What are science-based targets?

What are science-based targets?

Science-based targets provide companies with a pathway to reduce their greenhouse gas emissions in line with climate science, ensuring climate change mitigation and providing business benefits.

Science-based targets

Science-based targets provide companies with a clearly-defined path to reduce their greenhouse gas emissions in line with the 2015 Paris Agreement goals. 

These goals are to limit global warming to well below 2°C and to pursue efforts to limit warming to 1.5°C relative to pre-industrial levels.

Targets are defined as “science-based” by the Science-Based Target Initiative (SBTi), a partnership of leading organisations providing target-setting resources, guidance, assessment and approval. 

The benefits

By setting science-based targets, companies can reap the following benefits:

1. Brand reputation: By adhering to the highest standards of decarbonisation, companies signal to their stakeholders proactive environmental management.
2. Investor confidence: Strong environmental leadership is a form of risk management and future-proofing a business which is rewarded by investors.
3. Regulatory resilience: Companies can stay ahead of the regulatory curve as governments are implementing national emission reduction targets.
4. Innovation: Service and product redesign can be fostered as transitioning to a low-carbon economy requires new ways of operating as a company. 
5. Cost savings: Climate resilience influences a company to improve efficiencies and focus on resource conservation.
6. Competitive advantages: Setting science-based targets can lead to business retention and acquisition while improving a company’s bottom line. 

Target approaches

The objective of the SBTi is to encourage sector-wide decarbonisation and a transition to a low-carbon economy. Companies can set targets following the following approaches:

1. Absolute contraction approach: This method requires companies to reduce absolute GHG emissions by a given percentage.
2. Sectorial decarbonisation approach: Appropriate for some industrial sectors, the SDA divides a global carbon budget based on the projected level of sectoral economic activity and potential for emissions reductions. 

While most companies will follow the “absolute contraction approach”, some sectors, such as cement, financial institutions and power will follow a “sectorial decarbonisation approach”. Their resulting target is an intensity target defined relative to a specific business metric.

Companies operating in sectors requiring the “sectorial decarbonisation approach” will leverage methodologies, guidance and requirements for target-setting tailored to their industry.