Existing approaches and methods

There are three science-based target (SBT) setting approaches:

      1. Sector-based approach: The global carbon budget is divided by sector and a company’s required emissions reduction is sector-specific.
      2. Absolute-based approach: A percentage of absolute emissions reductions is assigned to individual companies.
      3. Economic-based approach: The carbon budget is equated to global GDP and a company’s share of emissions is determined by its gross profit, since the sum of all companies’ gross profits worldwide equate to global GDP.

 

Within these three approaches there are six existing SBT setting methods. These methods aim to ensure that emission reductions are defined according to what science says is necessary for preventing dangerous climate change.

The Science Based Targets initiative recommends two specific methods (the Sector Decarbonization Approach and the Absolute Emission Contraction) when it comes to setting a target, described in more detail below.

For more information on the other existing methods please consult the linked resources below as well as the the Science Based Target Setting Manual.

1) Sectoral Decarbonization Approach (SDA) within the Sector-based approach:
This method is based on the 2°C scenario (2DS) developed by the International Energy Agency (IEA) as part of its publication, Energy Technology Perspectives (ETP) 2014 (IEA, 2014). It was developed by CDP, WRI and WWF with the technical support of Ecofys as a consultancy partner. The methodology was created with input from a group of technical advisors, two public stakeholder workshops and one online workshop, and aims to provide businesses with a sector-specific and research-backed method to set their emissions goals. The accompanying SDA tool allows companies to enter their data and determine their science-based targets according to the method and is regularly updated with recent ETP data. The latest version (V8.1) uses the ETP 2016 2 degree scenario (2DS) data. To obtain the most recent copy of the tool please see here.
2) Absolute Emissions Contraction within the Absolute-based approach:
This method requires all companies to reduce their own emissions by the same percentage of absolute emission reductions as required for a given budget (e.g. globally or for a sector). Different emissions scenarios can be used to determine what is required globally and thus, at a company level. When referring to this method, the SBTi usually considers the IPCC Fifth Assessment Report RCP2.6 subcategory that keeps overshoot to under 0.4W/m2, and which requires a 49% to 72% absolute emissions reduction by 2050 from 2010 levels to stay under 2C. Mars was one of the first companies to use this method to determine its science-based target. To find out more on its approach read here.
3) Others
Please consult the note below on recommended methods before using any of these methods.

A) Within the Absolute-based approach:

Corporate Finance Approach to Climate Stabilizing Targets (C-FACT). Resources: White Paper; Accompanying tool.

B. Within the Economic-based approach:

Greenhouse Gas Emissions per Unit of Value Added (GEVA). Resources: GEVA paper

Carbon Stabilization Intensity Target (CSI). Resources: BT’s CSI paper

Center for Sustainable Organization’s Context-based Carbon Metrics (CSO). Resources: CSO context-based carbon metrics; CSO FAQs

Recommended methods

The Science Based Targets initiative recommends companies use either the Sectoral Decarbonization Approach or the Absolute Emissions Contraction Method to set their Scope 1 and 2 targets as these methods ensure that global emissions are reduced in absolute terms in the long term. They are the most robust methods to ensure the 2°C carbon budget is conserved. In addition, the other methods (C-FACT, GEVA, CSI and CSO) might not be updated with recent data.

Why use these methods

Companies who wish to use economic-based methods to set intensity targets may do so but note that intensity targets would be considered science-based only if they lead to absolute reductions in line with climate science or are modelled using an approved sector pathway or method approved by the Science Based Targets initiative (e.g. the Sectoral Decarbonization Approach). Reductions must be at a minimum consistent with the low end of the range of emissions scenarios consistent with the 2°C goal,2 or aligned with the relevant sector reduction pathway within the Sectoral Decarbonization Approach.”

Learn more about how Scope 1 and 2 targets’ ambition is assessed during the validation process.

For more detailed information on SBT setting, approaches and methods, please consult the Manual.