What is SBT?

While setting the carbon targets, enterprises must consider the background of the global climate crisis, and also ensure the scientific and ambitious level of the objective, that is, to set emission reduction target that meets the requirements of the Paris Agreement or the United Nations Intergovernmental Panel on Climate Change (IPCC) to control the global temperature rise within 2℃ or 1.5℃.

Science-Based targets Initiative (SBTi) is just such a global initiative to call on enterprises to set up scientific carbon target and was jointly launched by World Wildlife Fund (WWF), Global Environmental Information Research Center (CDP), World Resources Institute (WRI) and United Nations Global Compact (UNGC) in 2015.

Benefits of setting SBT scientific carbon reduction targets

At present, the greenhouse gas emission reduction targets set by most enterprises are often for short term and without enough ambition, and even some of them are set at will. These targets will bring about emission reduction, but the effect will be slow and not effective. In contrast, the Science-Based Targets (SBT) objectively and scientifically sets the ambitious targets that enterprises need to achieve according to the emission reduction path of IPCC and International Energy Agency (IEA). The Science-Based Targets has laid a solid foundation for the long-term climate change strategy of enterprises, and can improve the competitive advantage of enterprises in the process of transition to a low-carbon economy.

As the energy manager of Landsec from the UK's largest commercial real estate company that sets scientific carbon targets said: "science will give meaning to our ambition and make it closer to reality: targets are no longer a bunch of imaginary numbers, but closely related to practical problems. The Science-Based Targets make us committed to what we need to do, not just what we can achieve. Therefore, the Science-Based Targets can prove the leadership of an enterprise and provide support for its long-term sustainable development strategy."

Any greenhouse gas emission reduction target, as long as it is formulated in accordance with the latest climate science theory and meets the requirements of achieving the target of the Paris Agreement, that is, to control the global temperature rise below 2℃ compared with that before industrialization, and strive to limit the temperature rise to 1.5℃, can be deemed as "Scientifically Based".

The Science-Based Targets must cover greenhouse gas emissions from the operations (scope I) and energy purchases of the company (scope III). If the value chain (scope III) emissions of the company account for more than 40% of total emissions, the ambitious scope III targets must be set.

What advantages can SBT for emission reduction bring to enterprises?

There are a lot of commercial values in Science-Based Targets. First of all, it can enhance the business adaptability of enterprises and enhance the market competitiveness.

Secondly, it can help enterprises adapt to the low-carbon economy faster, save costs and avoid the risk of asset stranding. The stage targets set by enterprises usually can reduce costs and improve operational efficiency, but they may make enterprises limited to "Low Hanging Fruit".

Thirdly, it can promote enterprise innovation and business practice. Enterprises that set Scientific-based Targets will consider sustainable development strategy in the long run, and derive new technology and financing options in emission reduction.

Fourthly, it can establish the corporate brand image. For investors, those enterprises that adopt the latest available scientific theories to set Scientific-based Targets tend to have lower climate risk.

Fifthly, it can help enterprises adapt to the changing policies. The stage targets set by enterprises will send signals to policy-makers that enterprises are taking climate change seriously, but the credibility of the targets will be limited by the strength of the targets. In a word, setting Scientific-based Targets does not conflict with economic growth, and enterprises can make sustained profits in low-carbon economy after making efforts to implement them.

How to set Scientific-based Targets for emission reduction

At present, there are three publicly available methods for setting scientific carbon targets

The first is the absolute emission compression method. All enterprises can reduce absolute emissions at the same speed in this way regardless of the initial emission performance. For example, Nestle, a global food and beverage company, has set an absolute target by committing to reduce its absolute greenhouse gas emissions from operating and purchasing energy by 12% between 2014 and 2020.

The second is the industry emission reduction method, that is to use the emission intensity convergence to set the physical intensity target. Intensity targets shall be set based on emissions reductions related to specific commercial measures, such as the carbon dioxide equivalent (tons) per ton of products manufactured by the company. For example, Covivio, a European real estate enterprise, has committed to reducing greenhouse gas emissions by 35% per square meter of scope I and scope II by 2030 compared with that of benchmark year 2017.

The third method is the economic intensity contraction method. The set target is expressed as the reduction of emission intensity carbon dioxide equivalent (tons) per unit of added value (US dollars). For example, Husqvarna Group AB, a manufacturer of outdoor power products, promised that by 2020, the emissions generated by companies operating and purchasing energy per unit of added value will be reduced by 30% compared with the benchmark year 2015. Although all three methods are applicable to multiple sectors, not all methods are applicable to all sectors. We encourage companies to choose the most ambitious approach that suits them.