Singapore-based Grab and Indonesia's GoTo, the two biggest ride-hailing and delivery firms in Southeast Asia, are falling far behind their carbon neutrality pledge as their greenhouse gas emissions surged in 2022.
Both Grab and GoTo announced in 2021 to reach carbon-neutral or zero-emissions status. Grab aims to achieve this by 2040 while GoTo, operating in fewer countries, sets a goal of 2030.
However, Grab's carbon emissions surged by 123% to 3.35 million metric tons of CO2e between 2021 and 2022, while GoTo recorded a 19% increase in the same period to just under 1 million tons of CO2e, both are off track toward reaching their goals.
Most of the emissions in both cases are attributed to Scope 3 emissions, which refer to emissions from assets not directly owned or controlled by a company but are indirectly determined by the company's value chain.
In the case of Grab and GoTo, that means the large fleets of vehicles used for transportation and deliveries across Southeast Asia. For Grab, it owns more than 5 million vehicles, of which there were 65,000 in the Philippines before the pandemic. It is remarkable that during the pandemic, Grab's drivers decreased significantly by almost half in the Philippines, but emissions still surged.
In response to media inquiries about its surging emissions, Grab has highlighted several initiatives to reduce its environmental impact. Its latest ESG report claims that the company has eliminated 39,000 metric tons of greenhouse gas emissions by promoting the use of zero-emission and low-emission vehicles, such as bicycles for deliveries and electric or hybrid vehicles for transport services.
Grab has also emphasized that its decarbonization strategy considers its business expansion goals. However, the sharp increase in greenhouse gas emissions last year may have come as a surprise.
A Grab spokesperson told a media interviewer that the success of their carbon neutrality strategy largely depends on how fast they can get their drivers to switch to electric vehicles, which in turn depends on the readiness of the market for electrification.
Currently, only Singapore and Indonesia have plans to switch to electric vehicles by 2040 and 2050, respectively. Grab’s criticism toward the government is thinly veiled but justified.