Science Based Targets initiativeĀ (SBTi),
- āa body that champions science-based target setting and officially approves these targets. ā
- mission : to help companies set ambitious climate goals based on the science for reducing greenhouse gas emissions and limiting global warming to below 2Ā°C
- founded by the CDP, United Nations Global Compact, World Resources Institute (WRI), WWF and We Mean Business,
- 685 companies have committed to setting SBTs, and 290 have had them approved
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General logic & philosophy from aspiring net-zero companies (source : a top executive @Schneider)
- Since SBTI published and created the net zero Foundation, the guidance is:
- First, emission reduction/ avoidance : reduce by 90% your scope 1-2-3 emissions
- Then removal
- In the short term, finance via carbon compensation
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Process to submit SB targets for verification
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What methods are SBTargets based on?
There are various different methods available for setting Scope 1 and 2 science-based targets, but the SBTi recommends Sectoral Decarbonisation Approach (SDA) and Absolute Emissions Contraction as best practice.
Sectoral Decarbonisation Approach (SDA)
- Uses International Energy Agency (IEA) scenarios to model sector pathways to maintain warming within the 2Ā°C limit.
- Accounts for growth for those companies expecting to increase their market share of the sector in the future.Allows for intensity and absolute targets.
- Applicable to a wide variety of sectors, including services/commercial buildings, food and beverage manufacturing, and transport.
Absolute Emissions Contraction
- Requires a company to reduce its emissions on an absolute basis as required by a given carbon budget.
- The SBTi considers the IPCC Fifth Assessment Report RCP2.6 subcategory as a guideline for reductions to stay under 2Ā°C and requires a 49% to 72% absolute emissions reduction by 2050 from 2010 levels.
In addition, the SBTi requires that companies set ambitious targets to reduceĀ Scope 3 emissionsĀ if they represent greater than 40% of the companyās overall footprint.
How many companies set SBTi targets?
At the end of 2021,Ā 2,253 companiesĀ across 70 countries and 15 industries, representing more than one third ($38 trillion USD) of global market capitalization, had approved emissions reductions targets or commitments with the SBTi.
What are the limitations of science-based targets?
In addition to this, if a company were to follow the SDA methodology it must address the following three key issues.
- 50:50:Ā The SDA assesses the decarbonization required to stay below 2Ā°C with a 50% probability. This means that if all companies in the world took this approach, we would still only have a 50% chance of staying under 2Ā° C.
- Everyone must participate: SDA modeled science-based targets will only maintain global warming of 2Ā°C if ALL companies participate, therefore those willing to do a bit more should lead the way by picking up the slack.
- Itās a global picture:Ā Concept of taking a āfair shareā of the emissions reduction burden is not built into the models. For example, because of the UKās historic contribution to global emissions, coupled with its wealth and technological capability, a steeper decarbonization pathway may be required for British companies.
- Speculative technology:Ā the model assumes that negative emissions technologies that have not yet been proven viable at scale, e.g. carbon capture and storage, will be viable solutions in the future. This reduces the necessary decarbonization and raises the risk that emissions cuts will not be sufficient.
What are net zero targets?
While the SBTi has defined what a Science Based Target is and coordinates their validation, Net Zero has become more open to interpretation. This has resulted in several different variations of what Net Zero means, and some confusion over what is required.
Basically, a net zero target is an aim to become carbon neutral by a certain date. A net zero carbon target differs from a zero carbon target in that offsets can be used to reach āzeroā. This can be applied at a corporate level, or at a portfolio or building level. In these cases what is in scope for each version of Net Zero can differ.
UnlikeĀ net-zero, which is a far more demanding standard that has become the global benchmark for decarbonisation, carbon neutrality allows companies to continue emitting more CO2 than they remove from the atmosphere.
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