Dec 21, 2020
The Paris Agreement of 2015 provided a goal for the world’s nations as they attempt to address climate change—limit global temperature increase to 2° Celsius above pre-industrial levels and, ideally, pursue an even more ambitious objective and keep the temperature rise to 1.5° or less. The consensus among climate scientists and the Intergovernmental Panel on Climate Change is that these targets must be met to minimize the destructive impacts of climate change.
While the Paris Agreement lays out targets for countries, achieving them requires the participation of private companies—whether compelled by mandatory guidelines or through voluntary reductions and the purchase of offsets in carbon marketplaces. Private companies are, in the end, responsible for much if not most greenhouse gas (GHG) emissions.
Science-based targets—independent calculations of the reductions that must be pursued by individual companies to achieve the 2°C maximum—are thus key to meeting national and international carbon reduction goals. As they promote innovation and establish consistent, sustainable goals, they help reduce GHG emissions and minimize global warming.
The term “science-based targets” refers both generally to goals set with the objective of keeping global warming to under 2° Celsius and to the targets created by a specific organization, the Science-Based Targets Initiative (SBTi) that was established in 2015, the same year as the Paris Agreement. SBTi is a joint collaboration of CDP (formerly the Carbon Disclosure Project), United Nations Global Compact, the World Resources Institute, and the World Wildlife Fund (WWF). Together, these organizations have created guidelines for setting ambitious yet achievable targets, a standard procedure by which companies may announce their intention to adopt science-based targets and communicate targets to stakeholders, and resources to assist in reaching the targets.
Under the SBTi’s program, businesses follow a standard process for adopting science based targets:
The three principal methods used to set targets are:
There are variations on these models that may be appropriate for certain companies in certain economic sectors.
A company’s emissions fall into three “scopes”:
Plans will typically address all of a company’s scope 1 and scope 2 emissions, while scope 3 emissions are often covered only in part.
Of the various formulas that exist for calculating science-based targets, companies are encouraged not to take the easy path and instead opt for the one that is most likely to result in emissions reductions.
While science-based targets are specifically concerned with GHG emissions and keeping global warming to under 2° Celsius, sustainability targets can cover a variety of environmental and social concerns. The United Nations, for example, adopted 17 Sustainable Development Goals in 2015. While some of them address GHG emissions and climate change, others (sometimes called traditional or context targets) are focused on areas like assuring access to clean drinking water and reducing inequality.
Many companies adopt their own sustainability targets in a variety of areas. They may commit to increasing the percentage of recycled content used in their products or to eliminating toxic materials from manufacturing processes. These steps may not principally be driven by a concern with reducing the company’s carbon footprint—the focus of science-based targets.
Even in the area of GHG emissions, companies can adopt targets without following the procedures established by the SBTi. For example, a company may unilaterally decide to reduce its carbon emissions by 50 percent over a certain period—a goal that may either fall short of or exceed what would be allowed under a target approved by the SBTi.
There are many notable benefits to companies who adopt science-based targets:
Global leadership. Those companies that step forward now to adopt science-based targets will benefit by being perceived as industry leaders. In a world where consumers are increasingly calling on companies to address climate change, including by adopting ambitious emissions reduction targets, the green choice is often a profitable one.
More than 1,000 companies have already collaborated with the SBTi to set targets and commit to a plan to adopt them. Among the 520 companies to set science-based targets (as of December 2020) are industry leaders like AT&T, Coca-Cola, and Hilton.
More than 300 companies have exceeded the Paris Agreement goal of limiting warming to 2° Celsius and have adopted the more ambitious goal of keeping warming to 1.5° Celsius or less. These companies include Colgate Palmolive, Gap Inc., and Johnson & Johnson.
Approximately another 500 companies, including Facebook and Gilead Sciences, have committed to adopting science-based targets and are in the 24-month period of determining appropriate targets and having them approved.
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