The Importance of Science-Based Targets
Science-Based Targets (SBTs) specify how much and how quickly companies need to reduce GHG emissions in order to avoid a 2°C global temperature increase, compared to pre-industrial levels. By allocating a fair share of the required global emissions limit to an individual company, SBTs provide a clear pathway for a company to achieve future business growth while remaining below the 2°C limit.
SBTs are the new litmus test when it comes to carbon credibility, and will be greatly beneficial in driving better approaches to climate risk management. Companies that are interested in aligning sustainability and carbon-reduction targets with climate science need to follow a structured, well-mapped approach toward data and analysis and begin asking the right questions so that they can not only construct a convincing business case for SBTs, but build a viable route for how to deliver on such ambition. SBT setting is also a part of the yearly reporting practice of companies and has also become part of the data infrastructure for investors through CDP reporting.
Because SBTs are aligned with the objectives of the Paris Climate Agreement, they act as a mechanism for companies to deliver consistent and meaningful emission reductions year-on-year. Determining if SBTs are right for a business and what type of target to aim for requires a significant amount of work in terms of carbon footprint, data analysis and modeling, creating a plan for delivery, and stakeholder engagement.
As SBTs are designed to limit global warming to 2°C, they enable companies to future-proof operations by preventing the worst impacts of climate change such as extreme weather, economic volatility and supply chain disruption – unlike conventional carbon targets which may fall short of the level of reductions required for climate mitigation. In time, SBTs should allow a company to accurately assess its decarbonization progress based on economic productivity, carbon intensity or a combination of both.
Data’s Role in Setting and Achieving SBTs
Robust data gathering and monitoring of sustainability metrics are critical for setting SBTs, reporting progress on targets, and for identifying inefficiencies and areas for action. Data should be easily located and accessed on a centralized platform – first to give a holistic view of energy usage across a company’s entire operations, and second to enable detailed assessments or comparisons of metrics by site, facility, building or product type.
Choose data management tools that offers an integrated platform, such as reporting dashboards that connect across energy procurement, energy use and carbon emissions, as well as other resource streams like water usage and waste. Use a data management tool that connects across resource streams to gather accurate, critical information that gives a view into how progress is trending toward goals.
Data and SBTs Enable Active Energy Management
Over time employing such strategies should enable companies to adopt a more transformative approach to energy management. With a framework such as Active Energy Management for an example, energy is seen as an asset, not a cost. By sharing data across their portfolio, companies already on the SBT journey are integrating energy procurement, energy management and sustainability goals for higher returns.
Active Energy Management also relies on the utilization of smart data to provide real-time information on energy use and emissions, which will help companies monitor and report progress on SBTs in a more transparent way. Companies can use it as a lever to help tackle Scope 3 emissions as well – engaging suppliers to create more synergy between energy procurement, demand and sustainability.
The popularity of SBTs has exceeded all expectations, with an average of two companies joining the SBT initiative each week. As their uptake increases, setting an SBT will become more of an expectation and traditional emission reduction targets may be viewed as relatively weak in comparison.
Having a successful strategy for SBTs requires a range of measures around emissions abatement. Companies should first look to optimize their energy efficiency programs when starting out on their SBT journey. And ensuring accurate data management is key in tracking trends toward targets and success in SBT efforts.
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