New science-based targets policy: Increasing transparency and accountability
The science-based targets initiative (SBTi) is designed to help companies reduce their greenhouse gas emissions, demonstrate their commitment to creating a climate-secure world, and drive successful business operations. But if the UK is to align to a 1.5 °C trajectory, intervention is needed.
It’s clear that some organisations are stalling progress towards their climate pledges, triggering the science-based targets initiative to update their Commitment Compliance Policy.
As of 31st January 2023, organisations will face more rigorous requirements in validating their net zero targets and progress. It means companies will be held more accountable for acting on their net zero commitments.
Andrew Tasker, Associate Director – EIA & Sustainability, explores the new SBTi changes on the horizon and how they will affect companies committing to net zero.
What is a science-based target?
A science-based target (SBT) is a goal or set of goals developed by a business to provide a clearly defined pathway to reduce greenhouse gas (GHG) emissions. The target details how much and how quickly a business needs to reduce its GHG emissions. To be ‘science-based’, an emissions reduction target must be in line with the scale of reductions required to keep global warming below 1.5°C from pre-industrial levels in line with the most ambitious aim of the 2015 Paris Agreement.
Why are science-based targets important?
Through the Paris Agreement, world governments pledged to limit global warming to well-below 2°C, preferably to 1.5°C, above pre-industrial levels. In 2018, the Intergovernmental Panel on Climate Change warned that temperature rise must not exceed 1.5°C. Temperatures higher than this will cause extreme heatwaves, droughts and rising sea levels which threaten entire ecosystems.
To meet the 1.5°C target, greenhouse gas emissions must halve by 2030, and fall to net zero by 2050. Industry is responsible for the largest number of emissions across the globe, so changing how businesses operate and accelerating 1.5°C-aligned corporate targets is vital.
Science-based targets have a definitive role in preventing global temperature rise, helping us shape emissions reduction targets backed by climate science. Thousands of organisations worldwide have committed to net zero. Yet it’s becoming more apparent that some were quick and keen to make their climate pledge, but slow and noncommittal in developing credible pathways.
Are businesses on track to achieve net zero?
We launched a Net Zero Carbon Progress Check tool in April 2021 to enable businesses to review their current net zero carbon position and determine the likelihood of achieving their carbon reduction targets before the 2050 deadline. The Progress Check data we collected from over 700 participants showed that over 45% of businesses don’t believe they’re on track to achieve net zero carbon. Even more concerning is the fact that 36% of participants had no carbon reduction targets in place at all for the next 10 years.
Why is the science-based targets policy changing?
- To ensure companies are held accountable to their climate pledges
- To provide consistency in time frames
- To provide increased transparency
- To minimise greenwashing
"The new changes in SBTi policy will bring about increased accountability to company’s pledges and delivering on their commitments and public promises. The time for action is now when committing to GHG emissions reductions and the SBTi’s more rigorous requirements should ensure quicker action and less greenwashing."
Andrew Tasker
Associate Director - EIA & Sustainability
How and when is the science-based targets initiative changing?
From 31st January 2023*, the science-based targets initiative is enforcing a new Commitment Compliance Policy. This brings positive change in increasing transparency and accountability and, importantly, places emphasis on tangible validated targets over commitments.
These changes include:
- The new policy will no longer give companies more than 24 months to provide concrete plans to meet public climate pledges. It will not allow extensions to the commitment time frame to be made on a case-by-case basis.
- All companies and financial institutions with commitments will have 24 months to submit their targets for validation from the original commitment date.
- All companies that fail to submit their targets for validation within 24 months will no longer be removed from the website, they’ll be marked as ‘removed’.
- Companies will be expected to explain how they’ll manage risks using climate scenarios.
*Companies that face deadlines before 31 January 2023 can seek an extension to 31 July 2023
What does this mean for companies and stakeholders?
The new policy will help reveal which companies are actioning their commitments and actually setting science-based targets.
But it’s not the same for every industry and sector - the rate of decarbonisation differs. This is stated in the Climate Change Committee’s (CCC) sixth carbon budget and is also now in the SBT sector specific guidance and trajectories.
The table on the right from Science Based Targets outlines exactly what the changes will mean for businesses that have committed to setting emissions reduction targets. Click on the image to enlarge.
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