Companies around the world are stepping up to reduce greenhouse gas emissions in line with climate science, including in their value chains. By the end of 2019, the Science Based Targets initiative had validated scope 3 targets from over 280 companies with a combined market capitalization of over $9 trillion, which will work to reduce emissions throughout their value chains, spurring other businesses to follow.
Companies are responsible for a significant share of global greenhouse gas (GHG) emissions and must play an integral role in achieving the Paris Agreement goal of keeping global warming to well below 2 degrees C (3.6 degrees F). Through the Science Based Targets initiative (SBTi), more than 750 companies have committed to reduce their GHG emissions in line with climate science, primarily setting targets for their own operations (scope 1 emissions) and their electricity consumption (scope 2 emissions). But for many sectors, such as apparel, chemicals and retail, the largest portion of a company’s GHG footprint lies upstream and/or downstream in their value chain (scope 3 emissions).
WRI and the World Business Council for Sustainable Development published the GHG Protocol Corporate Value Chain (Scope 3) Standard in 2011 to enable consistent measurement and reporting of scope 3 emissions. WRI brought this expertise to SBTi, launched in 2015 with CDP, WWF and the UN Global Compact, which has greatly increased scope 3 target-setting by providing clear criteria, offering a target validation service and making scope 3 target-setting mandatory for companies whose value chain emissions are at least 40% of their total emissions. With CDP and WWF, WRI developed resources that enable scope 3 target-setting, including target-setting methods and guidance. In addition, WRI leads the scope 3 sector-specific projects for apparel and chemical companies and for financial institutions.
By the end of 2019, more than 280 companies globally with an aggregate market capitalization of over $9 trillion had publicly set ambitious scope 3 targets approved through the SBTi. These targets have spurred numerous innovative corporate strategies and value chain initiatives to reduce GHG emissions. Companies that proactively address their value chain emissions report numerous benefits: increased competitive advantage, regulatory resilience, brand reputation and bottom-line savings, but perhaps most importantly, product innovations that transform their business models.
With companies from nearly 50 countries committed to setting SBTs and membership accelerating, SBTi has become a global movement with the potential to make science-based climate targets standard business practice across all key sectors and economies.