This piece originally appeared on Forbes.com
When the Science-Based Targets initiative to cut corporate greenhouse gas emissions was formed in 2014, it started with an ambitious goal: have 100 companies commit to using the best climate science to inform their carbon reduction targets and shrink their carbon footprints by the end of 2015. That goal was met and exceeded in September 2015, as 114 companies have made this commitment. Today more than 165 companies will use Science-Based Targets (SBTs,) putting the plan well on the way to a longer-term milestone: commitments to SBTs by 250 companies and 100 companies with approved targets by the end of 2018. With less than two years to go, that goal could also be met sooner than expected.
One reason for SBTs’ surprising success is its difference from earlier target-setting plans for business. In recent decades, companies that aimed to curb their climate-warming emissions had few reliable ways to assess how much they needed to cut to do their part to avert the worst impacts of climate change. Some aimed for easy-to-hit bulls-eyes based on what could be confidently accomplished. SBTs are gaining momentum because they rely on science and take the guesswork out of setting ambitious greenhouse gas emissions reduction targets. The initiative has also benefited from good timing and the competitive nature of the business world.
Riding the Climate Action Wave
Timing is certainly part of it. Born just as momentum was building for the Paris Agreement on climate change, the SBT initiative rode the wave as countries began to craft their own climate action commitments aimed at keeping global warming below 2 degrees C (3.6 degrees F) over pre-industrial levels to avoid the worst impacts of climate change.
This added impetus to more than a decade of increased public awareness about and demand for corporations to lead on environmental sustainability. It also dovetailed with greener energy options that will make it easier for businesses to curb emissions in their own operations, in the power they buy and throughout their value chains.
Hitting a science-based target requires substantial investment in clean, renewable energy, but under the original GHG Protocol Corporate Standard for emissions accounting, companies could only account for renewables that were on-site. The rules for utility-scale renewable procurement through utilities, Power Purchase Agreements or Renewable Energy Certificates were ambiguous, discouraging companies from making the long-term commitments that help new solar and wind farms get built. A 2015 update to the Standard gives companies more options to account for the benefits of buying renewable power.
The best argument for SBTs comes from corporate leaders, who find SBTs are integral to their business plans:
- Laurel Peacock, senior sustainability manager at NRG, put it plainly: “For us it is the right thing to do, but also makes perfect business sense … We wouldn’t be doing this if it didn’t make business and economic sense.”
- “Having a science-based target helps us build relationships with government and changes the nature of the conversation we have with them,” said Amy Braun, senior sustainability manager at Kellogg Company.
- At Dell, John Pflueger observed: “The government doesn’t just set rules and culture, but is also a potential customer. It can indicate its support for low-carbon innovation by purchasing these products, so in that sense, having a science-based target should stand us in good stead.”
SBTs enable sustainability officers to calculate an emissions reduction target in line with what the science says is necessary to keep global warming below the dangerous threshold of a 2 degree C rise in temperature, But committing to set an SBT is just the beginning. The next step is more challenging: actually proposing a target that measures up to quality criteria set by the initiative’s partners (CDP, UN Global Compact, World Resources Institute and WWF). There are already 17 targets that have made it through the approval process.
For example, Proctor & Gamble has committed to cut emissions from operations by 30 percent from 2010 levels by 2020 and AMD has committed to reduce emissions 20 percent by 2020 from a 2014 base year. So far, not all proposed targets have met the best-practice criteria defined by the project partners, but this isn’t a deal-breaker. In fact, it offers an opportunity for education about the level of ambition needed for companies to do their part to meet the global emissions reduction goal set forth at Paris.
Harnessing Corporate Competition
The intrinsically competitive nature of the corporate world means companies love to keep score. When it comes to corporate climate action, CDP does the scoring for them, including on whether their targets are ambitious enough. A high CDP score can show companies they are moving forward – and show where they stand compared with their corporate peers. Corporate sustainability officers often see their performance pegged to the company’s CDP score and other metrics related to cutting emissions. Harnessing that competitive spirit benefits companies economically and environmentally.
Setting and meeting an approved SBT is a powerful way for companies to contribute to global climate action while showing customers, investors and other stakeholders that they take this issue seriously. Companies that have already set science-based targets are demonstrating that they help drive innovation, reduce costs and boost profits, while gaining long-term competitive advantage and safeguarding their future profitability. Science-based targets are harnessing the urge to make business more sustainable, profitable and responsive to one of the defining challenges of our times.