This article provides a comprehensive guide on how to set a science-based target for your carbon emissions. We will explore the benefits of setting targets, the process, and the preparations needed before you commit to the target.
What is a Science-Based Target and Science-Based Target Initiative?
A science-based target is an emissions target that aligns with what climate science deems necessary to meet the goals of the Paris Agreement, limiting global warming to 1.5°C above pre-industrial levels. To limit global warming, it is imperative to reach net-zero emissions by 2050. It is also essential that companies set near-term goals, in the 5-10 year time frame, to start the emission reduction process. Near term targets focus on rapid and intensive emission reductions, while net zero targets focus on long-term deeper and more sustained efforts to decarbonize.
The Science-Based Targets initiative (SBTi) is a partnership between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF). SBTi provides companies with a framework to set science-based emissions reduction targets.
Who can set a Science-Based Target?
The private sector has a key role to play in limiting global warming and helping emission reductions by acting urgently to transform business models, decouple emissions from growth, and set science-based targets.
Companies from all sectors and any sizes can commit to a target. The SBTi does not currently assess targets for cities, local governments, public sector institutions, educational institutions, or non-profit organizations. SBTi offers a streamlined target validation process for Small and Medium-sized Enterprises (SMEs) (defined as independent company with fewer than 500 employees.)
Why should a company set a Science-Based Target?
To prevent the worst consequences of climate change, the world has to remain within a 1.5 degrees Celsius temperature rise over pre-industrial temperatures. This requires staying within a budget of carbon dioxide in the atmosphere.
What are the benefits of joining SBTi?
Reducing emissions in line with science to keep under the 1.5°C rise in global temperatures is good for business and the planet.
- Businesses who sign a commitment letter are recognized on the CDP, UNGC, and We Mean Business Coalition websites, demonstrating concrete commitments to eco-conscious consumers.
- The commitment also boosts investor confidence and provides preparation for upcoming regulations.
- The target validation process provides companies with detailed feedback and support from SBTi’s technical experts. It can spur innovation and increase competitive advantage while future-proofing the company against climate change risks.
What is the process for setting a science-based target?
Setting a science-based target is a five-step process:
- Commit: submit a letter establishing your intent to set a science-based target
- Develop: work on an emissions reduction target in line with the SBTi’s criteria
- Submit: present your target to the SBTi for official validation
- Communicate: announce your target and inform your stakeholders
- Disclose: report company-wide emissions and track target progress annually
SMEs can bypass the initial step of committing and the regular target validation process and immediately set near-term science-based targets for scope 1 & 2 emissions, and, optionally, net-zero targets, by choosing from one of several predefined target options.
Preparing to Commit to SBTi
Before committing to SBTi, you need to complete a full GHG inventory and calculations of your Scope 1, 2, and 3 emissions. All relevant Scope 3 activities need to be included in the Scope 3 emission calculations. In addition, see the section below to set net-zero targets.
Setting a Near Term SBTi Target
SBTi Near Term Target aligns with a 1.5 degrees C pathway and requires a 42% absolute reduction in Scope 1 and Scope 2 emissions by 2030, from a 2020 baseline. Scope 3 reductions are aligned with a well below 2 degrees C pathway and require a 25% emission reduction by 2030 from a 2020 baseline.
SBTi offers two approaches to setting targets: the Absolute Reduction Approach and the Sector-specific pathways for reduction.
The recommended method for Scope 2 reductions is to purchase 80% renewable energy by 2025, increasing to 100% renewable by 2030. If Scope 3 emissions are more than 40% of overall emissions, companies must set targets and/or set supplier/customer engagement targets. Near-term targets include engaging suppliers and customers to set their science-based targets in the 1-5 year time frame.
Absolute Reduction Approach (ACA)
The Absolute Reduction Approach ensures organizations across sectors deliver absolute emission reductions aligned with global decarbonization pathways.
Sectoral Decarbonization Approach (SDA)
The Sectoral Decarbonization Approach uses the sector context to set carbon intensity metrics and targets for carbon-intensive activities. The context recognizes the abate potential, including historical action, technology trends and the slower pace of decarbonization for certain carbon-intensive sectors.
The following sectors have sector-specific SBTi target guidelines: Apparel and footwear, Cement, Financial Institutions, Forest, Land & Agriculture (FLA), Information and Communication Technology (ICT), Maritime, and Power. The following sector-specific guidelines are in development: Aviation, Buildings, Chemicals, Oil & Gas, Steel, and Transport.
Target Types
- Absolute Targets – Specify a reduction in absolute greenhouse gas emissions
- Physical Intensity Targets – Emission reduction per unit of output or activity. The target is to reduce per-unit emissions by 7% year over year with adjustments for base years later than 2020.
- Economic Intensity Targets – Emissions in relation to economic value created by organization
- Renewable Electricity Targets – Commitment to increase the share of renewables in overall electricity consumption. The target is to purchase 80% renewable energy by 2025, increasing to 100% renewable by 2030.
- Supplier / Customer Engagement – Engaging suppliers or customers to set their own science-based targets and that cover a percentage of organization’s Scope 3 emissions.
What is the Corporate Net Zero Standard?
The Corporate Net Zero Standard is a framework that provides guidance for companies to set science-based net-zero targets. In addition to halving emissions across the value chain by 2030, companies must set long-term targets to cut all possible emissions by 2050, reducing emissions by more than 90%. After reaching the 90% reduction target, companies can neutralize remaining targets using permanent carbon removal and storage to offset emissions that cannot be eliminated. SBTi also incentivizes climate finance from the private sector to achieve net-zero emissions. By providing these guidelines, the Net-Zero Standard aims to provide a clear, consistent, and science-based definition of net-zero.
Guidance for Net Zero Targets
- Companies must have near-term targets before setting a net-zero target.
- Near term and net zero targets need to have the same base year.
- The organizational boundaries should also be aligned.
- The net zero target must be achieved by 2050 or sooner. The power and marine sector have a earlier target year, 2040.
- Emission reductions need to target 90 % of scope 1, 2, and 3 emission reductions. Any remaining emissions need to be “neutralized” through permanent carbon removal and storage.
Beyond Value Chain Mitigation (BVCM)
The SBTi recommends the following hierarchy for mitigating emissions: avoid, reduce existing emissions within the value chain, followed by investing in beyond value chain mitigation and then finally neutralization of any residual emissions.
Science-Based target setting for SMEs
SBTi offers a streamlined pathway to make target setting accessible to small and medium businesses. The SME pathway is an optional pathway; companies can choose to use the corporate path even if they meet the SME definition.
To meet SBTi’s definition of an SME, an organization has to meet all of the following criteria:
- Have <10,000 tCO2e across scope 1 and location-based scope 2
- not classified in the Financial Institutions (FIs) and Oil & Gas (O&G) Sectors
- not required to set targets using sector-specific criteria
- not a subsidiary of a parent company whose combined businesses fall into the corporate validation route
And 3 of the following 4 criteria:
- Employ <250 employees
- Turnover of <€50 million
- Total assets of <€25 million
- Are not in a mandatory FLAG sector
There are 4 types of targets available to SMEs within the absolute reduction approach:
- Near-term science-based targets: A 4.2% absolute annual reduction in Scope 1 and 2, based on a no earlier than 2015 baseline and a target between 5-10 years of submission.
- Maintenance targets: Maintain pre-achieved zero Scope 1 and Scope 2 emissions
- Long term targets: Reach net zero by 2050 on scope 1, 2 and 3 emissions with support from near term targets
- Net zero targets with a near-term time frame – Net zero emissions in 5-10 years.
Committing to SBTi can be a daunting task. If you need help measuring your carbon footprint, or committing to SBTi, Contact Us for a free guide and check out additional Carbon Accounting resources.
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