Smart companies understand the risks posed by climate change and demonstrate leadership by setting science-based greenhouse gas reduction targets.
More than eighty percent of the world’s 500 largest companies established emission reduction or energy-specific targets in the 2014-15 financial year, according to CDP. Clearly, the business community is invested in preventing the adverse consequences of climate change and seizing opportunities in the new low-carbon economy. The next step in protecting that investment is to ensure that greenhouse gas reduction targets are set at the rate consistent with the pace recommended by climate scientists to limit the worst impacts of climate change. Science Based Targets is a joint initiative by CDP, the UN Global Compact (UNGC), the World Resources Institute (WRI) and WWF that raises the ambition of corporate mitigation efforts and drives bolder business solutions by identifying and promoting innovative approaches to corporate greenhouse gas (GHG) target setting.
Find out more about the call to action - download the brochure. It is available in English, Spanish, Japanese and Portuguese.
Companies and the role of climate change
Despite the introduction of climate change mitigation measures by governments, companies, civil society and other actors, total greenhouse gas emissions caused by human activity are continuing to increase. Under the current trajectory, global mean temperatures are projected to increase by 3.7 to 4.8ºC by the end of this century, far beyond the levels of warming that the international scientific community has identified as safe.
The world’s carbon budget is the total volume of greenhouse gasses that can be emitted while providing a degree of confidence that temperature rise will be limited to a manageable 2 ºC. Science-based targets recognize that budget, limiting a company’s greenhouse gas emissions to an allocation taking into consideration their fair share.
Most of the global greenhouse gas emissions are either directly or indirectly influenced by the corporate sector. Companies have a clear role to play in protecting our climate and ensuring that the transition to a low-carbon economy is smooth and prosperous.
How your company can benefit
Reducing greenhouse gas emissions protects our climate and our communities – but it’s also good for business. Companies that set science-based targets build long-term business value and safeguard their future profitability in four important ways:
Build credibility and reputation.
Companies taking a leadership position on climate bolster their credibility and reputation among stakeholders, including investors, customers, employees, policy makers and environmental groups.Approximately half of consumers worldwide believe climate change will have a negative effect on their own lives, and 65% of consumers agree that human activity is responsible for climate change. Meanwhile, companies increasingly want to do business with suppliers that are taking climate change seriously so that they can reduce GHG exposure in their value chain.
Save money and increase competitiveness.
Setting ambitious targets now ensures a lean, efficient, and durable company in a future where resources become increasingly more expensive – particularly resources derived from fossil fuels. Rising prices of raw materials can mean the difference between profit and loss.
The transition to a low-carbon economy will catalyze the development of new technologies and operational practices. The companies that set ambitious targets now will lead innovation and transformation tomorrow.
Influence and prepare for shifting public policy. Taking ambitious action now helps companies stay ahead of future policies and regulations to limit greenhouse gas emissions. Companies that are seen as leaders are better able to influence policy makers and help shape developing legislation.
Join the Call to Action
The Science Based Targets Initiative is calling on companies to demonstrate their leadership on climate action by publicly committing to science-based greenhouse gas reduction targets. Our target is to get more than 300 high-impact companies to commit by 2018; all companies will be recognized at sciencebasedtargets.org. We invite you to view a recording of the Call to Action Webinar, June 2016for a presentation on the information below.
To join the movement and become one of the first companies to take this important step towards the low-carbon economy, complete the following three steps:
Step 1 Submit the commitment letter
Signing the commitment letter indicates that your company will work to set a science-based emission reduction target. If your company already has an emissions reduction target, the letter confirms your interest in joining the Call to Action and having your existing target independently verified against a set of science-based criteria.
Once your company has signed the commitment letter you will have up to 24 months to develop a science-based target. We encourage sustainability professionals to be in contact with the Science Based Targets initiative to informally test the target before securing final executive sign off.
Step 3 Submit your target for a Quality Check
Once a target has been developed, your company must complete the ‘Target Check Form’ and submit it via email to [email protected]. The Science Based Targets team will then verify the target against the eligibility criteria and inform you whether the target has been formally approved or whether it may need some further work
On confirmation that your target meets the Science Based Targets eligibility criteria your company and its target will be showcased on the Science Based Targets website and in other communications.
The Science Based Targets initiative defines a science-based target as follows:
Emissions reductions targets adopted by companies to reduce GHG emissions are considered “science-based” if they are in line with the level of decarbonization required to keep global temperature increase below 2°C compared to pre-industrial temperatures, as described in the Assessment Report of the Intergovernmental Panel on Climate Change (IPCC).
Call to Action Eligibility Criteria:
• Boundary: The target must cover company-wide Scope 1 and Scope 2 emissions and all relevant GHGs as required in the GHG Protocol Corporate Standard.
• Timeframe: The target must cover a minimum of 5 years and a maximum of 15 years from the date of announcement of the target.
• Level of ambition: At a minimum, the target will be consistent with the level of decarbonization required to keep global temperature increase to 2°C compared to pre-industrial temperatures, though we encourage companies to pursue greater efforts towards a 1.5° trajectory.
• Scope 3: An ambitious and measureable Scope 3 target with a clear time-frame is required when Scope 3 emissions cover a significant portion (greater than 40% of total scope 1, 2 and 3 emissions) of a company’s overall emissions. The target boundary must include the majority of value chain emissions as defined by the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard (e.g. top 3 categories, or 2/3 of total scope 3 emissions).
• Reporting: The company will disclose company-wide GHG emissions inventory on an annual basis.
Additional recommendations include:
• Companies are encouraged to also develop long-term goals (e.g. 2050).
• Companies are encouraged to express their targets on an absolute AND intensity basis.
• To ensure consistent tracking of performance over time, the target should be recalculated, as needed, to reflect significant changes that would compromise its relevance and consistency. A target recalculation should be triggered by significant changes in the types of gases in its greenhouse gas inventory, growth projections, other assumptions used with science-based target-setting methodologies and significant changes to your business or data and emissions factors used in your inventory process. The latter will also require recalculation of the base year inventory. Companies should check the validity of their target projections annually.
• Companies should complete a Scope 3 screening before setting their GHG emission reduction targets.
We invite private sector financial institutions to commit to setting science-based targets for scope 1 and 2 emissions as well as for their scope 3 emissions from investing and lending activities under the Call to Action. However, the method for assessing financial institutions’ scope 3 emissions against a 2°C trajectory is still being developed. Since setting a scope 3 target for the financial sector is essential, this means financial institutions can be featured as a committed company but cannot yet have any of their targets reviewed and recognized by the Call to Action. We will invite all committed financial institutions to participate in a process to develop target setting methods for the sector and notify financial institutions as soon as we are able review and recognize targets (scopes 1, 2 and 3) through the initiative.
A financial institution is a company that acts as a channel between savers and borrowers of funds (suppliers and consumers of capital). The SBT initiative defines a financial institution for the purposes of target-setting as one that engages in investment activities as part of its core functions. These include but are not limited to the following:
In addition, if at least 5% of a company’s revenue comes from activities such as those described above, they would also be considered a financial institution.
If a company falls under the definition above but does not consider their investment activities significant/relevant for the purposes of science-based target setting, the company should provide an explanation in its target quality check form.
 This definition applies either for the Fourth or Fifth Assessment Report of IPCC, as well as the modeling of the International Energy Agency.