What you need to know about SBTs

Since CoP 21, 195 countries have pledged to reduce carbon emissions with the goal of keeping global temperatures below 2°C. According to the Intergovernmental Panel on Climate Change (IPCC), achieving this feat requires that global emissions, between now and 2100, stay within a carbon budget of 485 billion tonnes (485 PgC). Although the Intended Nationally Determined Contributions (INDCs) presented at CoP 21 bring us closer to the mark, they aren’t enough, and more ambition will be required from governments in the future.

As a major contributor to global emissions, business plays a critical role in the decarbonisation project.

The SBT concept – why it’s different and why that matters

Corporate sustainability planning often revolves around how much a company believes it can do to tackle climate change. But with science based targets (SBTs), companies start with the IPCC’s carbon budget. It’s not about how much a company is willing to do to mitigate climate change but what it needs to do. SBTs are prescriptive. SBTs tell a company: “the science shows that your fair share of the budget is X. You’re either doing your part, or you’re not.”

Science-based goal setting completely changes how business will interface with the climate change equation.

SBTs help companies to calculate their fair share of the emissions budget using any one of six modelling approaches. It is unsurprising that the levels of decarbonisation required for most companies to keep warming to well below 2° C are significantly greater than most internally generated goals. Science-based goal setting completely changes how business will interface with the climate change equation.

SBTs are a useful tool for defining ‘leadership’ on carbon.  Interestingly our experience is that SBTs, rather than frightening the life out of companies, can provide space for them to explore levels of ambition and options that they would normally have a tough time justifying internally. An interview with Dell’s John Pflueger highlights how setting SBTs supports their corporate governance and strategic planning:

“It has been an extremely useful process to go through: to understand the challenges and the potential technical solutions, to invest in the capability to measure progress. We are learning things that will fundamentally alter our thinking about our products and what we plan for in the future. And of course there are cost savings.”

A key incentive for businesses is that SBTs allow them to receive recognition and endorsement from civil society. The Science Based Target Initiative (SBT-I), driven by some of the world’s most recognised NGOs, such as The World Resource Institute (WRI), World Wide Fund for Nature (WWF), Carbon Disclosure Project (CDP), and UN Global Impact recognises climate business leaders on two platforms: the We Mean Business Coalition and the SBT-I’s Call to Action campaign.

SBTs are also a good proxy for companies to understand how regulations are likely to evolve. In the medium- to long-term, emission reductions in line with the IPCC’s 2°C pathway will be more than just a responsible business practice – they are likely to be required by national policies and regulations. The SBT process helps companies look at their options across these timeframes and position themselves early, thus minimising costs and business risks down the road.

With contributions by Roble Velasco-Rosenheim


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