Methods: Science Based Targets

Transcription

1 Methods: Science Based Targets Second Annual Summit on Science Enablement for the SDGs: The #sciencebasedtargets #SDGs

2 Session Agenda I. Setting the Scene: Why Science Based Targets? Heidi Huusko, UN Global Compact II. III. IV. Methods and Criteria: How to set a Science Based Target? Cynthia Cummis, WRI Companies Taking Action Lori Michelin, Colgate-Palmolive Company Sally R.K. Fisk, Pfizer Inc. Q&A: Leadership for Science Based Targets

3 Science Based Targets I Setting the Scene: Why SBTs? Heidi Huusko Senior Manager, Environment & Climate UN Global Compact

4 Science Based Targets I Setting the Scene: Why SBTs?

5 Science Based Targets I Setting the Scene: Why SBTs? Science-based targets provide companies with a clearly defined pathway to future-proof growth by specifying how much and how quickly they need to reduce their greenhouse gas emissions Targets adopted by companies to reduce greenhouse gas (GHG) emissions are considered science-based if they are in line with the level of decarbonization required to keep global temperature increase below 2 degrees Celsius compared to pre-industrial temperatures, as described in the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC AR5)

6 Science Based Targets I Setting the Scene: Why SBTs? Context-based targets aim to assist businesses to align their water use with public policy objectives and a scientific understanding or local river conditions. Through multi-stakeholder collaboration, this project will recommend an approach to set corporate water metrics and the water targets they support. Uses best available science, informed by contextual social needs, and align with local and global public policy objectives such as the SDGs.

7 Science Based Targets I Setting the Scene: Why SBTs? Science Opportunities Market transformations Climate impacts We are transitioning towards a new climate regime Stakeholder expectations Energy costs Technology Policy 7

8 Science Based Targets I Setting the Scene: Why SBTs? our vision: Science-based GHG emission reduction target setting will become standard practice and corporations will be contributing to closing the emissions gap left by country commitments.

9 Science-based targets I Setting the Scene: Why SBTs? Since officially launching in June, 2015: ~2 Companies have formally joined the SBTi Call to Action Companies have approved targets Companies joining the Call to Action every week 9

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11 Science-based targets I Setting the Scene: Why SBTs? Top countries represented by companies committed to science-based targets 11

12 Science-based targets I Setting the Scene: Why SBTs?. SBTi Companies by Sector Committed Set targets

13 Science-based targets I Why companies engage? Increase efficiency to be more competitive Unlock new financial returns Attract investors Proactive policy engagement as a leader Pre-empt policy changes and regulatory risk Future proof growth Join the global call to action 13

14 Science-based targets I How can companies participate? 14

15 Science Based Targets I Methods and Criteria: How to set a Science Based Target? Cynthia Cummis Director, Private Sector Climate Mitigation WRI

16 Science Based Targets I Methods and Criteria: How to set a Science Based Target? Greenhouse gas emissions reduction targets aligned with the latest climate science for keeping warming below 2 C A clear pathway for companies to future-proof growth by specifying necessary greenhouse gas emissions reductions A challenge to companies to transform their business and help create and prepare for a low-carbon economy 16

17 Science Based Targets I Methods and Criteria: How to set a Science Based Target? What are science based targets? GT CO2e Understanding emission reduction targets based on climate science for keeping warming below 1.5ºC and 2ºC 40 to 70% below 2010 levels <1.5ºC <2ºC 360 GT CO GT CO to 95% below 2010 levels Year

18 Science-based targets I Best-practice criteria The SBTi has established a set of criteria that all targets must meet to be validated as Science-based Boundary All company-wide Scope 1 and Scope 2 GHG emissions must be covered Timeframe 5-15 years into the future Scope 2 Disclose whether a location or market based approach is followed Reporting Disclose GHG emissions inventory on an annual basis Ambition Consistent with decarbonization required to stay below 2 C - while we encourage efforts towards 1.5 C

19 Science-based targets I Scope 3 Criteria Boundary: Companies must complete a scope 3 screening for all relevant scope 3 categories in order to determine their significance as per the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard. If a company s scope 3 emissions are at least 40% of total scope 1, 2, and 3 emissions, a scope 3 target is required. The scope 3 target boundary must include the majority of value chain emissions; these are the top 3 categories or 2/3 of total scope 3 emissions. Ambition: Scope 3 targets should clearly demonstrate how the company is addressing the main sources of GHG emissions within their value chain in line with current best-practice.

20 Scope 3 I Target preference hierarchy Most preferred 1. Percentage-based absolute emissions target (in line with 2 o C pathway when possible) or intensity target based on the SDA 2. Other, percentage-based emissions intensity target resulting in ambitious reductions in absolute emissions 3. Performance-based target expressed in absolute or intensity terms, such as around increasing the energy efficiency of product portfolio 4. Targets to influence behavior of suppliers or customers Least preferred

21 Components of SBT methods I Approaches SBT methods have three main components Carbon budget Emissions scenario Allocation approach

22 Emissions Intensity Components of SBT methods I Allocation approaches 1. Convergence of emissions intensity Company A Company B Sector Company C Used with sector-specific scenarios and physical indicators Appropriate for homogenous sectors Year

23 Absolute Emissions Components of SBT methods I Allocation approaches 2. Contraction of absolute emissions Company A Company B Company C Company D All companies w/in same level of disaggregation reduce at uniform rate Emissions reduction expressed in absolute terms (tonnes CO2e) Year

24 Emissions Intensity Components of SBT methods I Allocation approaches 3. Contraction of emissions intensity Company A Company B Company C Company D All companies w/in same level of disaggregation reduce at uniform rate Emissions intensity can be a physical or value based metric Year

25 Science Based Targets I Target modelling SBT approach A) Sector-based approach Based on sector-specific carbon budgets determined by mitigation/technology options and activity projections. B) Absolutebased approach Based on absolute emissions reductions determined in climate reports (e.g % reduction in IPCC 5th AR). C) Economicbased approach Based on the average emissions reductions determined in climate reports per projected economic output. 25

26 Science Based Targets I Getting started on target setting: Methods SBT approach A) Sector-based approach Sectoral Decarbonization Approach (SDA) 3% Solution B) Absolutebased approach Linear approach / absolute contraction C) Economicbased approach Greenhouse Gas Emissions per Value Added (GEVA) Corporate Finance Approach to Climate-Stabilizing Targets (C-FACT) Carbon Stabilization Intensity (CSI) Context-based carbon metric (CSO)

27 Science-based targets I Getting started on target setting: SDA Freely available open-source methodology Allows companies to set emission reduction targets in line with a 2 C decarbonization scenario Based on the 2 C scenario (2DS) developed by the International Energy Agency (IEA) as part of its Energy Technology Perspectives publication

28 Science Based Targets I Companies Taking Action Lori Michelin Vice-President Sustainability & EHS Colgate-Palmolive Company

29 Science Based Targets I Companies Taking Action Sally R. K. Fisk Assistant General Counsel Environmental Law Group Pfizer Inc.

30 Science Based Targets I Q&A Moderator: Heidi Huusko, UN Global Compact Panelists: Cynthia Cummis, WRI Lori Michelin, Colgate-Palmolive Company Sally R.K. Fisk, Pfizer Inc.

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