Until very recently there was no agreed process for businesses to cut their carbon emissions. Now that is changing, thanks to the introduction of a rigorous methodology for achieving and reporting carbon reduction known as ‘science-based targets'
Thirty-five years ago, a critical moment in the history of climate science and policy arrived. The creation of the Intergovernmental Panel on Climate Change (IPCC) recognised that something was happening to the earth's climate, something that demanded action.
The IPCC's first assessment report on climate change appeared two years later in 1990, but it was another quarter-century before governments finally came together to formulate the Paris Agreement, binding 196 countries to policies designed to limit global warming to less than 2°C above ‘pre-industrial levels', and work towards a tougher target of just 1.5°C.
This was ground-breaking policy-making. Never before had so many countries recognised that humans were changing the climate of the planet, and potentially risking the future of present and future generations.
But then came the question: what will we do about it?
Taking action
The Paris Agreement was primarily about government policy-making, the so-called ‘nationally determined contributions' – country-by-country policies designed to make the 1.5°C target a reality. But it soon became clear that action from individual businesses was at least as urgent.
Sure enough, companies began announcing their own commitments to reducing carbon emissions. Many devised their own version of ‘net-zero' emissions targets, and some set up their own labels designed to show environmental responsibility.
But many of the claims required more substance. A review led by the UK and Dutch competition authorities in 2021 found that 40 per cent of a random selection of 500 companies globally were making environmental claims that could be misleading.
Setting the standard
This is where the Science Based Targets initiative (SBTi) comes in. Launched In 2015, the SBTi is a joint initiative from several international bodies, including the UN Global Compact and the Carbon Disclosure Project, to bring rigour to business claims and plans. It sets out how to calculate all emissions from a business, including the so-called Scope 1 direct emissions from ‘owned' sources, Scope 2 emissions from purchased energy and Scope 3 indirect emissions from right along the value chain.
The SBTi shows how these emissions should be measured and how reduction targets should be established. Science-based targets also set out what counts as progress and how that too should be measured. One key point is that companies cannot in most cases count carbon offsets. Instead, they have to reduce emissions at source.
Roadmap to net zero
Until recently, there was just one thing missing: an agreed method for reaching the Paris Agreement targets. That changed in 2021 with a new SBTi net-zero standard that set out a plan of action for businesses, including a ‘hierarchy' of what to do and when to do it, and a process for getting business plans validated by the SBTi.
The good news is that many companies are following it. The bad news is that many more are not. There are 1,500 companies in Europe with SBTi-approved targets for reaching the net-zero standard, 580 in Asia, but only 450 in North America.
But at least now no one can argue with the science. There is a consensus that all of this is real. And companies have the chance to get real, too.
Illustration by Elisa Macellari
