Your Guide to Science-Based Targets. Discover how your organisation can demonstrate its commitment to a low-carbon future.

Transcription

1 Your Guide to Science-Based Targets Discover how your organisation can demonstrate its commitment to a low-carbon future.

2 Contents: 1. The case for science-based targets 2. Find your expert partner 3. Be prepared 4. Be strategic 5. How Tesco set an ambitious but achievable target 6. Carbon Credentials approach 7. Getting your target validated

3 Your Guide to Science-Based Targets / carboncredentials.com / 3 The case for science-based targets What is a science-based target for emissions reduction? Corporations have a clear responsibility in helping the world transition to a low-carbon economy. Sciencebased targets are the best approach for your company to address this challenge. Scientists understand the level of action needed worldwide to keep global warming within 2 C, but how does this apply to your business? Science-based targets reflect the level of action needed globally and translates this down to a corporate level. A science-based target is a roadmap that a company commits to with the aim to make cuts in its emissions of carbon and other greenhouse gases. A greenhouse gas emissions target can be considered science-based if the emissions reductions it requires are in line with keeping the global temperature increase below 2 C compared to pre-industrial temperatures.

4 Your Guide to Science-Based Targets / carboncredentials.com / 4 ~4 C Global temperature rise likely this century on current climate pathway <2 C Target limit on global temperature rise called for by scientific community (IPCC AR5 report) 1.5 C Targets are seen as best practice to minimise the risk of dangerous climate change impacts

5 Your Guide to Science-Based Targets / carboncredentials.com / 5 Why set a science-based target? Setting a science-based target is a recognised way to prove your organisation is doing its fair share because if you do not commit to setting a science-based target, then others will have to make up the shortfall. Build credibility and reputation with a public commitment Drive innovation and transform business practices Demonstrate leadership and influence policy Improve efficiency, save money and increase competitiveness Differentiate your brand and organisation from peers Evolve a more resilient business by preparing for future legislation

6 Your Guide to Science-Based Targets / carboncredentials.com / 6 Who s setting science-based targets? To date, over 400 leading companies are taking science-based climate action and over 100 companies have had science-based targets officially approved by the Science Based Targets initiative (SBTi). With the SBTi gearing up to charge for approvals in the future, now is the ideal time to set your own sciencebased targets and join other organisations at the forefront of sustainability. Organisations setting science-based targets include: Banks, Diverse Financials and Insurance BNP Paribas London Stock Exchange Food and Beverage Processing Nestlé PepsiCo Pukka Herbs Hospitality Hilton Melia Hotels International Construction and Engineering Keller Group ISG Telecommunication BT Telefónica Real Estate The Crown Estate SEGRO Consumer Durables L Oreal Procter & Gamble Retailing Tesco Marks & Spencer Professional Services Carbon Credentials

7 Your Guide to Science-Based Targets / carboncredentials.com / 7 Find your expert partner Setting and achieving your ambitious science-based target requires high levels of quantitative analysis, stakeholder engagement and strategic thinking. Carbon Credentials has worked with many large and complex multinational organisations to set sciencebased targets and has experience in a multitude of sectors, including real estate, construction, retail and manufacturing. We recently helped Tesco become the first corporate in the world to align its science-based targets with the ambitious goal to keep global warming below 1.5 C. Our expertise Greenhouse gas accounting including scope 3 modelling Stakeholder engagement Strategy

8 Your Guide to Science-Based Targets / carboncredentials.com / 8 Carbon Credentials applied their expertise, rigour and collaborative approach to recommend clear milestones which we have adopted as our new SBTiapproved targets. Christina Downend, Climate Change Manager, Tesco

9 Your Guide to Science-Based Targets / carboncredentials.com / 9 Be prepared Understanding SBTi criteria The SBTi has rigorous criteria that must be met in order for your target to be recognised as sciencebased, including the following categories: Emissions boundary: Which of your emissions must be included (see next page). Timeframe: Base and target years, and progress to date. Ambition: Level of ambition, absolute vs. intensity targets, method validity, combined scope targets. Scope 2: Approaches to indirect emissions, and renewable energy targets. Scope 3: Considering other indirect emissions along your value chain. Reporting: Frequency of publicly reporting against targets must be annual.

10 Your Guide to Science-Based Targets / carboncredentials.com / 10 Understand your emissions boundary Your science-based target must cover company-wide Scope 1 and 2 greenhouse gas emissions, as defined by the GHG Protocol Corporate Standard, and Scope 3 emissions in most cases. The GHG Protocol defines three scopes of emissions caused by your company s operations. Scope 1: Direct emissions by your organisation, e.g. from burning fuels such as natural gas for heating or petrol to fuel cars. Scope 2: Indirect emissions from purchased electricity, cooling, heat or steam. Scope 3: Other indirect emissions along your value chain from your suppliers or customers. Most organisations developing science-based targets find that addressing Scope 3 emissions is their biggest challenge. The SBTi requires that if Scope 3 emissions make up over 40% of total emissions, then at least two-thirds of your Scope 3 emissions must be included in the target. You must demonstrate that you have considered the relevance of each of the 15 Scope 3 emission categories and can provide a justification for any exclusions, on grounds of irrelevance to your business. This screening exercise will assess the relevance of each category based on five criteria: Size Influence Risk Stakeholders Sector Guidance Working with a specialist partner like Carbon Credentials can help you to get to grips with Scope 3 emissions.

11 Your Guide to Science-Based Targets / carboncredentials.com / 11 Be strategic It s vital to build a practical strategy for developing your science-based target, so when you present it to senior management they are comfortable with approving it. Your plan needs to be clear on the risk, the required investment and the business benefits. Be Visionary: Don t be intimidated by setting long-range targets to secure your organisation s place in the low-carbon economy of tomorrow. Be Aligned: Communicate how a science-based target is aligned to your organisation s values. Be Collaborative: Involve decision-makers and key stakeholders from the start. Be Realistic: Understand the investment that needs to be made within the business and through the supply chain and present a funding plan for achieving short-term targets. Be Practical: Focus on how short-term targets will be achieved. Consider how your sciencebased target can help mitigate business risks. Be Agile: Communicate how your longerterm approach can adapt to future business challenges.

12 Your Guide to Science-Based Targets / carboncredentials.com / 12 Engage with your stakeholders A vital part of developing your science-based target is engagement with key stakeholders to get early input and buy-in. You need to consult closely with senior decision-makers, suppliers, investors and other influencers from the outset. Otherwise, when you finally present your proposal for a science-based target to leadership, you may find they are reluctant to commit to it. As an expert in stakeholder engagement on emissions reduction, Carbon Credentials can help you integrate this vital activity into your process from the start. Achieving your science-based target for emissions reduction could appear extremely challenging at first glance. However, when combined with a clear, collaboratively developed strategy for the short, medium and long term, the target will seem much more achievable and stakeholders will feel more comfortable committing to this goal. Short term: Understand the potential projects and associated investments making up the decarbonisation pathway at asset level. Medium term: Gain insights into the opportunities available, particularly for Scope 3 emissions at asset level. Long term: Evolve and develop plans for your organisation.

13 Your Guide to Science-Based Targets / carboncredentials.com / 13 Your stakeholder engagement priorities: Identify key stakeholders that can influence or implement emission reduction projects Consult with stakeholders to align with existing initiatives, identify opportunities, and gain buy-in Specify scenarios based on business plans and factors that will impact emissions Achieve support from across your organisation to explore setting a science-based target

14 Your Guide to Science-Based Targets / carboncredentials.com / 14 How Tesco set an ambitious but achievable target How do you decide what science-based target your organisation is confident to commit to? Will you aim for the minimum science-based target requirement to align with a global warming limit of 2 C or set a more ambitious target in line with 1.5 C? Consider the recent example of supermarket retailer Tesco, who worked closely with Carbon Credentials to develop science-based targets that are credible and realistic, given its commercial objectives and the evolving policy landscape. Carbon Credentials used a combination of methodologies to model absolute and intensity targets, Scope 3 emissions, and 1.5 C and 2 C scenarios in comparison to Tesco s previous 2050 zero carbon ambition. Tesco s Scope 3 emissions were screened, showing a solid understanding of its value chain impacts. As these emissions constitute over 40% of its overall footprint, Scope 3 targets were set to meet SBTi criteria.

15 Your Guide to Science-Based Targets / carboncredentials.com / 15 Tesco chose an ambitious science-based target aligned with a 1.5 C warming scenario the first corporate in the world to do so. It also set 2 C aligned targets for its supply chain. This equates to absolute greenhouse gas emissions reduction targets of: 35% by % by % by 2050 With rigorous assessment, robust analytics and practical recommendations from Carbon Credentials, the Tesco climate change team demonstrated it fully understood the costs, benefits, and feasibility of setting its science-based targets. This enabled the team to secure agreement from Tesco senior leadership and approval from the SBTi. Tesco publicly announced its targets in May 2017, to wide commendation by stakeholders and the media. Subsequently, the retailer successfully reduced emissions by 13% during 2017 putting it well on track to achieving its science-based targets. Science-based targets have helped us, for the first time, to align our efforts to act on climate change with those of the global community. Tesco

16 Your Guide to Science-Based Targets / carboncredentials.com / 16 Carbon Credentials approach We have summarised the main steps in our science-based target setting process. Throughout this process it s vital that you apply the principles we have covered in this guide, engaging with decision makers and thinking strategically to ensure a successful outcome. Set Targets for Scope 1 & 2 Emissions Select the right baseline year, pick the correct methodology and model a science-based emissions trajectory under both 1.5 C and 2 C scenarios. Build a Strategy Assess emissions reductions from current and potential projects. Scope 3 Gap Analysis Assess the relevance of each Scope 3 emissions category and identify data sources. Scope 3 Modelling Calculate Scope 3 emissions based on the outcomes of the gap analysis. Set Scope 3 Targets Set ambitious targets for at least two-thirds of your Scope 3 emissions using the SBTi target hierarchy.

17 Your Guide to Science-Based Targets / carboncredentials.com / 17 Getting your target validated Step 1: Commit to the science-based target process Submitting a commitment letter to SBTi indicates that your company will work towards setting a sciencebased target for emissions reduction. Your company will then be listed as Committed on the SBTi website. Step 2 : Submit your target for SBTi validation Once your target has been developed and decided, your company must submit it in the precise format and detail required by the SBTi. They will then verify your submission against their rigid criteria, and inform you whether your target has been formally approved. Optimising your submission with Carbon Credentials can help reduce the likelihood of SBTi deciding that your target needs revision or further development. Step 3: Announce your science-based target Upon approval, you will be required to publicly announce your target. You will be able to use the SBTi logo to demonstrate that your target has been verified in line with the scientific consensus on emissions reduction and will be listed on the SBTi website as approved. Carbon Credentials can support your company in communicating its science-based target commitment effectively.

18 Speak to Carbon Credentials about setting a science-based target Carbon Credentials is supporting a range of leading organisations in developing science-based targets, gaining SBTi approval and reducing emissions in line with ambitious targets. We re ready to help you achieve your objectives with science-based targets. Carbon Credentials Energy Services Limited 2018 Contact us T: +44 (0) E: info@carboncredentials.com Follow linkedin.com/company/carboncredentials