The following Q&A with South Pole's Charles Henderson has been republished and originally appeared on Sustainable Brands.
Many companies are intrigued about setting science-based targets, yet are unsure about what this means in practice. So, we spoke to South Pole's Charles Henderson to learn more.
The number of companies basing their sustainability goals in climate science has grown dramatically in the past year — with Iron Mountain and Target among the latest players to set science-based targets (SBTs) that have been approved by the
Science Based Targets initiative (SBTi), which assesses and validates corporate climate goals.
Charles Henderson, Head of Corporate Climate Risks and Opportunities at carbon finance consultancy South Pole, points out, many companies are intrigued about setting a SBT, yet also unsure about what this means in practice and how it works. So, we picked his brain to learn more.
In a nutshell: the process of SBT-setting requires an understanding of what is (and is not) included, having a clear business case and resource plan; and, often, applying for an official endorsement of the targets set.
Whilst many high-profile companies have committed to SBTi endorsement, others have set targets that aren't validated. But this in itself is already a big accomplishment — having companies shift the way they set targets to better align with climate science.
However, external validation by the SBTi can make a lot of sense due to its communication and reputational gains, which help build trust with stakeholders. But achieving validation can also be a challenge: Submission comes with a cost and there is a risk that your targets may not pass validation. That is one reason why many companies choose to get support from an external advisor — to ensure targets are ambitious and achievable, but that they pass validation criteria.
And then the real challenge begins, which is defining ways for how to achieve your targets.
There is no "one solution fits all," since the best approach to implementing an SBT also depends on the company and the industry it operates in. It's different for a restaurant chain, that should foremost look at their suppliers; than for an IT firm, that most likely worries more about energy consumption. It's about understanding your CO2 impact first and identifying key “emission hotspots" before starting to design targets and acting on implementation:
At first, big international companies with large carbon footprints approached the SBTi. Nowadays, setting these targets is becoming mainstream practice for companies of all sizes and sectors: To date, over 500 companies have either set or agreed to set them. Interestingly, many of these are leading food or beverage companies, as an article in Global Policy Journal points out, counting big brands such as Mars, Nestlé, Unilever, General Mills, Kellogg's, Danone, McDonald's and PepsiCo.
The speed at which these consumer goods companies have committed to science-based targets is a trend to follow: Despite the fact that the majority of their emissions are in their supply chains, where it is most difficult to achieve reductions, tackling them makes a lot of (business) sense. When the agricultural produce that they rely on is under real threat due to climate change, setting ambitious strategies to reduce and mitigate the effects achieves multiple objectives.
Stakeholder demands are another key reason. Consumers are becoming more conscious of the production process and the environmental impact of food and beverages. Six years ago, Oxfam launched a campaign that targeted the top ten global food and beverage manufacturers and pushed them to consider the indirect emissions from their supply chains (Scope 3 emissions). Over the course of the campaign, the NGO also suggested the use of science-based targets to do so and this pressure seems to have paid off.
Companies can now set and evaluate targets that align with a 1.5°C warming trajectory as of mid-October. This was a necessary update after the latest IPCC report reduced the maximum safe threshold from 2.0ºC, and outlined the urgent action we all need to take to avoid the disastrous effects of climate change.
So, what does this update mean in practice?
This update means that companies must be prepared to invest more time in setting and achieving their targets, and to truly accelerate their ambition. On the upside, communication to stakeholders becomes more meaningful as all targets will be more closely aligned with the latest climate science — and this shows true thought leadership and commitment.
South Pole is hosting a webinar on 21st of May to walk companies through this update and what it means in more detail. Click here for more information.
In our experience, there could be three different reasons:
We expect the SBT trend to accelerate substantially, especially given the growing grass-roots movements and overall momentum for climate action across the globe.
Since officially launching in June 2015,