Dive Brief:
- The Lego Group increased its overall investments in sustainability and the environment by 68% last year, compared to the prior years’ committed financing, according to the company’s latest sustainability report released Tuesday.
- The Danish toymaker said its green investments in 2024 were nearly three times what it spent on the sector in 2022. This jump aligns with a goal Lego established in 2023, which sought to triple its sustainability investments to $1.4 billion over three years..
- The retailer behind the popular children’s plastic bricks also said it made headwinds in making eco-friendlier products, noting that 33% of the raw materials purchased for producing Lego bricks last year came from renewable sources. Lego said an additional 3% of raw materials came from segregated sustainable sources.
Dive Insight:
Despite this progress, Lego Group CEO Neils Christiansen recognized that the company still has a long way to go when it comes to achieving its sustainability goals, which include a target to achieve net-zero greenhouse emissions by 2050.
“Our biggest challenge remains to decouple our growth from our greenhouse gas emissions,” Christiansen wrote in the sustainability report’s introductory note. “We recognise the need to go further to reach our goal of reducing GHG emissions … and we continue to look for improvements in our own operations, including investing in more renewable energy.”
Lego has also committed to reducing its absolute carbon emissions by 37% by 2032, compared to a 2019 baseline — a target the company previously told ESG Dive it was on track to meet. The company pledged to cut emissions by this margin in 2021, the same year it introduced its “Green Consumption Pledge,” which aligns with the Paris Agreement’s goal of limiting global warming temperature increases to 1.5 degrees Celsius.
The company’s CEO pointed to the Supplier Sustainability Programme Lego launched last year, which aims to accelerate the toymaker’s pathway to achieve its climate goals by enhancing collaboration with suppliers to curb the company’s carbon footprint. The initiative requires suppliers to report data on the amount of carbon linked to products and services purchased by Lego and asks them to set near-term targets demonstrating emissions curbed related to the manufacturing of these products by 2026, and later in 2028.
Such supplier information is important when assessing potential emissions cuts; over 99% of Lego’s carbon footprint is derived from indirect operations concerning its supply chain. This includes the transport and delivery of raw materials, equipment, products and services, per the company.
Last year, Lego also announced it will tie part of its salaried employees’ bonuses to its annual carbon footprint beginning in 2024. While the performance metric is primarily based on direct emissions — scope 1 and 2 — the company said at the time it aims to gradually expand it to include scope 3 as well. In the same May release, Lego also unveiled a new key performance indicator to measure emissions generated from its direct operations and business travel — a scope 3 category — and compare it to the amount of toy bricks manufactured in the same period. This comparison, according to Lego, allows it to attain a measurable “carbon intensity metric” that can be tracked over time.
The Denmark-based retailer said at the time that it established these compensation and performance metrics to motivate employees “to help make a positive impact” as the company aims to reduce emissions across its factories, stores and offices.
