Corinna Kester, Manager, Advisory Services, BSR
As companies increasingly recognize the need to act on climate change, many have set targets to reduce greenhouse gas emissions. According to a CDP study, more than 75 percent of large company respondents have reduction targets. But most company targets are not aggressive enough to meet global climate goals, and we are currently on a trajectory to reach a global temperature rise of 4°C by the end of the century, which most would consider catastrophic for people, the planet, and business.
For companies to play their part in limiting warming to 2°C, they must set science-based reduction targets that align with the aggressive emissions reduction pathways outlined by the Intergovernmental Panel on Climate Change (IPCC).
This science-based approach is gaining momentum. More than 30 companies, including BT, General Mills, Honda Motor Company, National Grid, and Unilever, have already committed to setting science-based targets. And stakeholders increasingly expect companies to set science-based targets for their own operations. Additionally, starting in 2016, the CDP will incorporate questions to incentivize and track company use of science-based approaches.
Three questions can help company leaders consider this approach:
- How low will you go? Within the IPCC recommendations, there is a wide range of potential reductions. How much will your company reduce your emissions? What margin of error will you aim for to ensure that you achieve your target?
- How fast will you go? Some climate models recommend large immediate reductions in emissions, while others are based on slower reductions over time. How quickly will you reduce emissions? Which practices and technologies can you deploy today, and which need further development before they can be scaled?
- What is your fair share? There are several different ways to calculate the emissions reductions needed from your company, including both globally applicable and sector-based approaches. Which methodology will you select to determine your fair share?
In addition, because science-based targets can be ambitious, they should be paired with thoughtful planning for how the targets will be achieved. This is both a top-down and a bottom-up process.
From the top down, you should align your company’s climate targets with business priorities, stakeholder views, and the latest climate science. From the bottom up, you should understand the new initiatives you will need to launch to achieve the target. This includes the expertise and technology your company already has, along with broader approaches that can only be scaled through supplier and cross-industry collaboration. To help companies map available strategies, BSR is developing “climate wedges”—a set of sector-specific emissions-reductions options.
Even if your company is not ready to release science-based targets, it should be assessing what such targets would look like. Climate science may be complex, but there are established methodologies to choose from, and a number of corporate leaders have already set science-based targets. There are good options for getting science-based targets right, and these will be necessary to avoid the most dangerous effects of climate change.
Each month, BSR's Climate Science Initiative focuses on one aspect of climate change and its relevance for companies. This blog summarizes the first discussion. Our three spring meetings focus on the interface between climate change and water, agriculture, and energy. To find out more about the initiative or to join, please contact Corinna Kester.