I’ve recently completed a client project which involved researching and writing an in-depth business guide on science-based targets (SBTs). SBTs are the new carbon kid in town, they offer an accountability mechanism for companies to demonstrate tangible, more meaningful leadership on carbon reduction.
SBTs are not just any old relative carbon targets plucked from the sky, they are aligned with climate science and demand super aggressive cuts in emissions. I’ll not say too much more about how they work as the targets are quite complex, but you can read more about them here.
What’s fascinating is how fast SBTs are being adopted by global corporations. Since they were launched in 2015 through the Science Based Targets Initiative, more than 320 companies have signed up to commit to them.
Because these targets are so demanding, and long-term in nature – companies are encouraged to set SBTs up to 2050 – there’s no guarantee that they will actually be met. But what they will do is encourage more divestment from fossil fuels; you can’t simply meet a SBT through being more energy-efficient, you have to invest in renewables.
The effect of SBTs won’t just be confined to the companies who commit to them either. Part of setting a SBT involves looking at your supply chain (Scope 3 emissions). So if a company’s Scope 3 emissions account for more than 40% of its total emissions, then a Scope 3 target must also be set – although this doesn’t have to be science-based.
This suddenly brings a lot more entities into the mix. SBTs are likely to filter down into the supply chain over time, meaning that suppliers – often smaller companies – will likely face increasing demand for carbon reporting and disclosure from the customers they serve.
Greater scrutiny on embodied emissions in purchase agreements for goods and services may be applied, for instance. If a supplier operates a particularly carbon-intensive site, they may come under pressure to address that. Emissions that occur downstream in a supply chain from activities like waste management can also fall under Scope 3 emissions, meaning that specialist service sectors could also start to feel the heat.
Given these potential scenarios, I am surprised that there is still a real lack of awareness around SBTs. Most business leaders I talk to, unless their company has set a SBT or is thinking of doing so, remain blissfully ignorant of what these targets are, or what implications they carry for wider industry.
In the coming years, decarbonisation will be one of the biggest (if not the biggest) drivers for business. And SBTs provide a crucial framework to deliver on that. The largest corporations in the world have already committed to them. That should be reason enough to get them on your radar.