Why should company consider setting a Science Based Targets

According to Nordic Sustainability, climate strategy is a reasonable choice when preventing business disruption & threats to competitiveness. Climate strategy considers such things as carbon pricing regulation, regulatory standards (EU taxonomy, etc.), access to markets (Chinese climate targets, etc.) and early-moving competitors.

If a company seeks to be a part of the solution, it must take a part in current policies. In order to stay below 1.5C warming, 50% emissions must be reduced by 2030. “It’s OK not to be there yet – but it’s about time to start”, claims Danish consultants.

The starting point of corporate sustainability transformation is traditional company. It goes forward as today’s sustainability “leader”, seeing pretty distant aim of sustainable company which works according 1.5C scenario, has societal purpose and no significant negative impacts across operations.

There are strategic building blocks in this transformation. They are:

Climate strategy with targets of scope 1, 2, 3 and their implementation,
Waste reduction and circularity,
Product impacts & innovation with redesigned portfolio,
People impacts with labour conditions, inclusion and employee terms,
Other factors, like governance, business ethics, finance and tax.

All these blocks build a value chain.

Starting with the basics, Nordic Sustainability presents Greenhouse Gas (GHG) Protocol. It establishes comprehensive global standardized frameworks to measure and manage GHG emissions from private and public sector operations, value chains and mitigation actions.

Protocol is developed by World Resources Institute (WRI) and World Business Council For Sustainable Development (WBSCD) in collaboration with industry and other environmental groups. GHG Protocol supplies the world’s most widely used greenhouse gas accounting standards. In 2016, 92% of Fortune 500 companies responding to CDP used GHG Protocol directly or indirectly through a program based on GHG Protocol.

Using the GHG protocol, companies can understand their footprint: that is, CO2, CH4, N2O, HFCs, PFCs, SF6 and NF3 emissions. Scope 1 consists of direct emissions from company’s facilities and vehicles. Scope 2 are indirect emissions, caused by purchased electricity, steam, heating and cooling for own use. Scope 3 emissions comes from upstream and downstream activities.

Upstream activities include purchases of goods and services, capital goods, fuel and energy related activities, transportation and distribution, waste, generated in operations, business travel, employee commuting and leased assets.

Downstream activities include activities which happen to a finished product: again, transportation and distribution, processing of sold products, use of sold products, end-of-life treatment of sold products. Also it includes leased assets, franchises and investments.

When companies got their footprint analysis, they are ready for the Science Based Targets initiative (SBTi). It is the only credible programme for companies to base their ‘what’s good enough’ on when it comes to overall GHG emissions reductions targets. The Initiative is set up by CDP, WWF, WRI and UN Global Compact in 2015 to get companies to reduce their GHG emissions in line with science. Today, more than 1000 companies have committed and more than 500 companies have already developed targets in line with science.

Nordic Sustainability is a Copenhagen-based consultancy firm which brings sustainability into client’s strategy. They work both with the public and private sector and help to reduce emissions and operational impact, build capacity and handle ESG.