Target-setting initiative to no longer accept ‘well below 2°C’ temperature targets from corporates, in response to “increasing urgency for climate action”.
The corporate sector is ready and able to adjust to new 1.5°C-aligned emissions reductions targets, according to Alberto Carrillo Pineda, a co-founder of the Science Based Targets initiative (SBTi), the global body enabling businesses to set emissions reduction targets in line with climate science.
SBTi has unveiled a new strategy to increase the minimum ambition in corporate target setting from limiting climate change to ‘well below 2°C’ to 1.5°C above pre-industrial levels. The strategy is in response to “increasing urgency for climate action and the success of science-based targets to date”, said SBTi.
Conceived in 2015, science-based target setting now covers nearly 20% of the global economy, according to SBTi. Between 2015 and 2020 companies with validated targets cut emissions by 25% compared with an increase of 3.4% in global energy and industrial emissions.
“There has been an explosion of ambition among the companies that are part of the SBTi and a 1.5°C target is the most common target we have approved,” said Pineda, recently also appointed managing director of the organisation.
1.5°C-aligned targets represent 66% of all submissions to the SBTi in 2021 to date. Overall, more than 600 companies from across the world have committed to the highest 1.5°C-aligned ambition through the SBTi’s Business Ambition for 1.5°C campaign since it launched in February 2019 in response to the Intergovernmental Panel on Climate Change’s (IPCC) Special Report on 1.5°C. These companies represent US$13 trillion in market capitalisation, said SBTi.
The change in strategy by SBTi also has been driven by a “significant change in the ecosystem”, Pineda added, with new climate goals set in the EU, UK, Japan and the US. “There is a different context than a few years ago and SBTi felt it was important to reflect the changing reality. It is clear that 1.5°C should be the ambition for any credible climate target for a company.”
Moreover, many of the companies that have already set 1.5°C targets are now focusing on their supply chains, encouraging them to align with 1.5°C or net zero trajectories, said Pineda. Additionally, civil society movements have added to the pressure on companies to set such emissions reduction targets.
IPCC Working Group 1’s contribution to its sixth assessment report is due to be released in August.
Consistency for companies and investors
The new strategy will enable SBTi to consistently provide businesses with the “most robust target-setting framework” so they companies can confidently align with climate science.
“We want to harmonise frameworks so we can agree and use a consistent set of scenarios and metrics and science provides an objective way to define these,” said Pineda. “We think many actors are willing to go in that direction and we are now embarking on a different type of work to the technical work we have done in the past. SBTi is happy to transform itself to move in that direction.”
Harmonising and aligning as much as possible with other initiatives in the climate action space will send a “consistent signal to companies and financial institutions” said Pineda. A simple, clear goal of 1.5°C and net zero emissions by 2050 will help many of the other climate initiatives facing similar challenges.
The new strategy includes the adoption of new governance and operational models to strengthen SBTi’s technical authority while providing a more structured and agile project management approach to support efficient, effective and exponential growth. This will include a new and independent technical decision-making body that will help ensure the robustness of key technical decisions, including the selection of scenarios, target setting methods and the approval of new standards and revision of existing ones.
“Covid-19 and climate breakdown are the two biggest challenges facing life as we know it,” said Pineda. “We can’t solve either without widespread global action. For Covid, it is vaccination of people. For the climate, it is decarbonisation of our economies. We need every company to play its part, by setting science-based 1.5°C-aligned emission reduction targets to help us halve global emissions in the next eight years.”
The SBTi is a partnership between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF).