This is leadership: why companies are setting emissions goals based on science
Corporate climate action has come a long way in recent years. About 81 percent of the world’s 500 largest companies have set greenhouse gas reduction targets.
However, the growing impacts of climate change and the alarming scientific projections suggest that the bar needs to be set much higher. Mind the Science, a report published today, assessed 70 of the world’s largest publicly listed emitters and found that only 28 had set reduction targets aligned with the level of reductions science says is necessary to prevent the worst impacts of climate change.
It’s time for a new era of corporate climate action—one that’s informed by the most up to date science.
That new era begins today. A year ago, CDP, the UN Global Compact, WRI and WWF teamed up to launch what is now called the Science-Based Targets initiative. Today, we are proud to announce an ambitious goal: We aim to enlist 100 companies to commit to setting science-based greenhouse gas reduction targets in 2015 and 250 companies by 2020. We’ll support these companies through a series of guidance documents and tools, the first of which is released today.
Why are “science-based” targets important?
Targets are considered “science based” if they are in line with the level of emissions reductions necessary to keep global temperature increase below 2°C compared to pre-industrial temperatures, as described in the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC). Limiting emissions enough to stay within 2 degrees of warming—also known as the world’s “carbon budget”—can help prevent some of the most disastrous impacts of climate change.
Current GHG emissions trajectories and corporate reduction targets are not aligned with this politically agreed-upon goal. Setting targets informed by the current climate science will help companies understand the level of transformation required in their business and production models to meet the 2 degree goal. Science-based goals are a north star for corporations that are serious about safeguarding future profitability and the wellbeing of their customers. We have confidence that, in applying science-based target setting methods, companies will find new sources of innovation and opportunities to become more competitive in a carbon-constrained economy.
Science Based Targets initiative will provide guidance, resources and support to help this practice take hold in the business community. Released today, the Sectoral Decarbonization Approach is a sector-specific methodology for companies in energy-intensive sectors—such as the aluminum and cement—to set science-based targets that account for differences in mitigation potentials and cost among sectors. Using this methodology, a company can identify its fair share of the carbon budget given the economic and technological realities of its sector. Science Based Targets initiative will release other tools and guidance over the coming months.
Science-based targets are good business
Setting science-based targets is not just about combating climate change—it’s in companies own best interests.
Companies that set ambitious greenhouse gas reduction efforts today will gain a competitive advantage in the years to come, for a few reasons: Gains in efficiency lead to cost savings; credible targets bolster a company’s reputation; ambitious goals spur innovation and transformational change, which can unlock opportunities for growth; and science-based targets will help companies stay ahead of shifting public policies.
Shoei Yamana, President and CEO of Konica Minolta, Inc., explained it to us this way: “Preventing global warming is core to our future resilience as a manufacturing company. Having ambitious carbon-reduction targets allows us to drive forward innovation, develop new energy-saving technologies and share our know-how through the supply chain and beyond to increase efficiency on a global scale.”
The Road to Paris initiative, a platform for businesses to demonstrate climate action leadership ahead of the UN climate talks in Paris in December, has already secured commitments from over thirty companies to set science-based targets. We see this as a sign that leading companies are able and willing to do their part to forge the low-carbon economy.
Now is the best time for ambitious climate action. We cannot negotiate with the carbon budget—the sooner we begin transitioning to the low-carbon economy, the smoother that transition will be. Companies that take action now are safeguarding their future—for their own profitability, and for their customers.
Cynthia Cummis is the Deputy Director, Greenhouse Gas Protocol for WRI.