Okta’s climate targets: Progress and opportunities one year in

Climate change is the crisis of this generation and no longer a question of “when’” for companies but instead a question of “how.” Our customers and investors increasingly expect more from Okta. We are also closely monitoring the global transition from voluntary disclosure and target-setting to mandatory regulatory compliance. We are taking steps to reduce our environmental footprint and to respect the right to health and clean air, particularly as climate change disproportionately impacts communities of colour and low-income communities. This is our annual update on our progress, challenges we have faced, lessons learned, and where we will focus our future efforts.

Okta’s Climate Strategy and Targets 

Our climate strategy has four pillars — starting with reducing our energy consumption. 

Okta has two primary climate commitments: 100% renewable electricity to match electricity consumption from our global offices, remote workforce, and third-party cloud service providers, and science-based targets (SBTs) to:

1. Reduce absolute scope 1 and 2 greenhouse gas (GHG) emissions by 67% by FY30 compared to FY20 baseline
2. Reduce absolute scope 3 GHG emissions from business travel and employee commuting transportation by 42% by FY30 compared to FY20 baseline
3. Ensure that 65% of Okta’s suppliers have science-based targets by FY27

Progress 

In FY23, we expanded our 100% renewable electricity program to include third-party cloud services, in addition to purchasing renewable electricity to match 100% of the annual electricity consumption of our global offices and the estimated consumption of our remote workforce. We’re currently focused on purchasing electricity attribute certificates (EACs) to match our global electricity consumption. In the US, where EACs are known as renewable electricity certificates (RECs), we aim to purchase RECs with an accompanying social benefit, such as community solar and solar from California public schools. Within our global renewable electricity program, we increased the percentage of social benefit RECs from 68% in FY22 to 82% in FY23. 

When looking at our progress towards our three SBTs:

1. Real estate footprint (scope 1 and 2): In FY23, our scope 1 and 2 market-based emissions increased by 8% from FY22 as a result of our continued global expansion. During FY23, Okta opened three spaces: our New York Experience Centre and our Paris and Tokyo offices.

   Our emissions have decreased 76% since our FY20 baseline, in large part due to the continued achievement of our 100% renewable electricity commitment and efforts to rightsize our office space.
    

2. Business travel target: This year (FY24), we launched a comprehensive Sustainable Travel Guidebook to educate employees, paired with a Smart Sustainable Travel Game to incentivise them to rethink their travel decision-making process. The Environmental, Social, and Governance (ESG) and Sustainability teams partnered closely with the Travel team to incorporate sustainability language into Okta’s travel policy and with Finance and Data Analytics to ensure we continuously share additional data around our travel progress with leadership. 

   Due to our growing and globally dispersed workforce, as well as a return to post-COVID office and travel norms, our recent years' travel activity has increased approximately 30% compared to our FY20 baseline. We’re working within Okta and with external partners to supplement the policies and practices already in place to support our pursuit of this SBT. 
    

3. Vendor engagement target: This year (FY24), we requested that Okta’s strategic vendors set SBTs. We provided resources and educational materials on how to conduct GHG inventory, set targets, and reduce emissions. We conducted follow-up calls to support vendors in understanding Okta’s expectations. We are partnering with our Strategic Sourcing and Procurement team to continually embed sustainability considerations across the lifecycle of the vendor’s interactions with Okta.

As of last year, FY23, 13% of our vendors by spend had set validated SBTs.

Watch our Oktane Online session recording, “Identity & Sustainability: working together to achieve our climate goals,”  below.

What we’ve learned

We’ve learned many things since launching our sustainability work, including the following:

1. Vendor selection and engagement can drive significant impact, as Okta’s value chain generates the majority of our emissions. We have the opportunity as a software company to leverage our purchasing power while recognising we are largely reliant on suppliers’ willingness to take action. Another challenge is that, for most of our vendors, we currently use spend as a proxy for emissions. This is allowed by The GHG Protocol and reduces the burden on suppliers to provide custom GHG data for our usage, but it reduces the accuracy of our emissions calculation.
2. We need to continue prioritising new leases that are in electric or highly energy-efficient buildings with green building certifications, such as LEED, to achieve our scope 1 and 2 emissions reduction targets. This can be challenging depending on the local building stock available and typically comes at a premium price. We are pushing to sub-meter our space in buildings to gain the benefits of energy efficiency measures implemented during office build-outs and refreshes. As we lease office spaces and do not own them, our sustainability progress with new and existing leases relies on active engagement with landlords.
3. Aligning incentives across the business is key, particularly during a turbulent macroeconomic environment. We lean on our ESG governance structure to influence and educate executives. To drive progress in our program, we continually build the business case for how this drives long-term success for Okta.
4. Absolute travel emissions reduction is hard. For example, sustainable aviation fuel (SAF) is relatively nascent and expensive; electric flights are not yet available for most short-haul commercial flights; and limited high-speed rail exists in the US. We made a small purchase of SAF certificates, as we want to be part of the market signal of the importance of reducing aviation emissions. We are focusing on reducing unnecessary air travel by offering virtual options for meetings and events, bundling trips to reduce total trips, and encouraging rail (vs. short-haul flights) in Europe. 

Our focus going forward

Priorities for the coming year include collaboration, conducting climate scenario analysis, and innovation. We will continue collaborating with vendors, customers, and other companies, through direct partnerships and the Business Council on Climate Change (BC3). We plan to expand our climate risk assessment to include scenario analysis. We’ll also continue contributing to innovation in the ecosystem by supporting organisations like the Sustainable Aviation Buyers Alliance and BC3.

For more information, see our energy and climate page.