Find answers to your SBT questions
Why do Science-Based Targets matter?
In short, they are necessary for limiting GHG emissions which contribute to global warming. According to the Intergovernmental Panel on Climate Change (IPCC), if GHG emissions are left unabated, we are on a pathway to increase global warming 3.7°C to 4.8°C.
Without keeping global temperature increases to well-below 2°C, the effects will be catastrophic with a host of impacts including: exposure to extreme heat, melting of arctic ice and permafrost, increase in sea-levels, loss of plant, insect and animal species, changes to a variety of ecosystems and reduction in food supplies. These will occur in addition to some of the impacts already in play: extreme weather events, flooding and forest fires. While well-below 2°C is the minimum, minimising global temperature rise to 1.5°C is necessary. A 0.5°C makes a tremendous difference to the degree of catastrophic impacts.
What are the key challenges when adopting science-based targets?
The main challenges typically occur during quantification of baseline emissions for setting targets, followed by identifying and implementing appropriate actions to meet the targets. By design, science-based targets are highly-ambitious and require aggressive GHG emission reductions within a relatively short timeframe (5 to 15 years). Conversely the targets and reduction measures extend well-beyond time horizons of a typical business planning cycle.
The required reductions are not only within the physical operational boundaries of a business, but also within their value chains. At best, value chain GHG emissions are difficult to quantify or quantify accurately, and often rely on estimations to provide a complete footprint. So for some businesses, gathering and analyzing available data (particularly within their value chains) can be time and resource intensive.
Ambitious targets within aggressive timeframes require a thorough plan that includes a suite of emission reduction measures modelled alongside emissions growth projected over 2-3 decades to provide some level of confidence in final decision-making and internal adoption. Often the most formidable challenge is the “unknown” and attempting to determine its implications to a business. Sometimes the unknown could be devastating (e.g., global pandemic) or an opportunity to innovate (e.g., technological advancement). Despite the challenges, many businesses have not only successfully set science-based targets but are already seeing the business benefits of them.
What are the business benefits of adopting science-based targets?
Science-based targets have enumerable business benefits. The Science-Based Targets Initiative (SBTi) conducted a survey of business executives who have identified the following business benefits: it future-proofs growth, saves money, provides resilience against regulation, boosts investor confidence, spurs innovation and competitiveness – while also demonstrating concrete sustainability commitments to increasingly-conscious consumers. SBTs are more effective than incremental emissions reduction targets at:
- Building business resilience and increasing competitiveness.
- Driving innovation and transforming business practices.
- Building credibility and reputation.
- Influencing and preparing for shifts in public policy.
What happens if science-based targets are not met?
Setting a science-based target is largely a voluntary exercise. If a company misses the mark with their set targets, the most immediate risk may be reputational. There are no fines nor other regulatory consequences of not meeting a target. Over the long term, in addition to the missed business benefits (listed above), companies may eventually lose market share, stakeholder and shareholder confidence and ultimately forego their ability to be competitive or grow. Businesses need to report their progress annually to ensure that they have sufficient insight on whether or not they are on the right trajectory to meeting their targets. Undoubtedly there are several influencing factors that could derail a company’s progress against its targets, but with consistent monitoring, measuring, making necessary course-corrections and annual reporting, companies embed the necessary rigour to successfully achieve their targets.
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