Target-setting in line with science
In 2015, close to 200 of the world’s governments committed to prevent dangerous climate change by limiting global warming to well below 2°C in the landmark Paris Agreement. However, total human-caused carbon emissions continue to increase. Under current trajectories, global mean temperatures are projected to grow by 2.2°C to 4.4°C by the end of this century.
Your organisation has a pivotal role in ensuring that the global temperature goals are met, but most existing company targets are not ambitious enough to achieve this.
What are science-based targets?
Science-based targets (SBT) are greenhouse gas emissions reduction targets that are consistent with the level of decarbonisation that is required to keep global temperature increase within 1.5 to 2°C compared to pre-industrial temperature levels.
SBTs are consistent with the long-term goal of reaching net zero emissions in the second half of this century as per the Paris Agreement. SBTs provide a trajectory for companies to reduce their greenhouse gas (GHG) emissions.
The Science-Based Targets initiative (SBTi)
The SBTi is a collaboration between CDP, the United Nations Global Compact (UNGC), World Resources Institute (WRI), and the World Wide Fund for Nature (WWF). The SBTi enables you to demonstrate your climate change leadership by publicly committing to science-based GHG reduction targets.
The overall aim of the initiative is that by 2020 science-based target setting will become standard business practice and corporations will play a major role in ensuring we keep global warming well below a 2°C increase.
Components for science-based target-setting methods
SBT target-setting methods are complex and should be considered in the context of your operations and value chains. Generally, science-based target-setting methods have three components:
- Carbon budget (defining the overall amount of greenhouse gases that can be emitted to limit warming to 1.5°C and well-below 2°C),
- An emissions scenario (defining the magnitude and timing of emissions reductions) and,
- An allocation approach (defining how the carbon budget is allocated to individual companies).
Target setting approaches
There are three science-based target (SBT) setting approaches. As defined by SBTi:
- Sector-based (convergence) approach: The global carbon budget is divided by sector, and then emission reductions are allocated to individual companies based on its sector’s budget.
- Absolute-based (contraction) approach: The per cent reduction in absolute emissions required by a given scenario is applied to all companies equally.
- Economic-based (contraction) approach: A carbon budget is equated to global GDP, and a company’s share of emissions is determined by its gross profit since the sum of all companies’ gross profits worldwide equate to global GDP.
The SBTi recommends that companies screen available methods and choose the method and target that best drives emissions reductions to demonstrate sector leadership. You should not default to the target that is easiest to meet but should use the most ambitious decarbonisation scenarios and methods that lead to the earliest reductions and the least cumulative emissions.
An SBT should cover a minimum of 5 years and a maximum of 15 years from the date the target is publicly announced. Companies are also encouraged to develop long-term targets (e.g. out to 2050).
It is recommended that you express targets in both intensity and absolute terms, to track both real reductions in emissions and efficiency performance.
More information about the ‘absolute-based target setting’ approach
This method requires you to reduce their absolute emissions by the same percentage as required for a given scenario (e.g. globally or for a sector). Companies setting their SBT today would be strongly encouraged to adopt absolute abatement targets well in excess of 4% per year to be aligned with limiting warming to 1.5°C.
As an alternative to setting percentage reduction targets for Scope 2 emissions (electricity consumption), you can set targets for the procurement of renewable energy. Acceptable procurement targets are:
- 80% of electricity from renewable sources by 2025, and
- 100% of electricity from renewable sources by 2030.
If you already source electricity at or above these thresholds, you should maintain or increase your share of renewable electricity.
How to commit to and announce a science-based target
The following steps are required to commit to and announce an SBT.
- Commit to set a science-based target (internal)
- Develop a target (internal)
- Submit your target for validation (to SBTi)
- Announce the target (public)
Criteria for SBTs
To ensure their rigour and credibility, SBTs should meet a range of criteria.
- An SBT should cover a minimum of 5 years and a maximum of 15 years from the date the target is publicly announced. You are also encouraged to develop long-term targets (e.g. up to 2050).
- The boundaries of your SBT should align with those of your carbon inventory.
- From October 2019 the emissions reductions from Scope 1 and 2 sources should be aligned with a 1.5°C decarbonisation pathway.
- SBTs should cover at least 95 per cent of your Scope 1 and 2 emissions.
- You may set targets that combine scopes (e.g., Scope 1+2 or Scope 1+2+3 targets).
- The Scope 1 and 2 portion of a combined target can include reductions from both scopes or only from one of the scopes. In the latter case, reductions in one scope have to compensate for the other scope.
- You should use a single, specified Scope 2 accounting approach (“location-based” or “market-based”) for setting and tracking progress toward an SBT.
- If you have significant Scope 3 emissions (over 40% of total Scope 1, 2 and 3 emissions), you should set a Scope 3 target.
- Scope 3 targets generally need not be science-based, but should be ambitious, measurable and clearly demonstrate how you are addressing the main sources of value chain GHG emissions in line with current best practice.
- The Scope 3 target boundary should include the majority of value chain emissions; for example, the top three emissions source categories or two-thirds of total Scope 3 emissions.
- The nature of a Scope 3 target will vary depending on the emissions source category concerned, the influence you have over your value chain partners and the quality of data available from your partners.
- You should periodically update your SBTs to reflect significant changes that would otherwise compromise their relevance and consistency.
- Offsets and avoided emissions do not count toward SBTs. The SBTi requires that you set targets based on emission reductions through direct action within your own boundaries or your value chains. Offsets are only considered to be an option if you want to contribute to finance additional emission reductions beyond your SBT.
Upcoming changes to submission of SBTs
In October 2018, the Intergovernmental Panel on Climate Change (IPCC) released its Special Report on Global Warming of 1.5 °C (SR15), which was the IPCC’s first major update since its Fifth Assessment Report (AR5) released in 2014.
The new report makes a very strong case about the benefits of limiting warming to 1.5°C and highlights the severe risks and impacts of reaching 2°C of warming. It provides new emissions pathways for limiting warming to 1.5°C and well-below 2°C.
Informed by SR15, in April 2019 SBTi released updated target validation criteria, target validation protocols, technical resources and tools to enable you to set targets in line with the level of decarbonisation needed to achieve the Paris Agreement.
This means that as of October 2019, the SBTi will no longer accept targets in line with 2°C. Existing targets in line with 2°C will continue to be valid and will be labelled as 2°C targets on the SBTi website.
Mandatory target recalculation
To ensure consistency with most recent climate science and best practices, targets must be reviewed, and if necessary, recalculated and revalidated, at a minimum every five years. If you have an approved target that requires recalculation, you must follow the most recently applicable criteria at the time of resubmission.
100% Renewables are experts in helping organisations develop their carbon reduction and renewable energy targets and pathways. Developing baselines, projecting your emissions and knowing how you can reach identified targets can be complex. If you need help, please contact Barbara or Patrick.
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