Five years on from its launch, the Science Based Targets initiative (SBTi) has released a new progress report that demonstrates the significant reductions that have been achieved by companies who have set emission reduction targets in line with what climate science has deemed as necessary.
The SBTi analysed 338 companies and found that they have reduced their Scope 1 and 2 footprints by 25% between 2015 and 2019, a stark contrast to the 3.4% rise in global emissions since 2015. The avoided emissions from these companies achieving such steep reductions equates to the annual emissions of 78 coal fired power plants.
We have been strong advocates of science-based targets since their inception and we’re proud to say that we have supported 1 in 3 UK approved targets. The analysis itself includes several of our clients such as Tesco, Britvic and Pukka Herbs. We believe that science-based targets are one of the strongest ways a company can demonstrate its commitment to tackling climate change, and these findings are an incredible confirmation that setting targets in line with climate science does result in real emission reductions.
Companies are raising the level of ambition
At the end of 2018, the Intergovernmental Panel on Climate Change (IPCC) published its special report on the impacts of 1.5°C of global warming. The scientists who wrote the report were tasked with finding out the difference between 1.5°C and 2°C of global warming, and the results were harrowing. The report shows us the devastating impacts of 2°C of global warming, urging for businesses to aim for a maximum of 1.5°C and highlighting that reaching net-zero emissions globally by 2050 would keep us within this crucial limit. A comparison of these impacts can be seen in the infographic below.
Figure 2 A comparison of the impacts of 1.5˚C and 2˚C of global warming.
The clarity the report provided has encouraged companies to rethink their climate strategies, and the SBTi has found that corporates have been raising their level of climate ambition over time.
Science-based targets are classified by the SBTi into three levels of ambition. The lowest level of ambition is aligned with global warming of 2˚C, which is followed by well-below 2˚C and 1.5˚C being the highest level of ambition.
The graph below shows that not only are more companies committing setting science-based targets, but that they are more frequently opting to align with the most stringent level of ambition.
Figure 3 Temperature alignment of Scope 1 and 2 science-based targets (SBTi)
Even more encouraging is the finding that, not only are companies more often aligning with 1.5˚C, but that they are achieving emission reductions beyond what is required to keep global temperatures below 1.5˚C. Whilst global emissions have risen on average 0.85%, SBTi companies have typically reduced their footprints by 6.4%, which is above the 4.2% annual reduction required for 1.5˚C alignment.
Reaching a tipping point of corporate climate action
Looking to the future, the pace at which companies are committing to and setting science-based targets gives us even more confidence that Paris Agreement commitments will be realised. At the time the analysis was undertaken in October 2020, 1,040 companies located in 60 countries and operating in nearly 50 sectors had committed to the SBTi.
These companies have a combined market capitalisation of over $20.5 trillion USD, which equates to almost 20% of the global market. At the time of writing this blog in January 2021, the number of companies that had committed to take action was already 1,182.
The SBTi report cites the ‘diffusion of innovations’ theory, which says that when a critical mass of a system’s members (10-25%) embeds an innovation, this represents a tipping point for uptake of that innovation and after that threshold is reached, we expect rapid adoption. Excitingly, in Europe 1 in 3 high impact companies are setting SBTs, and in the UK that figure sits at 40%. targets.
Figure 4 Historical and future projection of Scope 1 and 2 target coverage
Companies with approved targets are responsible for approximately 4% of global emissions, but if current growth rates are maintained, the SBTi predict that by 2030 SBTi companies’ Scope 1 and 2 emissions could cover almost a quarter of global emissions from energy and industry as can be seen in the graph above.
There is still plenty of work to do…
Despite the encouraging progress that’s been made, the SBTi notes that there is still plenty of work to be done. Their analysis found that there was a lack of consistency in reporting progress against targets, and to remedy this, the SBTi will publish measurement, reporting and verification (MRV) guidance for companies in the initiative in the next 12 months.
The report highlights particular opportunities in non-OECD countries, as well as the construction, financial services and automobile manufacturing sectors. Take a look at the work we have done with construction company Willmott Dixon who are leading the construction industry with their highly ambitious science-based targets. We recently collaborated with banking and financial services organisation HSBC Bank to develop a Net Zero guide and webinar to support their goals to educate and inspire their customers to make a positive change.
What are the next steps my company can take to setting a science-based target?
When developing your science-based targets, there are three key steps that you need to follow:
- Calculate your full Scope 1, 2 and 3 footprint to ensure you understand the impacts of your own operations, suppliers and customers
- Set reduction targets in line with climate science
- Develop a strategy to achieve the targets that aligns with your company goals
We are helping our clients across multiple sectors such as National Trust, CMS Cameron McKenna and Pukka Herbs build credible net zero strategies. Through this work we help them reduce emissions in line with climate science and develop credible offsetting strategies. Carbon Intelligence is proud to have supported 1 in 3 UK approved science-based targets and have our own 1.5◦C approved SBT.