Lego, the renowned toy manufacturer, is making significant strides towards achieving its net zero objectives by introducing a mandate for its suppliers to establish short-term emissions reduction targets by 2026 as part of its new Supplier Sustainability Program. This move is essential for Lego to remain aligned with its target of reducing its carbon footprint by 37% by 2032 and ultimately reaching net zero emissions by 2050. Carsten Rasmussen, Lego’s Chief Operations Officer, stressed the critical role of sustainability in business operations and supplier selection, emphasizing, “Sustainability is not just an option but a fundamental requirement in how we conduct business, including our supplier partnerships. We have a vision and a roadmap, but we understand that this journey cannot be undertaken alone.”
The toy industry is responsible for approximately 26 million metric tons of greenhouse gas (GHG) emissions annually, yet it seldom commits publicly to addressing supplier emissions, making Lego’s recent announcement stand out. The Danish toy giant’s initiative is an extension of a program initiated in 2014 aimed at evaluating and mitigating the environmental impact of its key partners, involving 158 suppliers as of the latest sustainability progress report. The Lego Group’s pledge to achieve net zero emissions by 2050 encompasses Scope 1, 2, and 3 emissions, with a noteworthy 99% of its emissions originating from Scope 3 activities, which encompass the entire supply chain.
Setting a long-term objective is pivotal in ensuring the company meets its climate targets, with the immediate focus on attaining its carbon reduction goals by 2032. The toy manufacturer has implemented a range of initiatives to advance towards these goals, including a 60% increase in climate-related expenditure in 2023 compared to 2022. Key initiatives and progress in sustainability in 2023 include enhancing renewable energy capacity and production at various sites, reducing absolute emissions across manufacturing facilities, stores, and offices, and expanding renewable energy production in factories while procuring renewable energy for factories, offices, and stores.
Moreover, Lego has commenced the construction of a new factory in Vietnam and initiated work on another facility near Richmond, Virginia, USA, both equipped with solar facilities to match their total annual energy requirements. The company has bolstered its solar capacity investments by adding 2.2 MWp, elevating peak capacity to 15.6 MWp across production sites in Denmark, the Czech Republic, Hungary, Mexico, and China, representing a 16% increase from 2022. Plans are also in place to construct a solar park in Billund, Denmark, to cater to the energy needs of offices and sites in the town, anticipated to be operational by 2027.
Taking into account CO2 emissions in all business decisions, Lego has introduced shadow carbon pricing on key investments to promote low-carbon initiatives and ensure that emissions linked to new investments are considered before financial decisions are made. The company has established responsible travel guidelines to curtail employee travel, particularly international air travel, by 50% by 2032 compared to 2019. Furthermore, through the Engage-to-Reduce program established in 2014, Lego continues to collaborate with suppliers, with 158 suppliers engaged in 2023, marking a 14.5% increase from 2022.
Lego has committed to tripling its investment in environmental sustainability over the next three years, with expenditures exceeding $1.4 billion. This significant investment will support initiatives such as designing carbon-neutral factories and buildings, expanding renewable energy production and acquisition across its plants, offices, and stores, and integrating carbon dioxide emissions into all corporate decisions. This places Lego in alignment with industry counterparts Hasbro and Mattel, who have also made environmental pledges.
In 2022, Hasbro set targets to reduce greenhouse gases by 40% by 2030 and achieve net zero emissions by 2050, while Mattel committed to reducing plastic packaging by 25% per product by 2030. Plastic use remains a prominent challenge in the toy industry, accounting for nearly 1% of global plastic production. Although reducing plastics and cutting emissions may not always align, Lego is prioritizing finding alternatives to plastic. The company has explored over 600 materials, including bio-polyethylene utilized in botanical elements and Minifigure accessories, with 18% of the resin purchased for bricks in 2023 sourced from renewable or recycled materials mixed with virgin materials.
Furthermore, Lego is investing in global carbon reduction initiatives, such as supporting carbon capture programs like Climeworks. In 2023, Lego entered into an agreement with Climeworks, investing $2.4 million in their carbon capture and storage services. Climeworks specializes in extracting historical and inevitable CO2 emissions from the atmosphere through direct air capture and storage facilities, transforming the collected CO2 into stone through an accelerated natural process. This initiative underscores Lego’s commitment to addressing both current and historical carbon emissions, further bolstering its endeavors to achieve net zero emissions by 2050.
By implementing these measures, Lego is assuming a leadership role in sustainability within the toy industry, advocating for broader environmental responsibility and innovation among its suppliers and beyond.