What are science based targets and how can they help with energy management?

Slide / infographic explaining science based targets
What are science based targets?

Science based targets are set to achieve the carbon reductions needed to limit global temperature increases to below 2 degrees

Science Based Targets are an initiative set up by WWF, the World Resources Institute, the UN Global Compact and CDP.

The group define science-based targets as follows:

“Targets adopted by companies to reduce greenhouse gas (GHG) emissions are considered “science-based” if they are in line with the level of decarbonization required to keep global temperature increase below 2 degrees Celsius compared to pre- industrial temperatures, as described in the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC AR5).”

The CDP holds and provides data on consumption and emissions from companies and cities around the world.

Some of these datasets are free to access.

For example you can view and chart Scope 2 emissions (emissions from purchased electricity, heat, steam and cooling).

Chart showing emissions from global top 500 companies
Scope 2 emissions from global top 500 (truncated)

This shows that major emitters include miners, steel makers and retailers.

Scope 2 emissions are important because they are caused as a result of activities that companies can control and change.

Transparent information on the level of Scope 2 emissions could cause companies to increase their purchases of renewable energy and step up energy efficiency measures.

Corporations have a clear role to play in the transition

According to the World Resources Institute:

  • The corporate sector is the world’s largest source of emissions.
  • 80% of the world’s 500 largest companies have targets in place.
  • Over 200 companies have signed up to the science based targets initiative

But the Guardian says that most global companies still don’t have any obligation to cut emissions. They do try, but what they do isn’t enough to make a real difference.

Advocates of Science Based Targets argue that the benefits of setting targets include:

  • Building long term value
  • Innovating
  • Saving money
  • Becoming more competitive
  • Being credible and influential

The pressure on companies to have some form of commitment, target and measurement and verification system is likely to continue as countries recognize the need to reduce emissions and decouple GDP growth from energy usage.

How do you set Science Based Targets?

There are 7 methods put forward by the group

1. The Sectoral Decarbonization Approach (SDA)

The SDA looks at how similar energy intensive companies can choose the lowest cost technology mix to meet their energy demand.

The SDA looks at how sectors differ from each other, the potential for reductions and how quickly each sector grows over time. A free web-based tool has been developed for companies to use but is currently offline.

2. The 3% solution

Developed by McKinsey, WWF, CDP and Point 380, US corporates would cut emissions by 3% per year overall, while individual corporates would have tailored targets using a tool called the Carbon Target Profit Calculator.

This tool tells you how much you could save if you followed its guidance.

3. BT – CSI

BT (British Telecom) have come up with a Carbon Stabilization Intensity (CSI) target in 2008 is calculated  by comparing its emissions with how much it as a corporation contributes to GDP.

The contribution to GDP is defined as “value-added”, and the CSI is measured as the emissions per unit of value added.

BT’s CSI target is to reduce CSI by 20% by 2020.

4. C-FACT

Corporate Finance Approach to Climate-Stabilizing Targets (C-FACT) is a relative target that divides a company’s greenhouse gas emissions footprint by its GDP contribution (measured by gross profit) and calculates a Carbon Intensity Reduction Rate that takes into account growth rate.

The company then commits to the target, creates an annualized pathway and works its plan.

5. CSO’s context-based carbon metric

The Center for Sustainable Organization’s (CSO) developed a context-based carbon metric along with Ben & Jerry’s in 2006.

The metric compares emissions from an organization to targets based on climate change mitigation scenarios. It works out an individual target that looks at how the organization will grow and is updated based on what others are doing and the change in global emissions over time.

6. GEVA (Greenhouse gas emissions per unit of value added)

The GEVA analysis suggests reducing greenhouses gases per unit of GDP by 5% a year to meet the 2 degree target, which then translates into a corporate target of 5% reduction in GEVA per year. This seems similar in form to the BT-CSI at first glance.

7. MARS Method

The MARS method targets Scope 1 and Scope 2 emissions, where it has direct control and selects to “overdeliver” on targets on these emissions by targeting a reduction of -100% in 2040 rather than -80% in 2050. This takes pressure off Scope 3 emissions that cover agriculture and are harder to influence.

It is also based on an absolute reduction, with the objective to reduce Mars’ emissions by 8-% from its level of around 14 MT.

What about carbon budgets in the UK?

The one method missing from the Science Based Targets initiative is the system of carbon budgets in the UK – although the difference is that the initiative targets global companies.

The Climate Change Act in the UK set a target for the country to cut emissions by at least 80% by 2050 from 1990 levels in order to limit global temperature increase to as little as possible above 2 degrees C.

The first five carbon budgets covering the period to 2032 are now set in law.

For UK companies, these are targets that guide the policies introduced by the government such as subsidies and carbon taxes.

The Climate Change Committee (CCC) in the UK has looked at how emissions can be reduced at the lowest cost, given the available technology and policy. It recommends that:

  • Energy efficiency improvements are cost effective and save money.
  • Supporting innovation in technology will increase costs in the short term but help in long term.
  • As we move towards the long-term target, we should use measures that cost less than the carbon price projected by the government if available.

The budget is set to be consistent with EU targets – but we will need to wait and see how EU and UK climate change policy evolves after Brexit.

Summary and conclusion

The Science Based Targets initiative is a significant step in the right direction with commitment from some major companies.

Implementation by some of the largest companies in the world will cause a ripple effect through their supply chains and reduce emissions far beyond their own companies.

But there are concerns over whether the voluntary targets can be met and whether companies are even reporting their carbon footprint correctly.

Finally, companies in the UK should consider whether they should align their targets with UK policy or a global initiative – and to a large extent this will depend on whether their emissions are created in the UK or internationally.

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