Behind the growing fascination with emissions intensity

Approximately 80 percent of companies with climate plans validated by the Science Based Targets initiative (SBTi) use absolute reduction goals as the guide for shrinking their carbon footprint.

A growing number of businesses, however, are adopting emissions intensity metrics to manage emissions from upstream and downstream activities outside their control — the so-called Scope 3 emissions category. 

Emissions intensity is expressed by measures that contextualize greenhouse gases in relation to other core business metrics such as units of production, employee headcount, square footage of factory space, revenue or profit.  

Enterprise software firm Salesforce, for example, adopted Scope 3 emissions intensity goals when it reset its science-based targets in early 2025. Its calculation will compare emissions with gross profit. Consumer products maker Procter & Gamble uses a Scope 3 metric that examines emissions per unit of production, while media company Netflix measures its Scope 3 emissions in relation to each $1 million of value added. 

Absolute reductions + emission intensity

Absolute emissions reductions are what’s needed to mitigate climate change, but sustainability professionals say emissions intensity is gaining credibility — especially among fast-growing companies or businesses in hard-to-abate sectors — as companies revisit their climate strategies amid shifting tax incentives, carbon accounting rules and geopolitical conditions.

“We often say that we need to see absolute targets, but for some companies that is absolutely not the right picture,” said Thomas Day, climate policy analyst with NewClimate Institute. 

For example, energy companies may experience increases in absolute greenhouse gas emissions inventories as they generate more electricity because of infrastructure investments. 

But because more low-carbon power is needed for electrifying manufacturing or heating and cooling, a better measure of progress is a metric that monitors an energy company’s ability to cut emissions related to each kilowatt-hour of electricity it adds to the grid, Day suggested.

Recognized metric

SBTi target-setting methodologies require companies to set absolute emissions reductions goals for operations (Scope 1) and electricity purchases (Scope 2) but it recognizes emissions intensity as one way to handle Scope 3 emissions, typically the biggest part of any company’s carbon footprint.

The latest draft of SBTI’s net-zero standard revision, for example, proposes new emissions-intensity options for purchases of commodities that are energy- or land-use-intensive or for transportation-related activities.

Emissions intensity is more relatable for procurement departments, factory managers, finance teams and other business leaders because it is essentially a measure of efficiency that’s more straightforward to manage, said Marc Munier, CEO of researcher DitchCarbon.

“It’s a much easier thing to hit,” he said. “Carbon is a byproduct of a business activity. If you are more efficient, then that is better for the company anyway. It’s a much easier pitch for a sustainability professional.”

Thermo Fisher Scientific has absolute emission reduction targets but often uses an emissions intensity metric when discussing reduction strategies with customers and suppliers, said Matthew Yamatin, sustainability program director for the life sciences company.

“That and product carbon footprint are what you are starting to see procurement teams move towards,” he said.

The emissions intensity measure is a better gauge than spend-based emissions factors and will help Thermo Fisher identify which companies in its supply chain are more carbon-efficient, Yamatin said. 

Ultimately, Thermo Fisher anticipates adding product carbon footprints to gauge performance, he said, but the processes for gathering that data likely won’t be sufficiently mature for five to 10 years in the life sciences industry. 

Reset internal stakeholder conversations 

Manufacturers Terumo Blood and Cell Technologies, a subsidiary of Japanese equipment maker Terumo, and Stanley Black & Decker opted for emissions intensity targets to guide reductions for Scope 3, in part because these are management metrics that resonate with factory managers, business division leads and finance teams.

Both companies had their commitments validated by SBTi.

Terumo’s current goals call for an absolute reduction of 50.4 percent across its operations (Scope 1) and electricity use (Scope 2). It seeks to cut its supply chain footprint (Scope 3) by 60 percent per unit of revenue by 2030, compared with a 2018 baseline.

The intensity metric recognizes operational improvements by suppliers but doesn’t penalize growth in spending with certain suppliers, said Kyle Santos, director of sustainability at Terumo Blood and Cell.

“If you are a growing business, it is easier to manage an intensity target,” he said. “It takes your growth into consideration.”

Tools manufacturer Stanley Black & Decker’s 2030 targets include a 42 percent absolute reduction for Scopes 1 and 2. It set specific emissions intensity targets for its three most significant, controllable Scope 3 areas:

• Category 1 (purchased goods and services): a 52-percent reduction in kilograms of carbon dioxide equivalent per kilogram of purchased material
• Category 4 (upstream transportation): a 52-percent reduction in kg CO2e per ton shipped
• Category 11 (use of sold products): a 52-percent reduction in kg CO2e per kilowatt of sold product output power

If it achieves these goals and meets its medium-term financial targets, Stanley Black & Decker estimates that it will see a 45-percent reduction in absolute Scope 3 emissions; for transparency, it still reports that number in its disclosures.

“Our intensity metrics are at their most effective when we are also transparent about our overall Scope 3 impact, which means reporting on absolute emissions as well,” said Matthew Boucher, sustainability manager at Stanley Black & Decker.

The company’s emissions intensity levels are less easily influenced by swings in revenue or profits, and they were chosen for that reason, he said.

“When we set the goals, we were extremely deliberate about the metrics we chose,” Boucher said. “We want them to be tied as closely as possible to the core business practice that is responsible for the emissions.”

The change was simpler to communicate and improved decision-making processes throughout the organization, Boucher said. For example, it opened pathways for product managers to more closely consider the impact of materials selections during the design phase.

Nuance required

The most credible emissions intensity metrics are ones closely tied to a meaningful business outcome that employees across the company can actually control, said Lyrica McTiernan, an independent sustainability consultant previously with Facebook and We Company (formerly WeWork).

“Companies should do the most impactful things they can do,” she said. Reporting on emissions intensity will require a more nuanced narrative in ESG reporting and disclosures, she added. 

Emissions-intensity targets are less meaningful when tied to variables such as revenue or gross profits, because these are things over which the sustainability team has very little control, said NewClimate’s Day.

“We advocate for a system of having much more specific targets on the issues that really matter for the business model of the company,” he said.