Science-Based Targets

Doing what the science tells us

To have a good chance of keeping global warming within 2°C, the Intergovernmental Panel on Climate Change (IPCC) says that by 2050, greenhouse gas emissions need to be 41-72% lower than they were in 2010. And by the end of this century, they need to be near zero. [1]  

The good news is that these figures give companies something concrete to base their emissions targets on. Setting targets based on science can be good for business: it can spark innovation, create new business models, and make them more efficient, sustainable and competitive in the long run. [2]

Setting these targets well before carbon legislation kicks in gives companies a head start on responding to changes in policy and regulations. And it shows investors and customers they’re serious about tackling climate change. [3]

There are various methods companies can use to work out what their science-based targets should look like.


The 3% solution

HOW IT WORKS:

CDP and WWF-US have worked out that the US corporate sector needs to cut its absolute emissions by an average of 3.2% a year from 2010 to 2020 to avoid dangerous climate change.

PROS AND CONS:

If businesses act now, they’ll collectively save the equivalent of US$190 billion in 2020 alone and set us well on the way to curbing climate change. But every moment they delay will make things more difficult and costly. If they wait until 2020 to start, they’ll need to cut emissions by 9.7% every year to be on the right track for 2050. [4]


Cutting absolute emissions

HOW IT WORKS:

Companies set targets in line with what the IPCC says needs to happen to keep global warming within 2°C—an emissions drop of between 41 and 72% by 2050 compared with 2010. Some are going further, aiming for zero net emissions by 2050.

PROS AND CONS:

This approach is simple, but it isn’t specific to sectors or regions and the 41-72% drop only gives a two in three chance of keeping global warming within two degrees. [5]


 “Value-Added” approaches

HOW THEY WORK:

Value-Added is a measure of a company’s contribution to Gross Domestic Product (GDP). In these approaches, carbon emissions are linked to the Value-Added measure, which means that as a company’s economic contribution to society grows, its emissions reductions need to keep up.

PROS AND CONS:

These approaches work for companies in both developed and developing countries; they are flexible and fairly simple to calculate but they do not necessarily account for sector differences. [6]


The Sectoral Decarbonization Approach (SDA)

HOW IT WORKS:

This method allocates a carbon budget to each sector linked to the global emissions reductions the IPCC says we need. It takes into account differences between sectors, like how much potential there is for mitigating climate change and how fast companies’ activity is growing compared to economic and population growth. Within each sector, companies can base their targets on their contribution to the total activity of the sector and their company’s intensity relative to the sector’s intensity overall.

PROS AND CONS:

It’s a new method, so we don’t know yet how it’ll pan out. But because it works according to sector, this method should give a more accurate picture of how much companies need to cut their emissions by to keep global warming within 2°C. And the sector-based approach makes more sense for businesses. [7]

RESOURCES
[1] http://www.ipcc.ch/pdf/assessment-report/ar5/wg3/ipcc_wg3_ar5_summary-for-policymakers.pdf
[2] https://www.cdp.net/en-US/Pages/RTP/adopt-science-based-targets.aspx
[3] https://www.cdp.net/en-US/Pages/RTP/adopt-science-based-targets.aspx
[4] https://www.cdp.net/CDPResults/3-percent-solution-report.pdf
[5] http://www.sciencebasedtargets.org/wp-content/uploads/2014/09/The_Sectoral_Decarbonization_Approach.pdf page20
[6] http://www.btplc.com/Betterfuture/NetGood/OurNetGoodgoal/OurCSIMethodology/CSI_Methodology.pdf
[7] http://www.sciencebasedtargets.org/wp-content/uploads/2014/09/The_Sectoral_Decarbonization_Approach.pdf

The Facts

  • Greenhouse gas emissions need to be 41-72% lower by 2050 than they were in 2010 to have at least a two in three chance of keeping global warming within two degrees.
  • Reducing emissions by 3.2% year-on-year from 2010-2020 would put companies in America on track to keep temperature rise below the two-degree threshold.
  • A collective $190 billion of savings would be made by American companies in 2020 alone if they embraced the 3.2% annual reduction target.
  • Five of the world’s largest companies who have set long-term, science based targets, will cut more than 275m tonnes of CO2 from 2010-2050, equivalent to 183 coal fired power stations.