When talking about sustainability, one cannot avoid the subject of carbon emissions. In order to combat global warming, it is of great importance that emissions of CO2 and other greenhouse gases are drastically reduced. Therefore, at VP Capital, we started mapping our carbon footprint in 2018 and taking measures to reduce it. We also decided to offset all our remaining carbon emissions.
For VP Capital the largest part of the emissions is indirect, namely from the companies in which we invest. We consider the scope 1 & 2 emissions of these companies, at the level of our participation, as our (shared) responsibility and therefore we include them for a large part of our investments in the calculation of our footprint.
We aim to eventually include 100% of our investments; however, this is not yet possible due to insufficient data. In 2022, we did include our investments in Mediahuis and listed companies for the first time.
- Scope 1 includes emissions that are a direct result of our business activities, such as the combustion of natural gas for heating and the combustion of petrol and diesel in commercial vehicles.
- Scope 2 includes indirect emissions from purchased energy, mainly electricity and heat. We have an impact on these emissions through our energy use, but the actual emissions take place, for example, at the power station where our electricity is produced.
- Scope 3 includes all other emissions that (indirectly) result from our business activities, such as emissions from business travel, purchased products and services, but also the carbon footprint of all companies in which we invest.
Science Based Targets
We want to reduce our CO2 emissions such that we are in line with the Paris climate agreement (climate warming < 1.5°C). To determine the targets needed to achieve this, we have joined and committed to the Science Based Targets initiative, a collaboration between Carbon Disclosure Project (CDP), UN Global Compact (UNGC), World Resources Institute (WRI) and World Wildlife Fund (WWF).
More on this initiative: Science Based Targets Companies
To this end, we have established reduction targets that have been validated by the SBTi against the principles and conditions that apply to financial institutions and private equity investors. In April 2022, our targets were officially approved.
Our Science Based Targets are:
- Scope 1+2 emissions: 46% reduction by 2030 compared to 2019. 100% Use of 100% green electricity;
- Scope 3 real estate investments: 73% reduction in emissions per m2 in 2030 compared to 2019;
- Scope 3 other investments: 53% of our private and publicly traded investments have validated Science Based Targets themselves by 2030.
These targets relate to VP Capital's own emissions, the companies in which it invests directly (HAVEP, Batenburg Techniek, Mediahuis, Q-lite, VP Landbouw and VP Textile), its real estate portfolio and listed companies, in total approximately 85% of VP Capital's total investment portfolio.
The status of our targets as of the end of 2022 is as follows:
Carbon Neutral Company
Offsetting emissions is possible by purchasing certified 'carbon credits'. VP Capital partners with CO2logic, a recognized specialist in the CO2 field, for this purpose. VP Capital has been offsetting its emissions in this way since 2019 and may therefore call itself a 'carbon neutral company', just like our portfolio companies VP Landbouw, Batenburg Techniek, Q-lite, HAVEP, Hydrowear and Van Heurck.
In 2022, CO2logic tightened the requirements for certification and introduced three different levels (Gold, Silver, Bronze). VP Capital has achieved Silver certification for 2022, which represents offsetting all scope 1 + 2 emissions plus all "material" scope 3 emissions. VP Capital aims to achieve Gold certification where 100% of all our investments / scope 3 - emissions are offset. At this time this is not yet possible due to the lack of availability of data.
The carbon credits purchased by VP Capital through CO2logic are "Verified Carbon Standard (VCS)" credits. This means that they are subject to strict requirements and conditions to ensure that they actually contribute to a decrease in the concentration of greenhouse gases in the atmosphere. The credits have been generated in the following projects:
- Reforestation & Conservation Zambia:
a reforestation project that teaches farmers farming methods that improve their livelihoods while protecting the forest. This is done through recognized sustainable land management and the REDD+ method (Reduce Emissions from Deforestation and forest Degradation). The project supports over 8,600 farmers and ensures the conservation of more than 25 million trees.
- Certified Climate Project Wind India:
a project involving the construction and installation of 223 wind turbines with a combined capacity of 233 MW. The project will supply clean, renewable energy to the electricity grid in three regions of India and stimulate the transition to a low-carbon economy.
- Efficient Burning Cookstoves India:
a project that focuses on distributing efficient cookstoves free of charge to users in various rural areas in India, who thereby no longer depend on firewood for cooking. This reduces deforestation, improves health and reduces greenhouse gas emissions.
- Sustainable Timber Plantations, Sierra Leone:
a project that repurposes inefficient land with the long-term aim of reaching 12,000 ha of sustainable plantation. This significantly reduces greenhouse gas emissions, provides sustainable timber and increased food production, and creates employment for the local community.
CO2 compensation via WeForest
In the coming years, VP Capital will of course work towards the realization of the above-mentioned climate targets. We will report annually on the progress in this regard, and on the actions we are taking.
However, after realizing the targets by 2030 at the latest (earlier is also possible), we are not there yet. Further reduction of emissions is needed, towards 'Net Zero'. This means that emissions are reduced to an absolute minimum and that any remaining emissions are neutralized in some way.
VP Capital plans to commit to these Net Zero targets as well. However, the guidelines and criteria involved are still under development for financial institutions and private equity investors and will not be set until 2023.
We are currently exploring whether we can invest more directly in projects that reduce greenhouse gas emissions. This would allow us to offset our emissions in the future with carbon credits from our own investments. We have now joined a small project involving the restoration and planting of a mangrove forest in Brazil. If that goes well, it can be scaled up.
The amount of greenhouse gases in the atmosphere can also be lowered by absorbing additional carbon into the soil. To further explore this, VP Landbouw and VP Capital have started a collaboration with Soil Heroes.