Tag: #greentransition

How do we find the green elephant in the classroom?

By Lavinia Cristina Iosif-Lazar, Jens Riemer and Caroline A. Pontoppidan

“Environmental sustainability to be at the core of EU education and training systems” – So reads the latest recommendation from the European Commission to EU education ministers, which highlights that “learning for environmental sustainability is not yet a systemic feature of policy and practice in the EU.” How then do we better inform practice and policy? Where does one even start to look at what has already been achieved and what more needs to be done on environmental sustainability, especially in Higher Education Institutions (HEIs)?

Coupled with the complexities of incorporating sustainability in HEIs and the diversity of methods used by HEIs in advancing these efforts or curriculum  overhaul, the task of bringing about systemic change and reaching the targets set on climate mitigation and biodiversity can seem daunting. But this is where a good picture of where we are now and where we want to be, can make a difference. 

Global pollution of, among other things, air, soil, and water, increasing exploitation of the resources of the Earth, and global climate change are challenging nature, environment, and public health. Also, Denmark and the world are in the midst of a biodiversity crisis caused by man-made pollution and exploitation of natural resources and habitats, global spreading of invasive species, and climate change. The intensive exploitation of the open land, forests, coastal zones, and marine areas has caused nature to be fragmented and continuously exposed to a number of stress factors, which means that biodiversity is on a constant decline

(p.17)
The EU Context: broadly speaking, all education needs to be green

At the EU level, we do not lack initiatives that have brought into focus the greening of the curriculum and the need to address climate and environmenal issues at all levels of education and training. The European Education Area (EEA) is an initiative aimed at strengthened collaboration between European Union Member States to build more resilient and inclusive education and training systems. One of the five focus topics of the initiative centers on Green Education. GreenComp – The European Sustainability Competence Framework developed by the European Commission was one of the cornerstones in the educational scope of the European Green Deal. Published in January 2022 and aimed at providing a shared competence framework on sustainability to guide educators and learners, the framework can be used by member states as a reference when rolling out educational initiatives on sustainability. 

However, even with all the attention given to education initiatives, there is little  direct appealing to HEIs at the EU policy levelMost of the time, communication is directed towards the whole sector leaving the specific directionality of the initiatives to the individual Member States and HEIs are most often mentioned together with schools and other training institutions. The GreenComp report mentions Higher Education a few times but only to illustrate that Higher Education has succeeded in creating a focus on competences for environmental sustainability in relation to preparing the students to address sustainability challenges and opportunities in their working life.

The Danish Context: The Danish Ministry of Education and the Green Transition

In September 2020, the Ministry of Higher Education and Science, Denmark, published ‘Green solutions of the Future’, a strategy for investments in green research, technology, and innovation. It also highlighted the important role of close collaborations between knowledge-institutions and the business community. To get things moving, the Danish government decided to allocate research funds to boost green research and also bringing more focus on green study programmes.  

And the issue of what was happening in HEIs on  green research quickly became a focal point. In December 2021, the Danish Ministry for Education and Science sent a request for data on the work HEIs were doing to integrate green themes in educational programmes. The Ministry asked institutions to submit an overview of seven green themes and the coverage of those themes in their programmes. Among these themes, two were focused on energy production and effectiveness, and the others addressed agriculture, transport, environment, biodiversity and sustainable behaviour. 

The CBS Context: Green Themes in study programmes 

There are multiple ways in which HEIs can find out what content in their educational offerings addresses the green themes described by the Danish Ministry. The way in which CBS did it, was to build on already initiated course content analysis and expand it to include the seven themes. In the academic year 2021-2022, CBS offered 18 Bachelor (undergraduate) programmes, 36 Master (graduate) programmes, as well as HD, Executive and special Master programmes. This amounts to a lot of data to go through and analyse. Other universities or schools might face the same issue of data being both diverse and difficult to gather, but once it is gathered, the managing the amount of data can become a challenge. 

CBS used the qualitative research tool NVivo, to analyse and code data from courses in all CBS’study programmes. This was done by identifying specific key words related to the given seven green themes (see table below). The data collected was derived from study programme competency profiles, course descriptions and learning objectives. For every search result returned, the context was analysed and only relevant hits were then recorded in the respective codes. 

Theme 1Theme 2Theme 3Theme 4Theme 5Theme 6Theme 7
Energy productionEnergy effectivenessAgriculture and Food productionTransportEnvironment and Circular economyNature and BiodiversitySustainable behaviour and Societal consequences
How do Green Themes look like in a study programme at CBS?

Once the data was collected and the content analysed,  a relatively comprehensive picture emerged of how and where the green themes are present in a study programme at a European business school like CBS. 

Case 1 below, illustrates a visualization  of an anonymised bachelor programme. It presents how the seven green themes can be visualized so to give an “as is” picture. With this information, study programmes can dive deeper into the green content that they already have embedded in their programmes and/or identify that they are interested in additional integration of the seven environment themes into education.

Figure 1: Case 1 – Bachelor Study Programme A (BSc. A)

Bachelor Study Programme A had extensive coverage of Green Themes 5 through 7. The numbers in each cell of the below table represent the number of hits (keywords) per theme. Within the Bachelor Study Programme A, the green themes were identified in both mandatory and elective courses, in their respective course descriptions (CD) and learning objectives (LO). Environment and Circular economy, Sustainable development and Social consequences, as well as Nature and Biodiversity were the themes found represented in the Bachelor Study Programme A courses. 

The continuous loop: research, policy, strategy and the classroom 

The analysis and reporting of course content on green and environmental themes can function as a basis on which discussions about environmental sustainability in an institution’s educational activities can be taken. Getting this overview can inform further work to advance both content and scope that strengthens the advancement of environmental sustainability competences. These can later also find their way into regional strategies as well as inform policy makers at the International and European level. Having a well-informed stance on how, where and which environmental content and competencies HEI graduates obtain during their education can  highlight where efforts need to be targeted. This also means that HEIs become a part of the action on “greening” the curriculum and, in turn, can better inform policy makers and education initiatives.

The business school sector has much to build upon. Pioneering scholars have long focused on issues of the environment and sustainability. There has been a dramatic uptake in the last decade of attention to climate change by business scholars, encouraged by editorial statements and special issues in the leading journals in every one of our disciplines. In the classroom, these issues are increasingly being discussed in core and speciality courses, representing significant curricular shifts, and supported by our accrediting bodies

(Galdon et al., 2022)

To read the full report, please visit CBS PRME InFocus Report series: https://www.cbs.dk/viden-samfundet/indsatsomraader/principles-responsible-management-education/resources/prme-infocus-reports

References

Bianchi, G., Pisiotis, U. and Cabrera Giraldez, M., (2022). GreenComp: The European sustainability competence framework, Punie, Y. and Bacigalupo, M. editor(s), EUR 30955 EN, Publications Office of the European Union, Luxembourg, 2022.

Danish Ministry of Higher Education and Science (2020). Green solutions of the future – Strategy for investments in green research, technology, and innovation.

Galdón, C., Haanaes, K., Halbheer, D., Howard-Grenville, J., Le Goulven, K., Rosenberg, M., Tufano, P. and Whitelaw, A. (2022) Business Schools Must Do More to Address the Climate Crisis.

About the Authors

Lavinia Cristina Iosif-Lazar is a project lead on Principles of Responsible Management Education at the CBS Teaching & Learning Department. Lavinia’s work centres on curriculum development, climate and carbon literacy and systemic thinking in management education, as well as assisting in the development of teaching materials. 

Jens Riemer is a Green Transformation Officer at Copenhagen Business School, within Executive Support and Communcations. Jens works with the cross-cutting strategic initiative Green Transition, which focus on bringing together key players in establishing an organizational frame and initiate concrete problem-based research and educational activities.

Caroline A. Pontoppidan, Associate Professor department of Accounting & Academic director CBS PRME. Her research often engages with the institutionalization of global standards into local context – and challenges herein.

Photo by Alex Lvrs on Unsplash

“A Little Less Unsustainable Is Not the Same as Sustainable” – Why Including Fossil Gas and Nuclear Power Will Harm the EU Taxonomy

By Andreas Rasche 

◦ 3 min read ◦

The EU Taxonomy reflects a classification system that assesses whether certain economic activities are environmentally sustainable. Without doubt, the idea is a good one and the Taxonomy acts as a prerequisite for the EU’s Corporate Sustainability Reporting Directive (CSRD) and the Sustainable Finance Disclosure Regulation (SFDR) to unfold their full potential. But: should fossil gas and nuclear power be included into the Taxonomy and hence count as environmentally sustainable? A leaked EU “non-paper” seems to suggest exactly that… 

Including fossil gas and nuclear power will significantly harm the Taxonomy, both in terms of its perceived legitimacy but also in terms of its consistency with existing policy frameworks and regulations. I believe that there are three key points to consider: 

  1. Legal Inconsistency: Including fossil gas and nuclear power into the Taxonomy is likely to undercut the very regulation that the Taxonomy is based on. Article 10 of the Taxonomy Regulation (EU 2020/852) makes clear that an economic activity is considered sustainable if “that activity contributes substantially to the stabilisation of greenhouse gas concentrations in the atmosphere” (my emphasis); at least for fossil gas this is highly questionable. Although nuclear power is a low-carbon energy source, it is by no standards a safe alternative to renewables. In fact, it is a risky energy source, especially if we consider its entire life cycle. This is exactly why many investors see nuclear power as an exclusion criterion for sustainable finance products. When considering the entire life cycle of nuclear power, this energy source creates non-calculable risks vis-à-vis the Taxonomy’s environmental objectives (e.g., the protection of healthy ecosystems). For instance, the mining and processing of uranium has a questionable sustainability track record. 
  2. Policy Inconsistency: The EU itself suggested that to reach its goal to reduce emissions by 55% until 2030, there is need to cut 30% of the total consumption of fossil gas by 2030. However, including fossil gas into the Taxonomy will re-orient capital flows in a way that money is flowing into this sector (and not away from it). At the end, it is likely that this will lead to higher usage of fossil gas, much beyond the “transitional use” that the EU intends to establish. Further, a number of EU member states have pledged during COP26 to show “public support towards the clean energy transition and out of unabated fossil fuels.” This pledge does not seem well aligned with an inclusion of fossil gas into the Taxonomy. 
  3. Reduced Perceived Legitimacy: A factor that is less debated in the public, but still very relevant, is the reduced legitimacy of the Taxonomy. Although the Taxonomy, and linked regulations like SFDR, imply more work and a certain “bureaucratic burden” for financial market participants, many market actors have welcomed the new regulations. They increase transparency, make greenwashing harder, and hence have the power to re-orient capital flows into sustainable economic activities. Including fossil gas and nuclear power into the Taxonomy, endangers this legitimacy. In fact, the Taxonomy may move “from hall of fame to wall of shame”, as the WWF recently suggested. 

At the heart of the problem, lies a misunderstanding, I think. The EU Taxonomy is supposed to single out those economic activities that have the potential to make a substantial contribution to reaching six environmental objectives. Just because an economic activity is a little less unsustainable than comparable activities, it is not ipso facto sustainable. Being less unsustainable is different from being sustainable. Put differently, just because nuclear may be “cleaner” than coal does not imply that the former contributes to sustainability. 

It is often argued that fossil gas and nuclear power need to be included into the Taxonomy as they are necessary “transitional activities”. I believe this claim is misleading: 

  • Focusing on “transitional activities” sets the bar very low for Europe’s ambitions Green Deal. Ursula von der Leyen called the Green Deal Europe’s “Man on the Moon” moment, pointing to its ambitious character. If contested energy sources like fossil gas and nuclear power become part of the Taxonomy, we have not put a man on the moon. Maybe, then, we have not even managed to let the rocket start… 
  • Excluding fossil gas and nuclear from the Taxonomy does not imply that these energy sources will vanish overnight. It simply means that they will not be considered a sustainable economic activity (like a number of other economic activities). 

It is time to take the Taxonomy seriously, otherwise we may slow down or even hinder the necessary green transition of Europe’s economy…

About the Author

Andreas Rasche is Professor of Business in Society and Associate Dean for the Full-Time MBA Program at Copenhagen Business School. More at: www.arasche.com. 

Photo by Frédéric Paulussen on Unsplash

Climate Change and Magical Thinking

By Steen Vallentin

◦ 7 min read ◦

COP26, the 26th UN Climate Change Conference, has just ended. It was supposed to be ‘the next big and significant one’: the great follow-up to COP21 five years ago, the outcome of which was the Paris Climate Agreement, the first binding international treaty on climate change. The global urgency regarding climate issues has certainly never been greater. 

Although COP26 has yielded some results and some progress has been made, it has been a disappointment to many, including the iconic and omnipresent Greta Thunberg, who was filmed chanting “you can shove your climate crisis up your a…” along with other demonstrators at a rally in Glasgow – and who summarized the accomplishments of COP26 in three words:

Blah blah blah.    

Looking at the Glasgow Climate Pact and its immediate reception, we are certainly, once again, witnessing a political willingness to attribute considerable significance to (non-binding) declarations of intent regarding (possible) future actions and to the mere mentioning of the 1,5°C temperature increase target and efforts to phase-down (not phase-out) the use of coal power and fossil fuel subsidies.    

In the absence of truly transformational commitments and progress, the espoused political belief in the power of words to move action can seem quite magical at times, indeed reflective of magical thinking. Certainly, there was nothing magical about the moderate public and civil society expectations of progress preceding COP26. We have to look elsewhere for the magic. We have to look inside the established political system, where magical thinking is at play in definitions of climate problems and solutions, and where it, in itself, constitutes a problem worth addressing.

What is Magical Thinking?

To begin with a definition, magical thinking refers to “the idea that you can influence the outcome of specific events by doing something that has no bearing on the circumstances”. It is a well-known phenomenon in the area of human health and disease. Children are known to practice it. 

However, in the area of climate change and sustainability it is the grownups, in particular politicians, that tend to have a proclivity for magic – with the younger generation seeking to expose the deficiency and unrealness of subsequent courses of action.

In relation to sustainability, magical thinking is a matter of believing that certain outcomes – decoupling of economic growth and GHG emissions, a zero carbon economy – can be achieved by means that, although they may have some bearing on circumstances, are insufficient and ultimately unfit for purpose (according to the best available scientific knowledge). 

Ends and Means: Strong and Weak Sustainability

One way to frame this problem, at the most general level, is to distinguish between strong and weak sustainability, as illustrated in the table below. 

– source: developed from Sjåfjell (2018)

While strong sustainability calls for radical and systemic change guided by a biocentric preoccupation with planetary boundaries, non-negotiable ecological limits and safe operating spaces, weak sustainability signifies a more pragmatic and incremental approach to change, maintaining an anthropocentric focus on development as (economic) growth, human needs and intergenerational equity. An important point being that urgent calls for action tend to draw on the repertoire of arguments provided by strong sustainability, whereas most solutions ultimately fall under the heading of weak sustainability. They are not radical, only incremental, and certainly pragmatic. 

The question is whether it is indeed an act of magical thinking to believe that we can accomplish strong sustainability ends by weak sustainability means. In other words, that we can reach the climate targets we need to reach, according to science, by way of incremental, small steps change – holding onto the growth paradigm, the business case and win-win. 

The Magic of Win-Win

Andrew A. King and Kenneth P. Pucker, in a recent piece in Stanford Social Innovation Review, speak of “the costs of magical thinking” in relation to the prevalence of the win-win (or triple-win) mindset and associated terms such as CSV (creating shared value). They talk about “strategies [that] rely on improbable mechanisms, promise implausible outcomes, and boast effectiveness that outstrips available evidence.” Strategies that “inflict harm because they distract the business world and society from making the difficult choices needed to address pressing social and environmental issues”. 

This begs the question: What is located on the other side of win-win? How can we escape its magical allure and the often exaggerated claims made in its name? Unfortunately, King & Pucker do not have much to say about this. They speak only of how: “It is time to turn away from alluring unproven strategies and refocus our efforts on those interventions that have proven effective – such as government regulation”.

It is not a terribly convincing argument. Government regulation in the age of man-made climate change is not so much an escape from win-win as it is an embodiment of win-win – and arguably needs to be. Sustainable development is not only about climate change and climate solutions – the social and economic pillar of sustainability need to be considered alongside the environmental pillar at all times. That is, questions of social justice and of what is economically feasible also need to be addressed.    

The European Green Deal as a Win-Win Scenario

The European Green Deal is, for better or worse, an illustrative example of this. The President of the European Commission, Ursula von der Leyen, has referred to the green transition as ‘Europe’s Man on the Moon Moment’. Nevertheless, the framing of the European Green Deal reads like a textbook case of win-win, and not a very advanced one at that. As you can read on the Green Deal webpage: “Making Europe climate-neutral and protecting our natural habitat will be good for people, planet and economy. No one will be left behind.” The Green Deal is Europe’s new growth strategy, it will help cut emissions while creating new jobs and, again, it will leave no one behind.

Speaking of private businesses, the arguments for going beyond win-win are quite straightforward. There are ethical issues and matters of responsibility that need to be addressed regardless of whether the company can derive any commercial benefit from it. However, in the political realm of multiple and competing interests and policy concerns it is more difficult to escape the clutches of win-win.

Imagine if von der Leyen would have said: “We need to make sacrifices in order for the green transition to happen. We need to slow down growth, it will cost jobs and we cannot guarantee that some people will not be worse off as a result’. It is a virtually unthinkable scenario. Not least because we know that it is the poorest and most vulnerable population groups that are bound to be worse off.   

The Magic of Danish Government Policy

That is to say, government as we know it does not represent a solution to the problem of widespread magical thinking about climate change and sustainability. It is very much part of the problem and there is no apparent escape. Not even for the most advanced nations in Europe. Let us take Denmark as an example. Denmark was just ranked 4th in the 2022 Climate Change Performance Index (CCPI). As the three top spots were left empty to signal that not a single country currently deserves a ‘Very high’ rating, Denmark is supposedly the leading country in the world measured on criteria regarding climate policy, renewable energy, energy use and GHG emissions. 

This is not to say, however, that Danish climate policy is bereft of magic. Quite the contrary. Dan Jørgensen, the Danish Minister for Climate, Energy and Utilities, has become famous for waving his own kind of somewhat oversized magic wand: ‘the hockey stick’. The hockey stick was originally used (by American climatologist and geophysicist Michael E. Mann) to illustrate temperature changes over time and the transition from the Holocene era (the long shaft) to the Anthropocene era (the short blade). There is nothing magical about this science-based graph.

However, the image of the hockey stick has in recent years been appropriated by management consultants and policy makers who are using it to serve instrumental and sometimes magical purposes. In the instrumentalized imagery, the bend between shaft and blade represents the (magical) moment of innovative/technological discovery, an inflection point allowing, ideally, for a transition from a period of inferior – ineffective, unsustainable – solutions (the shaft) to a period of superior solutions (the blade). 

Dan Jørgensen has been widely criticized for his espoused belief in a long shaft (gestation) period, that tends to become longer and longer and is so far marked by a lack of truly groundbreaking results and postponement of difficult decisions (particulary regarding implementation of a CO2 tax). On the one hand, the inflection point is continually moved further and further away. On the other, it is assumed that the magical moment of discovery and transformative change will happen in time for Denmark to be able to deliver on the Paris Climate Agreement and the even more ambitious Danish climate law. 

A concrete example of magic at work in Danish climate policy is the below image from the recent government action plan on green transition. Notice in particular the small miracle that is supposed to happen from 2029-2030, where all the technical reduction potentials on display somehow reach their target of zero. It seems magical. It is certainly not well explained in the action plan how this can come about – or why the reader should find this sort of technical forecast even remotely believable.

The Great Balancing Act: Magic and Reality

There is an upside and a downside to magical thinking and political talk and action that can be said to reflect magical thinking. Today’s magical ideas may turn out to be next year’s (or the next decade’s etc.) realistic solutions or courses of action. Magical thinking blends into notions of aspirational talk and aspirational policymaking, suggesting that lofty goals can help inspire, motivate and accelerate change processes. 

However, the downside is if magical belief in win-win solutions becomes a sort of self-imposed constraint or censorship standing in the way of open and honest discussions about the changes and sacrifices needed to make the green transition happen.

This can exacerbate accusations of greenwashing and create more public cynicism regarding climate policy and the willingness and ability of the political system to act proportionately. Magical ambitions needs to connect with harsh realities.

Further Reading

King, A.A. & Pucker, K.P. (2021). The Dangerous Allure of Win-Win Strategies. Stanford Social Innovation Review, Winter. Online first.  

Sjåfjell, B. (2018). Redefining the Corporation for a Sustainable New Economy. Journal of Law and Society, 45(1), 29-45.

About the Author

Steen Vallentin is Academic Director of the CBS Sustainability Centre and Associate Professor in the Department of Management, Society and Communication at Copenhagen Business School. His research is centered on CSR as a social and political phenomenon in the broadest sense, increasingly with a focus on corporate sustainability, circular economy and business model transformation – along with the politics and aspirational aspects of sustainable development more broadly. 

Heading photo by Kristopher Roller on Unsplash.

Unaccounted Risk: The Case of Sulfur Hexafluoride (SF6) in Offshore Wind Energy

By Esben Holst & Dr. Kristjan Jespersen

◦ 5 min read ◦

Carbon accounting provides a science-based measurement of greenhouse gas (GHG) emissions, achieving greater accountability of companies’ emissions causing global warming. GHGs are reported in CO2 equivalents (CO2e), meaning GHGs with widely different chemical qualities and environmental impact can be presented in a single understandable metric. However, the underlying methodology is debatable. This article questions whether the CO2e of Sulfur Hexafluoride (SF6) is misreported.

What is SF6 and why is it a hurdle for a green energy transition?

SF6 is used as an insulator in a wide variety of electrical equipment, mainly to prevent fires in incidents of short circuits. It is found in transformers inside windmills, offshore and onshore substations, and in power cables.

(Illustration to the left shows a sideview of a windmill turbine – Source: CAT-Engines. Right: an offshore wind energy system – Source: Nordsee One GmbH)

SF6 is a synthetic man-made GHG and cannot be reabsorbed naturally like CO2, meaning once emitted, it does irreversible damage. Most GHGs remain in the atmosphere around 100 years – SF6 remains for 3,200 years. These numbers are given by the Greenhouse Gas Protocol (GGP) based on calculations by the Intergovernmental Panel on Climate Change (IPCC). 

The IPCC’s metric Global Warming Potential (GWP), reveals environmental harm of a given GHG in CO2e. What then, makes SF6 problematic when converted into CO2e? SF6 has a GWP 23,500 times higher than CO2 – a value that is difficult to comprehend. The GWP metric is calculated using a 100-year timeframe based on GHG’s environmental harm. Yet, SF6 has an atmospheric lifetime of 3,200 years, essentially leaving 3,100 years of environmental harm unaccounted for. Using a simple logarithmic function incorporating IPCC data accounting for the missing 3,100 years, the GWP almost doubles. As illustrated below, this indicates how SF6 may be misrepresented in terms of environmental harm in CO2e emissions reporting.

As found by AGAGE – MIT & NASA, other worrying trends are observed. The atmospheric concentration of SF6 has more than doubled in the past 20 years. Luckily, its current concentration in the atmosphere remains low relative to other GHGs such as Methane or Nitrous Oxide.

Source: AGAGE

Regardless, the GWP of these two GHGs pales in comparison to the mindboggling detrimental effect of SF6 on the environment. Emitting this gas should therefore be strictly regulated.

Greenhouse Gas Emissions Reporting – Diverging Approaches

It only takes a little digging into offshore wind energy players to uncover diverging conversion methods of SF6 into CO2 equivalents (CO2e). The GHG emissions reporting methodologies of industry leaders use different emissions factors to convert SF6 into CO2e. An example of underreporting is illustrated by Vattenfall in their 2019 sustainability report, reporting SF6 as 15,000 times more potent than CO2. The emissions factor given by the GGP is 23,500. Ørsted uses a GGP emissions factor for the same gas in their 2019 ESG report. Yet, while Energinet also states it uses the GGP reporting framework in their 2020 CSR report, it uses an emissions factor of 22,800. The ownership distribution between Vattenfall and Ørsted in the Danish wind farm Horns Rev 1 of 40% and 60% respectively, thus blurs accountability and severity of reported emissions. As highlighted by the BBC, atmospheric concentration of SF6 is ten times the reported amount by countries. The IPCC and GGP are also aware of this.

During the past decade…actual SF6 emissions from developed countries are at least twice the reported values. (Fifth Assessment Report of the IPPC)

Measuring Impact of SF6 Leaks by Offshore Wind Players

SF6 emissions will rise exponentially alongside expanding electrified energy infrastructure using equipment containing this gas. This, together with repeated SF6 leaks, perpetuates the worryingly steep upward trend in atmospheric content of SF6 shown above. In 2020, Energinet reported a leak of 763.84kg SF6, or 17,950,240kg CO2e. The environmental impact of this leak is about the same as the emissions of 53 SpaceX rocket launches. Energinet has since admitted to years of underreporting of SF6, leading to amended SF6 emissions related to normal operations doubling.

Leaks of SF6 are too common. In Ørsted’s 2020 ESG report, a major leak at Asnæs Power Station was mentioned without disclosing the actual amount – withholding important risk-related data from investors. However, Energinet disclosed an SF6 leak of 527kg at that same facility in their 2020 CSR report. The leak for which Ørsted is responsible, yet feels is not material to disclose, is therefore potentially around 12,384,500kg CO2e. Indicating light at the end of the tunnel, Vestas has included SF6 on their Restricted Materials list since 2017, as well as introducing a take-back scheme for infrastructure containing this gas – setting a better example for business models of our green energy transition leaders.

Strengthening the Global Response to Climate Change Risk

It is vital that we understand SF6 is so detrimental to fighting climate change beyond 2100 that it has no place in sustainable business models today. Even if CO2 emissions are reduced in alignment with 2100 Paris Agreement goals, reporting in a 100-year timeframe will not save a planet billions of years old. GHG reporting must be better regulated and scrutinised in order to deliver a truly green energy transition. Releasing a gas causing irreversible damage cannot be an acceptable trade-off for a short-term “green” transition. While most company reports claim no alternatives exist, this is not true. Therefore, SF6-free equipment must be mandatorily installed.

A green transition goes beyond 2100, yet poor regulation enables energy companies to present SF6-CO2e favourably by using lower emission factors. Offshore wind energy players have not provided comparable, accountable, and transparent reporting – indicating stricter regulations on GHG reporting are necessary.

The Way Forward: Better Regulation

In 2014, an EU regulation banned the use of SF6 in all applications except energy after lobbyists argued no alternatives exist. The EU acknowledges the environmental harm of SF6, yet EU action has been described as inadequate. Asset managers, institutional and retail investors are exposed to hidden environmental risks related to SF6 in terms of double materiality. Double materiality referring to the financial costs related to management of SF6 incurred once completely banned. Non-financial reporting of GHG emissions and CO2e needs to be regulated far more than current global regulations. Investors, society, and most of all our environment deserves better protection.

NOTE: This article is based on a Copenhagen Business School (CBS) research paper in the course ‘ESG, Sustainable & Impact Investment’ taught by Kristjan Jespersen – Associate Professor at CBS – as part of the newly introduced Minor in ESG. The paper questions the greenness of wind energy by using the case of three large offshore wind energy farms in Denmark: Horns Rev 1 & 2 and Kriegers Flak. The findings are based on ESG, sustainability & annual reports from 2015-2019 of all involved OEMs, manufacturers, operators, and energy grid providers. Implications of the findings point to a coming hurdle within the electrification of a global green energy infrastructure transition. 

About the Authors

Esben Holst, an SDG and CSR research intern at Sustainify, is a Danish-Luxembourgish masters student at Copenhagen Business School. Besides attending the newly introduced Minor in ESG at CBS, his past studies focus on international business in Asia and business development studies.

Kristjan Jespersen is an Associate Professor at the Copenhagen Business School. He studies on the growing development and management of Ecosystem Services in developing countries. Within the field, Kristjan focuses his attention on the institutional legitimacy of such initiatives and the overall compensation tools used to ensure compliance.

Photo by Karyatid on Unsplash