29 January 2024, Israel: Companies around the world are waking up to the importance of energy decarbonization and the pressing need to achieve carbon net zero within a generation. ICL is among the leaders in the systematic decarbonization of energy resources with its own flagship sustainable energy production projects.
Facing the Challenges of Climate Change
Climate change is a reality that directly affects every single person on the planet. It’s clear that the earth’s temperatures have changed – sometimes dramatically – throughout history. Our ancestors witnessed ice ages, while the barren Sahara desert used to be verdant grasslands. Our understanding of global climate patterns and fluctuations in average temperatures over time is still relatively limited, and the causes of current global warming are still the subject of scientific research.
One indisputable thing is that human activity, particularly the burning of fossil fuels, contributes to rising temperatures. As we face the consequences of a hotter planet, energy decarbonization and a generational shift to sustainable energy are urgent requirements. Since the Industrial Revolution, starting around 1,750, the burning of fossil fuels and deforestation rapidly increased. Twentieth-century population pressures exacerbated the situation, leading to an exponential increase in harmful greenhouse gasses.
The United Nations 2023 Emissions Gap Report alerts us to record high temperatures. An alarming 86 days saw temperatures exceeding 1.5°C above pre-industrial levels this year. The report also concludes that Paris Agreement goals for temperature control are unlikely to be met unless countries deliver on their commitments to transit to decarbonized energy production.
Climate change is a collective problem and the responsibility for tackling it extends beyond individual governments. Corporations also have a major role to play in the decarbonization of energy production and the implementation of environmentally friendly energy storage solutions. ICL was one of the first major companies to recognize its responsibilities and to see the potential long-term benefits of decarbonizing its own production of energy, implementing sustainable practices, and creating viable circular economies.
ICL’s Ambitious Decarbonized Energy Goals
ICL’s energy solutions are extremely ambitious, but its energy decarbonization goals are based on solid research, specialist knowledge, and detailed technical and financial evaluations. They also stem from the company philosophy that anything is possible when you have the right people in the right place, and give them the freedom and resources to make great things happen!
ICL understands the vital importance of energy decarbonization and is in the process of transforming its operations around the world to create a model of sustainability, built around both sustainable energy resources and a zero carbon footprint. These ambitious goals draw the baseline for all future enterprises. ICL (and its subsidiaries and partners) are focused on exerting a positive environmental and social influence whether they do business.
ICL’s Defined Energy Decarbonization Goals
ICL has already achieved an astonishing 18.1% reduction in GHG emissions since 2018. It has done so without compromising on its profitability or the scope of its operations. In fact, the transition to sustainability and the decarbonization of energy production is creating exciting new business opportunities around the world.
ICL is now well on its way to reaching two significant goals. The company is not simply following renewable energy trends, it is developing a model other organizations may follow.
- A 50% reduction in Scope 1 and 2 GHG emissions by 2030.
- Renewable energy to represent 50% of total energy consumption by 2040
- Full carbon neutrality by 2050.
ICL’s Alignment with Science-Based Targets (SBTi)
When ICL began decarbonizing the production of its energy requirements, the company’s energy experts quickly realized that there was a potential to supersede the original targets. The company had the resources, flexibility, talent, and most importantly the innovative mentality, to embrace the transition to decarbonized energy resources via sustainable hybrid micro-grids and a transition to electric vehicles.
Pleased by the success of early initiatives, the ICL Board of Directors and Management took a longer and deeper look at the question of what is renewable energy, and how it can power future business ventures. The company was attracted to the decarbonized energy vision presented by the Science Based Targets initiative and began to reevaluate its anticipated milestones on the road to carbon net zero.
In March 2023, the SBTI officially confirmed ICL’s commitment to setting a decarbonization plan. ICL is one of just 4,000 companies around the world committed to the SBTi target of limiting global warming to a maximum of 1.5°C above pre-industrial levels. The company has now pledged to annually disclose its company-wide emissions and progress in meeting its decarbonized energy goals.
The Role of Sustainable Agriculture and Mineral Exploitation
The concept of sustainable agriculture covers the entire spectrum of food production from field level enterprises to post-retail waste disposal. These processes traditionally created a considerable carbon footprint and other forms of negative environmental impact. ICL is making a major contribution to the development of sustainable agriculture, and also to related mineral industries.
The group has a century of experience in mineral exploitation, especially in the field of fertilizer production. ICL has a global reputation as a producer of sustainable fertilizers and for delivering precision fertilizer, irrigation, and crop management solutions (via Agmatix), reducing energy consumption and GHG emissions across the board.
Integrating Sustainability into Financial Strategies
As part of a holistic approach to decarbonizing energy systems and the wider introduction of sustainable practices, ICL is integrating sustainability into its financial strategies. These include the creation of tailored sustainability-linked financial instruments. The company also adapted KPIs for existing financial instruments and lending facilities to include climate strategy related sustainability and performance targets. ESG KPIs mandate a reduction in absolute scope 1 & 2 GHG emissions.
- In 2021, ICL raised a €250 million sustainability-linked loan (“SLL”).
- In 2023, ICL entered an innovative sustainability-linked credit facility agreement worth $1.55Bn.
The Importance of Quantifiable Results in Energy Decarbonization
Companies and other organizations that commit to reducing GHG emissions, or to making a permanent transit to decarbonized energy production, need to understand public expectations in order to reap a wider benefit for their commitments. One expectation is accountability. Consumers, as well as regulators, investors (and increasingly) employees expect to see quantifiable results.
ICL is proud of its achievements to date and of its ambitious future goals. Working from a 2018 baseline, the group has made significant progress and achieved challenging milestones. Since 2018, has achieved a Scope 1 GHG reduction of 62,000 tonnes or 4.2%. The Scope 2 reduction equals 338,000 tonnes, or an impressive 61%.
As part of the decarbonization roadmap, ICL has also significantly reduced the intensity of its GHG emissions. Intensity represents total Scope 1 and 2 GHG emissions calculated relative to sales in USD. In 2018 ICL GHG Intensity (emissions/Revenue – t/$M)) were calculated at 529. By 2022 they had more than halved to a level of 240.
Understanding ICL’s Decarbonization Roadmap
ICL is a global corporation with 38 plants in 13 countries with over 12,500 employees. The group has several divisions, covering industries as diverse as specialty minerals and fertilizers, products for battery manufacturers, AgTech solutions, and flame retardants. ICL’s comprehensive decarbonization roadmap spans continents and is creating profitable and efficient circular economies within complex manufacturing and production processes.
One of ICL’s flagship decarbonization projects is the Green Sdom initiative in Israel’s Negev Desert Sdom industrial site. The company is making a bold investment in converting the entire site into a green hybrid energy microgrid that will not only power ICL’s own plants but will eventually sell clean electricity back to the national grid. Green Sdom is one of the world’s most innovative and exciting electricity decarbonization projects. There is also a group-wide emphasis on optimizing power plants and eliminating waste and inefficiencies at all levels.
- A new ICL Dead Sea gas-fired CHP (combined heat and power) cogeneration plant with an impressive 80% energy efficiency.
- Replacing oil shale-firing for power generation at ICL Rotem with a gas-fired alternative.
- A global effort to install PV generation where applicable on ICL sites.
- Systematic transitioning to clean electricity and decarbonization at ICL sites in the US, EU, and Israel.
ICL also entered into a long-term power purchase agreement with Doral Energy in Israel. The company will purchase 75 million kWh of green electricity annually, for a minimum of 15 years. This strategic venture will reduce CO2 emissions by an estimated 500k tonnes.
ICL’s shift to decarbonization represents a fundamental transition from obsolete energy practices. It is a bold move that has been made possible by the company’s capacity for adaptation and innovation, its passion for new technologies, and its extraordinary sense of what is possible when talent is unleashed.
ICL: Governance and Strategy for Climate Action
The ICL Board of Directors views a commitment to climate action and sustainability as part of the company’s DNA. Carbon neutrality by 2050 is a strategic goal that requires expert implementation and oversight. The Board has appointed a Climate, Sustainability and Community Relations Committee (CSC Committee) to oversee and report on the entire spectrum of sustainability-related issues. These include:
- Climate change risk assessment and mitigation plans
- The ongoing development of renewable energy facilities
- Localized (site-specific) decarbonization plans
- The creation and improvement of circular economies at ICL sites
- Eliminating waste of water and other resources
- All policies relating to environmental impact, climate risk, and mitigation measures
The CSC Committee will also manage requirements for TCFD disclosure and ICL’s annual ESG Report, as well as the company’s sustainability KPI matrix & targets. The goal is not simply to implement innovative decarbonization and sustainability practices, but to deliver full transparency and demonstrate ICL’s level of commitment – and quantifiable progress – to clients, investors, and future partners.
Fostering Innovation for Sustainability
The global ICL Group began as a small desert-based startup, established to extract minerals from the barren Negev region a century ago. The company is built on innovation and a willingness to take calculated risks with new technologies. The same pioneering spirit is now focused on achieving sustainability and a comprehensive transition to green energy.
ICL utilizes a combination of internal teams and programs, and strategic partnerships to drive innovation. Examples include the Ambition Creates Excellence (ACE) program that has a key role in implementing the ICL decarbonization roadmap, focusing on promoting energy efficiency, reducing the company’s carbon footprint, developing circular economies, and optimizing water management.
- The Global Procurement Organization (GPO) and Sustainability Unit help to source renewable energy and develop renewable energy sources at ICL’s sites.
- The Global Energy Unit is developing and executing programs such as the ACE program mentioned above, that promote the ISO 50001 energy management standard across the organization, setting the standards for energy-consuming equipment and is continuously engaged in searching, evaluating, and promoting new technologies for improving energy efficiency, carbon capture and utilization (CCUS) and other footprint reduction opportunities.
- ICL’s research, Development, and Innovation (RD&I) organization is integral to the wider sustainability drive. Its brief is to factor sustainability requirements into all new products and technologies. These include advanced sustainable fertilizers, plant-based proteins, and energy storage solutions for renewable energy.
- ICL’s Open Innovation platform and Planet Startup Hub enable vital collaboration with like-minded entrepreneurs and startups to drive innovation across the sustainability spectrum. Food Tech and AgTech startups can benefit from the external accelerator and tap into ICL’s resources and knowledge to shorten the journey to market and profitability.
Navigating Climate-Related Risks and Opportunities
A fundamental transition to renewable electricity and decarbonization is a massive strategic shift that requires expert management. There are many obvious risks, as well as unforeseen hazards that are inherent in the adoption of any new technology or practice. ICL’s proactive management of climate-related risks and opportunities is key to the success of its strategic climate-related vision. As the company leads the way in developing sustainable practices, it is determined to protect its short, medium, and long-term financial resilience and viability.
ICL is operating in close alignment with the Task Force on Climate-related Financial Disclosures (TCFD) definitions and operating within the context of legal and regulatory risks such as carbon pricing mechanisms, changes to supply and demand, issues relating to litigation and reputation, and new technological developments.
ICL also operates a clear Enterprise Risk Management (ERM) policy. The ERM processes are designed to identify potential risks, reduce their likelihood of occurring, and create contingencies to mitigate the impacts of any negative events. The company uses advanced financial stress-tests models to evaluate the potential financial impact of various scenarios and has integrated ERM into its wider risk governance structure.
Celebrating ICL’s Sustainable Journey
ICL is not just a leader in several key industrial, agricultural, and technological fields, it is among the global leaders in the shift to decarbonization and the development of full-spectrum sustainable practices. The boldness of the Green Sdom project, the Amfert phosphate recycling unit and ICL’s other circular economy innovations are model projects that other businesses can study and copy.
Corporations have a huge role in the global push towards net zero carbon and the limitation of global warming. Leadership from the world’s board rooms and innovation from company R&D teams (and units like the Open Innovation platform and Planet Startup Hub) are as important as government policy initiatives.
There is an opportunity over the coming decade to transform industry, manufacturing, agriculture, and how we generate our energy supplies. The goal is to improve the environment and the lives of everybody on the planet. ICL has the experience, the resources, the human talent- a philosophy of innovation and pioneering spirit. The group is committed to completing its own decarbonization journey and to helping others to follow the same path.
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