A new focus in corporate response to climate change is the setting of carbon reduction targets that are in line with scientific recommendation. Why is this a logical step?
If no action is taken, the average global temperature is on course to warm by 3.7–4.8°C by the end of the century. This is according to the International Panel on Climate Change (IPCC), the largest body of scientific opinion on global warming. In order to limit the warming to just 2°C – the threshold agreed by governments at the Paris climate negotiations as the limit to prevent the worst climate change impacts – global emissions need to peak within the next ten years and then reduce by 41-72 per cent by 2050 compared to 2010 figures, with the ultimate goal of net zero emissions within the second half of the century.
Another way of looking at this is through the lens of a carbon budget, which tells us that there are only 1 000 gigatonnes of carbon dioxide left that we can emit into the atmosphere.
Whichever way you look at this issue, operating within these limits is an ambitious goal. If business takes climate change seriously, then it needs to play its part and, in doing so, can be transformational in directing the world towards a decarbonised future.
The Science Based Targets initiative (SBTi) was established in partnership between the CDP, the United Nations Global Compact, the World Resources Institute and World Wildlife Fund. It works in close tandem with We Mean Business, an international coalition of private and non-profit organisations dedicated to driving the business benefits of a low carbon economy.
To date 212 companies have signed declarations of intent to develop science-based carbon reduction targets, of which six are South African – Mediclinic, Woolworths, Netcare, Pick n Pay, Tiger Brands, Tongaat Hulett.
Companies that have already set their targets include Sony, Coca-Cola and Nestle.
How Science-based targets are set
There are at least seven target setting methodologies promoted by the SBTi, which take different factors into account. These include the economic sector/s that a business operates in; the geographies of its operations; and, whether it is setting an absolute or intensity-related target.
Choosing the correct methodology is an important process, and sometimes more than one methodology should be used to gain a true understanding of a company’s emissions reduction requirements.
Once a target has been set, it should then be submitted to the SBTi for validation that it does indeed abide by the scientific reality of climate change.
Benefits to business
In addition to lending credibility to a company’s carbon management efforts, science-based targets can drive innovation within its operations and unlock competitive advantage and financial gain by building a more climate resilient business model and avoiding the dangers of fossil fuel price fluctuations.
The international investor community continues to analyse companies’ carbon performance. By linking a carbon reduction target to that indicated by scientific consensus demonstrates a company’s true understanding of climate change and appropriate (and proportional) response strategies.
Carbon Calculated is currently assisting two of its clients with the setting of science-based targets. If you would like to find out more, please contact email@example.com.