this is good news for the industry, it’s bad news for the planet.
More than tripling since 1990, the energy consumption for space cooling continues to rise – and now accounts for more than 7% of global greenhouse gas emissions, according to a new report from the Carbon Trust and UN Cool Coalition.
And these emissions are growing fast. Without intervention, UNEP estimates that cooling will account for more than 10% of global emissions by 2050.
“The private sector has a huge role to play in financing and driving innovation to advance sustainable cooling,” says Makhtar Diop, Managing Director of the International Finance Corporation (IFC).
Reducing cooling emissions will require widespread adoption of passive cooling measures, superefficient equipment and appliances, and ultra-low Global Warming Potential (GWP) refrigerants and insulation foam gases, the report finds.
But are cooling industry suppliers doing enough?
Which Cooling Suppliers are Leading Industry Decarbonisation?
According to the report, which tracks 55 cooling suppliers, the number of suppliers whose targets have been validated by the SBTi has nearly doubled over the last two years, from 16 to 31 companies.
The majority of these have set Scope 1 and 2 targets for 2030 emissions reductions that exceed the 2030 Net Zero target and almost all (28) companies have committed to 2030 Scope 3 targets.
Among the 55 suppliers, the report identifies nine as ‘transformers’, those with strong climate ambitions and decarbonisation activities – and these include Schneider Electric, Emerson, Electrolux, Fujitsu, Danfoss, Orbia, Trane Technologies, Arcelik and Johnson Controls.
Each considered strong advocates for accelerating climate action, seven have set 2030 targets that align with SBTi – while one is leading the pack with an ambitious 2025 target.
That company is Swedish multinational Electrolux Group, which the report identifies as the cooling industry leader in reducing the climate footprint of its products.
Pretty impressive, given the size and scope of the Electrolux business.
As the world’s second largest appliance maker by units sold with sales of US$12.76 billion in 2023, Electrolux sells around 60 million household products in more than 120 markets every year – and boasts a workforce of 51,000.
Electrolux Leading the Cooling industry Pack to Net Zero
Action on the climate is nothing new for Electrolux, which has been shaping living for the better or more than 100 years.
In 2018, the company was among the first 100 companies to set its global SBTi – and is one of the first to meet those goals, three years ahead of plan.
Among targets, Electrolux has committed to reduce absolute Scope 1&2 GHG emissions by 80% by 2025 from a 2015 base year, and absolute Scope 3 GHG emissions from use of sold products 25% within the same timeframe.
By the end of 2022, the Group had achieved 82% emission reductions in scope 1 and 2 and 25% in scope 3.
The Group is one of just four global manufacturers of products containing refrigerants that have made clear commitments to phase out gases with high global warming potential (GWP) and have a plan to replace them with low to ultra-low GWP gases.
Since 2019, the Group has been committed to phasing out high-GWP gases within the Cool Coalition initiative. By the end of 2023, Electrolux had replaced high-GWP gases from 97% of its products containing refrigerants and insulation foams.
“Electrolux Group stands out as a company that passionately champions sustainability leadership in its business operations,” explains Paul Huggins, Associate Director, Head of Industrial Decarbonisation at the Carbon Trust.
“The Group achieved its place in our ‘Transformers Group’ because of ambitious SBTi verified climate targets that it achieved three years ahead of time, active support for industry collaborations that encourage climate action by the industry and government, and by use of green financing to retool its factories to build more sustainable products."
Electrolux Green Financing Goals and Achievements
Electrolux has invested SEK 6.8bn in green assets via its Green Financing Framework.
In 2022, Electrolux issued five Green Bonds, worth a total of SEK 5 billion, with tenors of two to five years, and is using these funds to support the company’s drive to clean and resource-efficient operations and in offering energy solutions and circular products.
Electrolux is using green financing to achieve a 20% improvement in the energy efficiency of transformed manufacturing operations, along with the development of new product lines with energy efficiencies that are 15% better than the average and forecast to deliver 240,000 tonnes of CO2 reduction.
“We are using green financing to help us transform into a sustainable business — with a current portfolio of SEK 6.8 billion in green assets that meet our criteria to reduce climate impact according to Electrolux Group Green Financing Framework,” says Elena Breda, Chief Technology and Sustainability Officer at Electrolux Group.
“This green financing is being used to not only replace hydrofluorocarbons (HFCs) with low-GWP gases, but to also improve the energy efficiency of our manufacturing operations by at least 20% and the overall efficiency of our products by at least 15%.”
Breda took the sustainability reins at Electrolux this month, following the departure of Vanessa Butani to Swedish sister Volvo Cars.
With more than 20 years of experience in sustainable product innovation across the Group's three innovation areas, Elena is now tasked with developing products and solutions that “help people live more sustainably while working toward our For the Better 2030 Goals, including our ambitious climate goals”, says Group President & CEO Jonas Samuelson.
How can cooling suppliers commit to climate action?
Like Electrolux, pioneering cooling suppliers who have made the most progress toward net zero share key characteristics, according to the report.
As well as setting clear targets for 2030 and 2050, which are typically verified by SBTi or another independent validation, they collaborate and communicate to support the cooling industry’s transition to Net Zero.
Suppliers including Trane Technologies, Electrolux, Schneider Electric, Johnson Controls, Arçelik and A-Gas have recognised the need to share experiences and learning with others inside and outside the industry to accelerate progress towards Net Zero.
Like Electrolux, they are transforming their business operations to manufacture sustainable cooling solutions, which requires substantial capital investment. These companies have reprioritised their capital investment frameworks to include climate targets and outcomes, and are making good use of green finance (e.g., green bonds, sustainability linked bonds).
These are the steps recommend by The Carbon Trust, in the report:
- Net Zero cooling requires ultra-low GWP refrigerants and super energy efficient equipment. There needs to be stronger public commitments to this from cooling suppliers, including those who have signed up to SBTi or RtZ
- Scope 3 emissions make up 90-99% of a cooling supplier’s GHG emissions. It is vital that all suppliers take immediate and consistent actions to drive down Scope 3 emissions
- Cooling suppliers need to collaborate to transform the industry and deliver Net Zero success. For example, cooling suppliers can accelerate the development of non-competitive solutions used across the cooling industry (e.g., materials handling standards, cabling standards, ancillary equipment standards), and co-create or support the development of the enabling environment.
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