Response to Nature Communications paper

The Science Based Targets initiative (SBTi) welcomes rigorous academic research on methods to enable the formulation of climate targets and corporate emissions reductions at the pace and scale needed to align with the Paris Agreement.

Nature Communications’ Measuring corporate Paris Compliance using a strict science-based approach paper by Rekker et al. provides valuable analysis of methods for setting corporate science-based targets and suggests conditions for ensuring these methods are Paris-compliant.

Following an initial assessment, we believe the approach described in the Nature Communications’ paper is aligned to the principles that inform the methods and criteria used in the SBTi. However, the SBTi is confronted with the challenge of scaling the adoption of corporate climate mitigation targets that are based on science. On the one hand, this requires the consideration of the scientific underpinnings, as outlined in the paper. On the other hand, we must also ensure our methods and guidelines are viable from an implementation perspective. This is illustrated in more detail below.

The SBTi is committed to ensuring that our framework remains at the forefront in the fight against climate change, in line with the best available science. As part of this, we will further assess and consider the recommendations from the paper as part of a broader review of our framework. This review is planned in 2023 following the transition to our new technical governance model with the roll out of a new Technical Council at the end of 2022. The council will be a group of independent experts that will guide technical decision-making in the initiative based on scientific and real-world evidence.

Assessment of recommendations in Rekker et al. vs the SBTi framework

Base year

Rekker et al., propose that “the base year from which progress is measured should be set in 2015 or prior”. We agree with informing the base year in a meaningful way that captures decarbonization in line with the underlying emission pathways. However, in practice, pre-determining the same base year for companies (e.g. 2015) does not represent a viable option, and in some cases, does not represent the most ambitious base year. This is for many reasons, including:

• Data quality: Most companies, including some of the largest and most advanced, did not have reliable GHG inventories in 2015. Even today, reliable scope 3 data remains a challenge for many companies.

• Structural changes: The corporate sector is dynamic. Many companies have undergone substantial structural changes since 2015, including mergers and acquisitions, divestments and others. An early base year, and an early GHG inventory, is not necessarily representative of the company today.

• Retrospective vs prospective ambition: The use of an early base year can lead companies to lower forward-looking ambition, because they have already achieved a considerable reduction in the past. This is something that the SBTi tries to prevent in several ways, including through the assessment of ambition from a recent and representative base year.

Revision mechanism

Rekker et al. propose that companies adjust their targets on a regular basis to reflect deviations, either from the science-based trajectory, or from the assumptions that were used to model the target. The SBTi fully supports this notion. However, considering the target approval and implementation cycle that companies follow, we have identified that an annual review process would be too time and cost-intensive, making the adoption of science-based targets unreachable to a critical mass of companies. It would also take resources away from the achievement of the science-based target and progression of real-world emission reductions.

Also, a linear reduction trajectory represents a theoretical emissions trajectory. The implementation of targets and decarbonization strategies do not lead to linear changes in emissions on an annual basis. Put simply, in practice companies’ emissions do not decrease at the same rate every year - the rate fluctuates. Considering these factors, the SBTi has a five-year as opposed to an annual review model.