Back chevron
All posts
Companies

Science-Based Targets and the Path to Net Zero

By 
Keslio Team
5
 minute read  
|  
March 19, 2024
A village in a foggy mountain range with wind turbines.

How do we move towards a net-zero economy? Each year we draw closer to global targets and the need to take initiative towards our carbon footprint is becoming more and more critical to global sustainable development. The private sector plays a heavy role in this path to a sustainable future. One way of getting closer is through mitigating carbon emissions. The Paris Agreement aims to keep global temperatures under 2°C, limiting it to 1.5°C. Yet to do this requires great commitments backed up by climate science.

Understanding initiatives towards net-zero can be challenging. The term “net-zero” has sparked confusion amongst organizations with the lack of a clear definition and proper approach in solving climate change. Effective solutions must be made and to come up with a good decarbonization strategy, setting clear, concrete, and time-bound targets is key.

Science-Based Targets Initiative

Science-based targets (SBT) provide private companies and financial institutions with the knowledge on how much greenhouse gas emissions they should reduce and how fast this goal should be achieved to deescalate the negative impacts of climate change. To facilitate its development, progress, and standardization, the Science-Based Targets Initiative (SBTi) was developed by the CDP, the World Resources Institute (WRI), the United Nations Global Compact (UNGC), and the World Wide Fund for Nature (WWF). This partnership aims to support the private sector in setting emission reduction targets in line climate science by defining what net-zero is and promoting the best practices in achieving this.

Through assisting companies and providing them with resources they can use in crafting their emissions reduction plans, the SBTi leads a global movement in response to the climate goals set in the Paris Agreement. These tailored science-based solutions transform the private sector into leaders responsive towards urgent climate action. Not only do these direct businesses towards a net-zero economy, but it encourages innovative solutions that also ensures the business continues to thrive and remain competitive in this evolving landscape.

By adopting a science-based approach, businesses are able to make a positive impact towards the environment through innovation. This then leads to an increase in trust and confidence from investors and consumers. Utilizing climate science in coming up with a roadmap towards net-zero also helps businesses better understand environmental and sustainability regulations.

In addition to empowering the private sector in taking the lead towards climate action, the SBTI developed the Corporate Net-Zero Standard. The framework contains guidance, criteria, and recommendations for companies to refer to when setting their science-based targets.

According to the Corporate Net-Zero Standard, businesses are to set near-term targets that halve emissions before 2030 and long-term targets that cut more than 90% of their emissions by 2050. For remaining emissions, companies are to establish carbon removal and storage initiatives that neutralize the residuals. Lastly, businesses are to invest in Beyond the Value Chain Mitigation measures which reduce emissions. With the Corporate Net-Zero Standard, businesses can create solutions that follow global targets and drive change across and beyond the value chain.

Requirements

What is needed from a company to set their science-based targets? Setting a science-based target can be simplified into a five-step process.

Step 1: Commit

Companies interested in science-based targets should first register online and commit to the initiative by submitting a letter with the intention to set a science-based target or have existing targets independently verified. After submitting the commitment letter, the company will be recognized on the website as a committed company and will now have two years to develop their targets.

Step 2: Develop

Companies are given two years to develop their science-based targets. This should be aligned with the current criteria set by the SBTi. To further aid companies in planning, the SBTi has developed guides, criteria, tools, and recommendations. Sector-specific guidelines have also been provided for businesses to tackle different areas across their business. When developing a science-based target, companies should review and refer to the Corporate Net-Zero Standard and SBTi Criteria and Recommendations to ensure smooth validation.

Step 3: Submit

Science-based targets are to be submitted for validation. These targets consist of near-term, long-term, and other updates and edits to past approved targets. For financial institutions and companies under the forest, land, and agriculture (FLAG) sector, sector-specific science-based targets and forms are also to be submitted.

During this stage, the company will be working with a technical expert that will validate their targets and provide them with feedback alongside a decision on whether these targets are approved or not.

Step 4: Communicate

Now that the targets have been approved by the SBTi, the target must be announced to the public within six months. If the targets are not made public, these will have to go through revalidation to ensure it is still aligned with the current criteria. The SBTi will also publicly disclose the targets in their respective dashboard in their website.

Step 5: Disclose

Monitoring and reporting progress is essential in implementing sustainability. Companies who have science-based targets are to disclose their current progress annually through sustainability reports, annual reports, or through the CDP.

Small to medium enterprises (SMEs) also get to set their science-based targets through a streamlined process that skips the first two steps and directs them straight to submitting their targets. For an SME to be eligible for the streamlined route, they must meet the following criteria:

  1. Have less than 10,000 tCO2e across scope 1 and location-based scope 2
  2. Do not fall under the Financial Institutions (FIs) and Oil & Gas (O&G) Sectors
  3. Are not required to set targets using sector-specific criteria developed by the SBTi
  4. Are not a subsidiary of a parent company whose combined businesses fall into the standard validation route
  5. At least three of these are true to the company:
    • Has less than 250 employees
    • Has a turnover of less than €50 million
    • Total assets are less than €25 million
    • Are not in a mandatory FLAG sector

Outlook

How do we move towards a net-zero economy? The SBTi is crucial to this transition. Currently, more than 7000 companies have taken action, over 4000 have set science-based targets, and almost 3000 have net-zero commitments.

Ambitious global net-zero targets require ambitious action that steers the world further away from the impacts of climate change. Through setting targets and initiating action backed by climate science, the private sector can take the lead in global sustainable development. The path to net-zero can be paved by governing bodies and large enterprises, leading the way for the rest to follow and join them in sustainability.

At Keslio, we are deeply passionate about sustainability, equipping us with the expertise and extensive network needed to guide clients through their sustainability journey effectively and efficiently. Our expertise is particularly valuable for companies looking to embed sustainability practices into their businesses and investors looking to integrate ESG and impact into investment portfolios. To learn more about how Keslio can assist your organization on its sustainability journey, please don't hesitate to get in touch with us.

Schedule a call
blue redirect arrow

Similar articles

Our unique approach can help you activate sustainability in a rapidly evolving landscape.

For Companies

RETAINER

Ongoing End-to-End Support

We work closely with you across all aspects of your sustainability journey.
Learn more
white redirect arrow
ONE-TIME PROJECT

Strategy Development

We take care of your sustainability strategy development.
Learn more
white redirect arrow
ONE-TIME PROJECT

Sustainability Training

We deliver comprehensive sustainability trainings across topics.
Learn more
white redirect arrow
ONE-TIME PROJECT

Reporting and Disclosures

We craft your sustainability reports and disclosures.
Learn more
white redirect arrow
ONE-TIME PROJECT

Sustainability Communications

We develop effective sustainability communications.
Learn more
white redirect arrow
ONE-TIME PROJECT

Ratings and Certifications

We help you secure your desired rating or certification.
Learn more
white redirect arrow

For Investors

RETAINER

Portfolio Management

We help you effectively manage sustainability for your portfolio.
Learn more
white redirect arrow
ONE-TIME PROJECT

Strategy Development

We help you integrate sustainability into your investment process.
Learn more
white redirect arrow

Reach out to us.

By using this website, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. View our Privacy Policy for more information.
Agree