In the race to a net-zero future, science-based targets serve as a key driver of decarbonization. Science-based targets show companies how much and how quickly they must slash their greenhouse gas (GHG) emissions to meet the Paris climate goals and prevent the worst effects of climate change. In this article, we will explain the key elements of this commitment framework.
What is the Science-Based Targets initiative?
The Science-Based Targets initiative (SBTi) was founded in 2015 as a partnership between CDP, the United Nations Global Compact, World Resources Institute (WRI), and the World Wide Fund for Nature (WWF).
It was formed to help mobilize the private sector to take urgent climate action by setting science-based targets that help companies tackle global warming while seizing the benefits and boosting their competitiveness in the transition to net-zero. The global program is voluntary, but its call to action of setting science-based targets is a key commitment required for membership of other climate action campaigns such as the We Mean Business Coalition.
The initiative defines and promotes best practice, provides resources and technical guidance, and independently assesses and approves companies’ targets.
Key commitments required for a science-based target:
- Targets must be in line with what the latest climate science deems necessary to keep global warming well-below 2°C above pre-industrial levels. Companies are encouraged though to pursue greater efforts towards a 1.5°C trajectory.
- Targets must cover company-wide scope 1 and scope 2 emissions.
- A scope 3 target is required if scope 3 emissions are 40% or more of total scope 1, 2, and 3 emissions.
- Targets must cover a minimum of 5 years and a maximum of 15 years.
- The use of offsets cannot be counted as emissions reduction.
- Avoided emissions do not count toward science-based targets.
- Targets must be modeled using the latest version of methods and tools approved by the initiative.
- Publicly reporting on progress against targets is required annually.
- Targets must be reviewed, and if necessary, recalculated, and revalidated, at least every 5 years.
Of course, the exact specificities for setting a science-based target are more technical and can be viewed in the full criteria, recommendations, and guidance provided by the Science-Based Targets initiative (SBTi), but this list highlights the most important commitments.
Indeed, different challenges face each sector on the journey to meeting the Paris climate goals. Recognizing this, SBTi has developed sector and industry-specific methodologies, frameworks, and requirements in order to assist companies across all sectors to join climate leaders setting science-based targets.
For the built environment, sector guidance is still in development, but plans are in place to make available the resources developed through webinars and/or workshops in the future.
SBTi’s new net-zero standard science-based target
With sustainability now top of mind among business leaders, there has been a mainstream acceptance of the need for a net-zero target. In 2019, net-zero pledges covered 16% of the global economy. By 2021, almost 70% had committed to achieving net-zero by 2050.
However, many targets are hampered by the fact there is not a plan in place on how to reach the goal. Thus, a need emerged for a common standard for net-zero targets that would answer the three questions of what’s covered, what counts, and by when.
To fill this void, in October 2021 SBTi introduced its new net-zero standard. Its main objective is to provide a science-based means to assess net-zero pledges.
Key commitments required for a net-zero science-based target:
- Make rapid, deep cuts to value chain emissions. The net-zero standard covers a company’s entire value chain (scope 1, 2 & 3). Most companies will require deep decarbonization of 90-95% to reach net-zero under the standard.
- Set near and long-term science-based targets for reaching zero emissions. This means making rapid cuts now, halving emissions by 2030 and producing close to zero emissions by 2050, while neutralizing any residual emissions that are not possible to eliminate (carbon offsetting is allowed for final 5-10%)
- Go beyond the value chain by making investments outside of science-based targets to help mitigate climate change elsewhere. But companies must follow the mitigation hierarchy of committing to reduce their value chain emissions before investing to mitigate emissions outside of value chain.
- Companies should also publicly disclose how additional actions beyond value chain are financed.
- No net-zero claims should be made until long-term targets are met.
With a common standard now in place, the inconsistencies plaguing net-zero targets will now be eliminated. In the past, bad targets could be misleading since some companies set targets that only covered operational emissions, despite the fact downstream emissions are much higher.
Similarly, companies that previously relied heavily on offsets sent a message that they were not likely to change their business model to align it with climate goals. Now, with a common standard in place, it’s easier to validate the quality of net-zero targets and their collective impact has been strengthened.
Once your organization has made the decision to set a science-based target, it’s a five-step process:
- Commit – Submit a letter to the SBTi confirming your company’s intent to set a science-based target.
- Develop – Begin working on an emissions reduction target aligned with the SBTi’s criteria, recommendations, and guidance.
- Submit – Present your company’s target to the SBTi for official validation.
- Communicate – Announce your company’s target and inform your stakeholders.
- Disclose – Report company-wide emissions and progress against targets on an annual basis.
To meet the goals of the Paris Agreement, we will need to reduce by half our collective GHG emissions by 2030 and cut them to zero-carbon emissions by 2050. Science-based targets lie at the heart of this process providing a roadmap with technical guidance for companies to set high-quality science-based targets and make the transition to zero-carbon.
Currently, over 2,800 companies are taking action against climate change by committing to science-based targets. With more than 1,500 of these companies based in Europe, it is leading the way. Asia is a distant second with more than 580 companies, while North America is third with over 450 companies. At the sector level, professional services is the industry with the most companies having committed to science-based targets with over 230, while food and beverage processing is second with close to 200, and textiles, apparel, footwear, and luxury goods third with over 170 companies.
While science-based targets are undoubtedly good for the environment, they are also good for the bottom line, with business benefits including strong investor confidence, resilience against regulation, increased innovation, competitive advantage, and strengthened brand reputation