If you’re reading this, it’s likely because your organization has either joined the more than 300 other leading organizations around the world that have committed to setting a science-based greenhouse gas emissions reduction target or are considering it. Adopting a science-based target can distinguish your organization as a leader in environmental management and move your organization towards increased efficiency and more resilient operations.
The Science-based Targets Initiative (SBTi) is a collaboration of four nonprofit organizations that define best practices and promote awareness of science-based targets. According to the requirements of the SBTi, companies must adopt a target within 24 months of officially committing to set a target through the SBTi. If your company hasn’t already set a target prior to committing, it’s important to immediately begin the process of developing an internal target. Doing so will ensure that you have sufficient time to develop a target that meets all SBTi requirements and receive buy-in from all levels of your organization.
Based on our experience assisting many clients with the process of setting ambitious, yet achievable science-based targets, we recommend the following three steps.
1. Screen Scope 3 Emissions. The first step in setting a science-based target that aligns with SBTi’s requirements is to screen Scope 3 emissions. Scope 3 emissions are emissions produced outside of your organization, including a wide variety of emissions produced throughout your organization’s value chain. Examples include emissions from the use of products your organization manufactures, purchased goods and services, and waste. The SBTi requires that if Scope 3 emissions account for over 40 percent of your organization’s total Scope 1, 2, and 3 emissions, then you must set a Scope 3 target, along with a science-based target for Scope 1 and 2 emissions.
A Scope 3 target does not need to be science-based and can include only the emissions categories that your organization has control over. However, your organization will need to screen Scope 3 emissions to understand if your organization must set a Scope 3 target and ensure that the target covers a majority of your organization’s Scope 3 emissions.
To screen Scope 3 emissions, your organization must identify all of the 15 categories that are relevant to its operations and, if possible, quantify emissions in each category. If it’s not possible to quantify emissions in one or more of these categories, it’s important that your organization estimates those emissions in order to meet the SBTi requirements and ensure that the target you develop will be approved by the SBTi.
2. Assess Target Methods. The SBTi has approved seven methods your organization can use to develop a science-based target, plus the absolute contraction approach that requires all companies to reduce emissions by at least 1.7 percent each year. The best method for your organization will depend on your sector, your desired base year and target year, and whether you want to set an absolute or intensity-based target. The methods vary greatly in complexity and require different data inputs.
At a minimum, your organization will need a recent, complete inventory of Scope 1 and 2 greenhouse gas emissions. Some of these methods also require data such as total profit, growth, or value added, along with other indicators that vary by sector. To identify the method best suited to your organization’s goals, we recommend using three or four applicable methods to develop targets so you can fully understand differences between the methods and how different assumptions impact the results produced by each method.
3. Develop an Emissions Reduction Strategy. Meeting a science-based target will be challenging for most organizations, and will involve investments of time and capital. Thus, to develop a target that meets SBTi requirements and is achievable, it is important for your organization to develop a strategy that broadly assesses emissions reduction opportunities, adopts the criteria your organization will use to compare and prioritize emissions reduction investments, lays out the business case for adopting a target, and identifies the sources of funding for investments in reducing emissions. Developing an emissions reduction strategy prior to setting a target and publicizing the results‚ both publicly and throughout your organization‚ will begin the process of integrating an emissions reduction target into your organization’s business strategy. In addition, planning how your organization will meet its emissions reduction target will help you set an achievable goal. It will also likely ease the internal approval process, as your executive leadership will appreciate a roadmap and business case for how your organization will meet its target.
Completing these three steps before submitting a science-based target to the SBTi for approval can help you develop a prudent target, facilitate the approval process, and start your organization on a successful path to meeting its reduction targets. Cadmus is well positioned to help you with all of these tasks.
We have helped numerous small and large companies, universities, and government agencies quantify greenhouse gas emissions, develop climate and sustainability plans, implement reduction initiatives, and adopt energy and emissions reduction targets. To learn more about Cadmus’ greenhouse gas and sustainability consulting or to engage in a 15 minute complimentary coaching session around setting a science-based target, contact us.