Workday achieved net zero carbon emissions and 100% renewable electricity ahead of schedule, but the company sees that milestone as a foundation rather than an endpoint. In this episode, Melissa Fifield, Head of the BMO Climate Institute, speaks with Erik Hansen, Chief Sustainability Officer at Workday, about how corporate climate strategies are evolving beyond traditional emissions reductions and an important element of business strategy.
As climate expectations from customers, employees, and investors continue to rise, Workday is expanding its focus to include carbon removal, methane reduction, sustainable aviation fuel, internal carbon pricing, and data-center efficiency.
The conversation examines how organizations can prioritize climate action, evaluate emerging carbon market opportunities, and navigate growing energy demand associated with AI. Hansen also shares lessons from Workday’s experience integrating climate considerations into business strategy while continuing to pursue ambitious emissions-reduction goals.
Below are highlights from the podcast:
What made Workday move early and aggressively when it comes to net zero?
When we look at what we're doing around environmental sustainability, whether we're talking about data center electricity, business travel, what our own employees are doing, or the products that we're providing to our customers, we look at those core values and say: What do our employees expect? What do our customers need? What's high integrity? What's high innovation? That intersection is really where we tend to focus.
Walk us through what are the component pieces of your strategy today?
We have a commitment to achieve net zero residual emissions across our boundary of operations. It's really all of the emissions across our global offices, our global data centers, our public cloud infrastructure providers, our footprint with those public cloud providers, and then our business travel.
First it's how do we reduce our emissions. The cornerstone, I think, of any climate program on the corporate level is reductions first. We have set near-term science-based targets and are in the process of refreshing those targets.
Then it becomes how do we buy renewable energy, because a huge chunk of that emissions footprint that we're trying to mitigate is essentially electricity. We also have residual emissions, and for us market-based instruments come into play. There's a small amount of sustainable aviation fuel that we'll procure for our aviation footprint. Then we're really using an internal price on carbon to assign costs to each part of our business and use those funds to procure high-integrity, high-impact carbon credits across a variety of project types.
How are you evaluating the types of credits that you're purchasing, the types of projects that are worth backing?
We try to apply a really consistent set of criteria. First it's additionality. Think of it as: is the finance that we're providing going towards something that's not business as usual?
Then permanence. We're looking at permanence. Is this permanently sequestered carbon for centuries, not just decades? Would this happen without our investment? That's the additionality. And then any sort of rigorous third-party verification to global standards at the project level.
Can you talk a little bit about how you're thinking about methane and super pollutants specifically as part of that portfolio?
We're actually part of an initiative called the Super Pollutant Action Initiative, which is a $100 million commitment through 2030 alongside brands like Amazon, Google, and others.
We saw a brand-new project type that was really starting to come to the surface, and that was plugging orphaned oil and gas wells.
Absent carbon finance, those wells are not going to be plugged themselves. Our climate finance, our dollars, are going to do something that business as usual would not address. It's very compelling for us and catalytic.
How are the investments that you're making in climate solutions and sustainability showing up for the business?
The most direct business case is increasingly we are seeing our customers have expectations about us as a major supplier to them that we are mitigating our residual emissions.
Many of our customers have climate targets of their own, and their climate targets often flow down into their supply chain. We're part of that Scope 3 footprint for our customers.
Over the past 10 years, it's moved from a nice-to-have in many ways, especially with large enterprise customers, to an expectation. When we do things like our super pollutant work, we can differentiate ourselves amongst our competitors and say we're not just fulfilling the expectation, but we're trying to go above and beyond.