Science-Based Target Setting

What is Science-Based Target Setting?

Science-Based Target setting (SBT) refers to the process whereby companies and organizations set greenhouse gas emission reduction targets in line with the latest climate science requirements needed to meet the goals of the Paris Agreement - limiting global warming to well below 2°C above pre-industrial levels and pursuing efforts to limit the warming to 1.5°C. This approach ensures that corporate sustainability strategies are aligned with scientifically backed goals, making them both more effective and credible in the fight against climate change.

Why is Science-Based Target Setting important?

In an era where environmental, social, and governance (ESG) considerations are becoming critical for investors, regulators, and consumers, adopting Science-Based Targets (SBTs) demonstrates a company's commitment to sustainable development and climate action. By aligning with the Science Based Targets initiative (SBTi), companies not only contribute to global efforts to mitigate climate change but also benefit from increased competitive advantage, improved investor confidence, and reduced regulatory risks.

The role of the Science Based Targets initiative (SBTi)

The Science Based Targets initiative is a collaboration between CDP, the United Nations Global Compact, World Resources Institute (WRI), and the World Wide Fund for Nature (WWF). The SBTi champions science-based target setting as a powerful way of boosting companies' competitive advantage in the transition to a low-carbon economy. It offers companies a clearly defined pathway to future-proof growth by specifying how much and how quickly they need to reduce their greenhouse gas emissions.

The process of setting Science-Based Targets

Setting science-based targets involves several key steps:

1. Commitment

Organizations commit to setting a science-based target, signaling their dedication to sustainability and climate action.

2. Develop Targets

Companies calculate their carbon footprint and develop targets in line with SBTi’s criteria and recommendations, which are designed to meet the objectives of the Paris Agreement.

3. Validation

The SBTi validates the proposed targets to ensure they are scientifically sound and meet stringent criteria.

4. Implementation

Organizations implement their targets through strategic initiatives aimed at reducing their carbon emissions.

5. Disclosure and Reporting

Companies regularly report on their progress, ensuring transparency and accountability in their sustainability efforts.

Benefits of Science-Based Target Setting

Adopting science-based targets offers numerous benefits, including:

Enhanced Brand Reputation

Demonstrating a commitment to sustainable practices can significantly improve a company's image and brand value.

Risk Management

Science-based targets help companies anticipate regulatory changes and reduce their exposure to carbon-related risks.

Innovation and Competitive Advantage

The process encourages innovation in product development, operations, and supply chain management, leading to improved efficiency and cost savings.

Investor Confidence

By aligning with globally recognized goals, companies attract investments from increasingly climate-conscious investors.

Conclusion

Science-Based Target setting represents a critical step for companies committed to sustainable development and climate action. By aligning their emission reduction targets with the latest climate science, companies not only contribute to the global fight against climate change but also secure a competitive edge in the rapidly evolving ESG landscape. The Science Based Targets initiative plays a pivotal role in guiding and supporting companies through this process, ensuring that their targets are both ambitious and achievable.