Reducing carbon footprints with science-based targets
With COP 26 around the corner, the world is still gripped by and reeling from the impact of COVID-19. At the same time, the need for widespread, meaningful action in the fight against climate change hasn’t abated over the last 18 months – it’s become more urgent. The pressure on industry to reduce its operational impact on the planet is at an all-time high.
For manufacturers, simply measuring their current carbon footprint can prove to be an extremely complex challenge, never mind reducing and reporting on changes. After working with Encirc and Vidrala to set and report on ambitious sustainability goals, Susie Chalk, Senior Consultant at Carbon Intelligence, outlines her views around how and why more manufacturers should use science-based targets to spur effective environment-driven action across their businesses
What is science telling us?
According to the IPCC’s Special Report on 1.5°C (SR15), to limit global warming to 1.5°C and avoid the worst impacts of climate change, global emissions must rapidly decline over the next 10 years, and reach net-zero by no later than 2050. Worryingly, as can be seen on the below graph, projections indicate that we are not on track, therefore industries around the world need to take urgent climate action now.
But where do companies start when launching their own fights against climate change? As with any aspiration, setting an ambitious but achievable goal can be the best first step. Science-based targets (SBTs) are no different, helping companies commit to reduce emissions in line with keeping the global temperature increase to 1.5 degrees, or well below 2 degrees.
Targets to reduce greenhouse gas emissions are considered “science-based” if they are aligned with the goals of the Paris Agreement. They are managed by the Science-Based Targets Initiative (SBTi) and require organisations to understand their full footprint across three different areas (Scopes 1, 2 & 3).
Scope 1 covers direct emissions from owned or controlled sources (company vehicles, fuel combustion), while Scope 2 covers a company’s indirect emissions from the generation of purchased electricity, heat and steam. Scope 3 includes all other indirect emissions that occur in a company’s value chain, (business travel, waste disposal etc.).
When Scope 3 emissions make up more than 40% of a business’ full footprint, then the target, or commitment to reductions, must cover at least two thirds of these emissions. The targets have to achieve absolute reductions in emissions, rather than intensity reductions. Absolute reduction refers to the total quantity of greenhouse gases being emitted, whereas intensity compares the volume of emissions to a unit of economic output.
The objective of Net Zero is to reduce company-wide and value-chain carbon emissions in line with limiting warming to 1.5 degrees, and to balance any remaining emissions by removing carbon dioxide from the atmosphere. The UK has a 2050 Net Zero target, and the Government has recently communicated its aim to reduce emissions by 78% by 2035.
In line with the increasing urgency of climate change, we’re seeing a growing trend of customers and investors expecting and demanding more action and accountability, relating to environmental and climate change risk management.
By decisively setting SBTs and demonstrating climate leadership, organisations can drive a positive impact on their brand and reputation, while making a meaningful difference. This also has an impact internally, with company employees and prospective staff increasingly expecting their organisations to show leadership and bold action around climate change and sustainability initiatives.
Setting an SBT will likely require investment and innovation in more low-emission technology, but starting now puts organisations in a good position to take full advantage of impending technical innovations and opportunities to save costs in the long-term. Likewise, preparing for the transition to a zero-carbon economy will minimise future disruption to business as society and policies develop to become more climate-focused.
Embracing SBTs early helps businesses to mitigate any risks in the supply chain, by engaging with its manufacturers, suppliers, distributors, and preparing for transition risks ahead of time. This means having realistic discussions on potential developments in the shift to a zero carbon economy.
Why set SBTs?
With the global average temperature in 2019 1.1 degrees Celsius above the pre-industrial period, and with the manufacturing industry being one of the largest contributors to greenhouse gas emissions worldwide, manufacturers have a responsibility to act, and to act now. This is not just to respond to customer and stakeholder demand, but to ensure their business can continue into the future.
Beyond business, there is an ethical obligation for manufacturers to act. Figures from the Environmental Protection Agency in 2017 showed that industry accounted for over 22% of greenhouse gas emissions in the US. However, this only took direct (Scope 1) emissions into account. With indirect emissions included, the figure is closer to 30%, meaning that industry was the greatest contributor of any sector, beyond even electricity and transportation.
How do you set science-based targets?
The initial, most valuable step in setting science-based targets is to commit to the process. A business must first calculate the greenhouse gas emissions from its own operations (Scope 1 & 2) and from its upstream and downstream value chain (Scope 3). Following this, stakeholders can review the SBT methodologies, identify which is most suitable for them, and calculate their carbon reduction targets.
At this stage, it’s important that all departments within the organisation are engaged and aligned, so they can build a roadmap to success. Once established, the targets are submitted for approval and validation to the SBTi. Organisations such as Carbon Intelligence can provide extensive guidance throughout this process, to ensure that companies take on an approach that is suitable to them.
The impact of science-based targets
The SBTi analysed 338 companies that had set targets guided by science, and the data confirmed that companies that do so, cut emissions fast. The report concluded that these companies reduced Scope 1 and 2 emissions by 25%, even as global emissions rose by 3.4% in the period (2015-2019), as demonstrated in the graph below.
As Alexander Farsan, global lead on science-based targets at WWF, explains, “Companies setting science-based targets are backing these commitments up with action”. It shows a company’s responsibility, and a willingness to take direct measures to reduce their environmental impact. In the case of Encirc, we have worked with their parent company, Vidrala, to develop a Sustainability Strategy to drive ambition and impact across the entire Group. The results of this partnership will be announced in 2021.
By setting science-based targets, engaging their boards, and getting buy-in across their organisation, manufacturers are in a strong position to harness innovation within the sector, feed into taskforces/discussion groups, and take advantage of cost-saving opportunities.
Find out more here. If you want to learn more about Carbon Intelligence’s services, expertise and approach to SBTs, visit https://carbon.ci/