On the Path to Decarbonization, Science-based Targets are Required
In mid-December, a historic global consensus was announced: the United Nations Climate Change Conference (COP28) nations agreed for the first time to “transition away from fossil fuels.” (UNFCC)
Though many have criticized this as a lukewarm outcome, for others, this announcement has boosted climate optimism, and it will contribute to the decarbonization momentum we’ve seen building in the last few years.
This year and at the last 27 COPs, diplomats, activists, scientists, and corporate leaders hobnob, encourage each other, and compare notes on their decarbonization wins and challenges. And this year, many discussions touched on one specific seachange: corporate emissions targets have gone from nice-to-have (a marketing tool, an indicator of corporate responsibility) to being essentially mandatory for regulatory compliance.
Current Regulatory Landscape
Regulations on corporate climate disclosures now include the EU’s Corporate Sustainability Reporting Directive (CSRD), California’s recent laws requiring climate-related risk reports, and the proposed U.S. SEC rule. These new regulations will soon require most medium and large EU and U.S. companies (both public and private) to:
Measure their Scope 1 and Scope 2 emissions;
Begin to measure their Scope 3 emissions; and,
Define their high-level strategy to mitigate climate-related risks
including emissions reduction targets.
Overview of Targets
In the same category as SMART goals (specific, measurable, achievable, realistic, and time-bound), a target often means setting a quantitative end-goal. Targets in any application provide clarity on where we’re starting (a baseline), specificity on where we need to be, and a defined urgency via a deadline.
Emissions are the hard-to-avoid outputs of your company’s operational systems. Accounting for each operational and value chain emissions source is complex. Emissions targets act as simplifiers and critical corporate communications tools.
By establishing targets, you are setting the direction for sustainability and operational work groups, driving and clarifying key decisions, and helping executives to understand the context, urgency, and value of your decarbonization strategy.
“Breaking down long-term goals into actionable targets makes the ambition more tangible and manageable. Regular monitoring of progress enables [entities] to learn and adjust in order to increase the effectiveness of actions.” - UNEP, Oct 2023.
What are “Science-Based Targets”(SBTs)
Recognizing the need for accuracy and clarity in global decarbonization efforts, climate-leading nonprofits collaborated to establish the Science-Based Targets Initiative (SBTi). The SBTi is a collaboration between CDP, the United Nations Global Compact, World Resources Institute, and the World Wide Fund for Nature. The major components and requirements of an SBT are:
A target year / deadline (“By 2030”)
It must be between 5 to 10 years of your commitment year.
A goal reduction (“45% reduction”)
A category of emissions (“For our Scope 1 emissions”)
A starting point (“Compared to our base year emissions in 2019”)
“Near-Term” Targets
Companies can set “long-term” targets such as: Net Zero by 2050. However, SBTs are near-term targets (between 5 to 10 years) and actually more important. Scientific consensus holds that we need “immediate and deep reductions”(IPCC, 2022), and echoing this, SBTi states on its website, “Halving emissions by 2030 must be the overarching priority for companies.” In other words, the work we do in the next 5 to 10 years is the most critical.
Here’s the context for this urgency:
Our baseline for comparison (our starting point) is the year 1880 when global surface temperatures were an average of 59 degrees Fahrenheit.
Since 1880, we’ve seen an increase of about 1.1 degrees C (1.7 degrees F)
By 2100, we need to ensure that global temperatures increase by no more than 1.5 degrees in order to avoid catastrophic outcomes (extreme weather, etc.).
To limit global warming to 1.5 degrees:
We need to ensure that global emissions peak no later than 2025.
We need to ensure net zero emissions / 95% decarbonization by 2050.
And to achieve the 2050 goal, we need to see a 45% decrease in emissions by 2030.
According to climate models, missing the above deadlines will put us at risk of “overshooting” the 1.5 degree maximum warming. In particular, climate modelers state that 2030 is critical. If we miss that global target for total emissions reduction, it will be difficult for us to move fast enough. Change and deployment of new technologies take time. Delayed action will make it very difficult and, overall, more expensive for us to achieve net zero by 2050. (Technological Forecasting, 2015)
Preparing to Set Your Targets & Achieving Validation
Companies must have calculated their base year Scope 1 and Scope 2 emissions.
The Science-Based Targets Institute (SBTi) provides a calculator to define your annual emissions reductions from base year to target year.
Science-based trajectory: an acceptable, science-based reduction equates to at least 4.2 percent annual reduction for Scope 1 and Scope 2 emissions and 2.5 percent annual reduction for Scope 3.
Apply and achieve validation through the SBTi website.
Once your targets are validated, your company and its target is listed in an online registry.
Examples of Emissions Reduction Targets
U.S. Federal Government
Net-Zero Emissions of Operations by 2050, 65% by 2030.
Not science-based because SBTi doesn’t validate government targets except cities.
Commitment via: Net-Zero Government Initiative - the U.S .and 15 other nations
EU / European Commission
Aims to be climate neutral by 2050, 55% by 2030 compared to 2090 levels.
Not science-based because SBTi doesn’t validate government targets except cities.
Commitment via: European Climate Law / European Green Deal
Patagonia
Reduce absolute Scope 1 and Scope 2 GHG emissions 80% by FY2030 from a FY2017 base year.
Reduce absolute Scope 3 GHG emissions 55% by FY2030 from a FY2017 base year.
Starbucks
50% absolute reduction in scope 1, 2 and 3 greenhouse (GHG) emissions representing all of Starbucks direct operations and value chain.
Apple
Achieve carbon neutrality for the entire carbon footprint by 2030, and reach emissions reduction target, and Create all products with net-zero carbon impact by 2030.
Benefits of Target Verification and Setting a Science-Based Target
A survey found that science-based target setting future-proofs growth, saves money, provides regulatory resilience, boosts investor confidence, and spurs innovation and competitiveness. Setting and disclosing emissions reduction targets also demonstrates a level of corporate maturity: accountability via sustainability commitments to your consumers and investors (SBTi 2023).
Common Challenges for Setting Corporate Emissions Targets
Companies that are in the early years of emissions work typically have a skeleton crew that is responsible for all ESG matters. With a small team, it can be difficult to develop the talking points that resonate and obtain complete data that is auditable. Sustainability leaders need to define the necessity, urgency, and point to the market landscape to first propose the idea of emissions reduction targets. From there, sustainability leads need to:
Map out core emissions reduction pathways that link up to meaningful Decarbonization Strategy.
Map out audiences and tailor messages for each audience: the board, C-suite, middle managers, and data owners – and anticipate the pain points of each group.
Simplify and visualize your company’s emissions profile.
Position emissions reductions as indicators of risk-management.
The TCFD and its sister framework, ISFR S2, are the gold standard for identifying climate risks.
Plan to engage and inform your communications team to help prepare for public annual reporting of your emissions, targets, and progress.
Uplift Can Help
As you start your journey on decarbonization and consider setting Science-Based Targets (SBTs), Uplift will be a valuable partner.
Let Uplift guide you to streamline processes, build out the integration pathways for decarbonization and sustainability throughout your enterprise and value chain, and provide activation energy needed to shift beyond business-as-usual.
The Uplift Agency
Uplift builds strategies, programs, and communication campaigns that advance ESG in workplaces, supply chains and communities.
We know how to navigate the road ahead because we’ve already been down it – 90 percent of our team has led environmental or social programs in corporations or nonprofits. Because ESG is all we do, our services are more comprehensive and integrated than most firms.
