In February 2019 the Science Based Targets initiative (SBTi) announced that it will be updating its guidance, including the criteria for recognising that a company has set a goal in line with meeting the ambitions of the Paris Agreement. The Carbon Trust’s lead on science-based targets, Guy Rickard, explains these changes and sets out what corporate sustainability professionals need to know.
Why are these new changes being introduced?
The Paris Agreement set out an international ambition to hold the increase in global average temperature well below 2°C above pre-industrial levels, and to pursue efforts to limit this to 1.5°C. However, at the time the Paris Agreement was signed only limited information was available on what a pathway to 1.5°C would look like, and the relative differences in impact between 2°C and 1.5°C were not well understood.
In response to this, in October 2018 the Intergovernmental Panel on Climate Change (IPCC) published a Special Report on Global Warming of 1.5°C, gathering together the best available science on the subject. This report warns of severe consequences from a failure to prevent global warming exceeding 1.5°C, as well as presenting a number of new emissions scenarios that would keep temperatures within this boundary.
Following the release of this report, the SBTi has announced it will introduce major new updates that will encourage companies to set carbon reduction targets consistent with the higher ambition aim of the Paris Agreement.
What is being changed?
The SBTi has announced it will release new technical resources for companies and an updated set of target validation criteria, which will reflect the latest science in the IPCC’s 1.5°C report. These new resources will include tools and guidance to enable companies to set targets that are aligned with a well below 2°C pathway, rather than just a 2°C pathway.
At this stage the SBTi has not confirmed its definition of well below 2°C, indicating only that this “will be informed by the IPCC Special Report and underlying scenarios”. However, it is likely that using the Beyond 2°C Scenario (B2DS) pathway – published in the latest International Energy Agency (IEA) Energy Technology Perspectives report – will be an acceptable methodology. This can currently be used as the basis for modelling using the existing Sectoral Decarbonisation Approach for setting science-based targets.
When will changes be introduced?
The new technical resources and updated set of target validation criteria are expected to be available to companies in April 2019.
New validation criteria, requiring approved targets to be in with a well below 2°C pathway, will come into force from October 2019.
What do the changes mean for a company that has not yet submitted its science-based target to the SBTi for approval?
For a company looking to submit its target for approval from October 2019, the target will only be accepted if it is aligned to a well below 2°C or a 1.5°C scenario. Targets consistent with just 2°C will no longer be approved.
If a company makes a commitment to set a science-based target before April 2019, and is looking to submit its target before October 2019, a target aligned to 2°C should still be acceptable.
However, best practice for companies that have already set a target that is 2°C aligned, but not yet gone through the approval process, is to update those targets to align with a well below 2°C or 1.5°C pathway before submitting to the SBTi. This will make approval more straightforward, demonstrate leadership on climate change, and avoid the requirement for a more ambitious target to be calculated at a future date.
Will this impact companies that already have an approved 2°C science-based target?
Under existing SBTi validation criteria, companies are already expected to review their targets every year, and to re-assess their validity – and update them if necessary – at least once every five years. Companies that currently have an approved 2°C target should therefore be required to update their target to be consistent with a 1.5°C or well below 2°C pathway within five years of the date they received approval of their original target.
Targets aligned with a well below 2°C or 1.5°C scenario will also become mandatory in 2025. This means that all approved science-based targets will need to be aligned with a 1.5°C or well below 2°C pathway at this point.
What does “well below 2°C” actually mean?
The SBTi has not yet given a precise definition for when a target will or will not be “well below” 2°C. However, the B2DS pathway developed by the IEA has been aligned with a 1.75°C trajectory and this is likely to be an acceptable pathway to follow.
How will more ambitious targets be communicated?
Until now, approved targets were simply recognised as being science-based by the SBTi. Once these changes are introduced, the level of ambition of all existing and new targets will be published on the SBTi website, and classified under one of three categories: 1.5°C; well below 2°C; and 2°C.
What about targets for scope 3 emissions?
No specific details have been released about updates to the validation criteria related to scope 3 emissions targets. But companies may be safer to assume that alignment to a 1.5°C or well below 2°C pathway could also be required for this aspect.
Where can I get support to set a science-based target?
The Carbon Trust has experience working with over 50 companies to help them set science-based targets, across multiple industries. Support can be provided at any stage of the process, including initial scope 1 and 2 target setting, the development of scope 3 targets, and submission of targets to the SBTi for approval.
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