Introduction and summary
Once your carbon footprint has been established, you can set climate objectives. We give you the keys to tackle this task independently.
The Definitions section summarizes the essential characteristics of a climate objective.
The Setting Your Reduction Targets section presents two approaches for defining a climate target:
From identifying feasible actions to defining emissions reduction targets
From defining emissions reduction targets to identifying necessary action
Whichever approach you choose, you will need to decide whether to set emissions reduction targets expressed in absolute or relative terms:
Choose between a climate objective of absolute or relative reduction of emissions
Definitions
Before we begin, let's look at the structure of any climate goal:
FOUR KEY ELEMENTS Each emissions reduction target must be broken down into four elements:
An emission reduction target should be broken down into the four following elements:
*You must choose (3) then calculate (4), or do the opposite. That is to say, you can set an annual objective for reducing your emissions and then calculate the percentage to which it corresponds in terms of the total objective to have been achieved by the target year; or you can set a goal to be achieved by the target year and then calculate the corresponding annual goal |
A CLIMATE GOAL MAY ALIGN WITH SCIENCE, OR NOT
A climate objective can be set according to the Paris Agreement: by aligning with an emissions reduction trajectory necessary to limit global warming to 1.5 to 2 degrees. These objectives are “Science-Based Targets” (SBT).
However, a climate target does not necessarily have to be SBT. |
A CLIMATE OBJECTIVE CAN BE ABSOLUTE OR RELATIVE
An absolute climate target focuses on a company's total emissions, regardless of their sources across Scopes 1, 2 and 3.
A relative climate target focuses on a company's emissions per unit. It can use “physical intensity” with a physical unit (emissions per product manufactured/per service provided/etc.). Or it can use “economic intensity” with an economic unit (total annual emissions divided by annual profit). Finally, it can use emissions per employee (total annual emissions divided by the number of employees). |
Define your climate objectives
There are different approaches to setting climate targets:
1. From identifying achievable actions to defining climate objectives.✍️
In a word: we must first identify all the feasible actions and map their emission reduction potential. After selecting a few actions to implement, an approximation of the total amount of emissions that would be avoided through their deployment must be calculated. Then all you have to do is set a target date!
Procedure: start by sharing your carbon footprint with employees. The ESG team can then take the time to think about ways to reduce the company's emissions and organize workshops to prioritize climate actions. By adding up the impact of the selected actions, you obtain a total reduction objective for your emissions. You can then decide the pace at which you want to implement these actions to set a target year and an annual reduction goal.
Advantages/disadvantages :
🟢This method is built around concrete and achievable objectives. It allows the company to advance its climate strategy from a solid starting point.
🔴However, it can limit a company's emissions reduction efforts in the medium and long term. It can also distance the company from the Paris Agreement.
🫵This is why we recommend the second approach to setting a climate objective:
2. From defining climate objectives to identifying achievable actions. 💪
In a word: this approach involves setting an overall emissions reduction goal before selecting actions to achieve it by a target date. It is strongly recommended to use objectives aligned with the Paris Agreement rather than choosing arbitrary reduction values.
Procedure: the part below explains how to set a goal aligned with the Paris Agreement.
Option 1 – Use Reduction Reference Values
To respect the Paris Agreement and keep global warming below 1.5°C or 2°C increase since the pre-industrial area, the world must achieve a balance between emissions and absorption of Greenhouse Gases. between 2050 (1.5°C) and 2070 (2°C).
This objective translates directly into annual reduction objectives of 7% and 4% per year compared to a reference balance established in 2020.
These annual objectives must be maintained until 90% to 95% of initial emissions have been reduced.
Concretely, for companies, this translates into objectives over 5 to 10 years to maintain an annual reduction of between 4 and 7%, across all three scopes. If you have just started your climate strategy, we recommend that you define short-term objectives to start.
Option 2 - Use the Science Based Target repository
The Science-Based Targets Initiative (SBTi) is the most widely recognized organization for certifying reduction targets aligned with the Paris Agreements. However, it is not necessary to be certified by SBTi to set SBT-compliant goals thanks to the freely accessible SBTi guides on their site. |
According to the SBTi, an annual and absolute reduction in emissions of 4.2% (on Scopes 1, 2, 3) is the minimum effort required to align with the 1.5°C scenario of the Paris Agreement. This objective, or “SBTi absolute contraction method”, applies to all sectors.*
If you follow the SBTi objective of absolute contraction of emissions, you must establish a reduction objective to be achieved by a target year. Once a target year is set, this objective can be determined by performing the following calculation: 4.2 times the number of years between the base year and the target year.
For certain sectors, SBTi has created specific guidelines (based on relative objectives). Sectoral guidelines are covered in this article. |
Furthermore, SBTi only certifies companies setting SBT objectives over a trajectory of a maximum duration of 10 years (between the reference date and the target date). This, even to obtain SBTi Net Zero certification based on the long term.
Advantages/disadvantages:
🟢 The objectives aligned with the Paris Agreement are ambitious! They show other organizations, employees, and consumers that your company is at the forefront in the fight against climate change.
🔴 These long-term objectives may seem disconnected from operational constraints and must be supported by internal awareness and a coherent action plan. What most companies have not succeeded in doing at the moment according to this NGO.
3. Decide whether to set absolute or relative emissions reduction targets. 🔎
Whatever your approach to defining climate objectives, you perhaps consider that it would be more relevant to set relative reduction objectives, that is to say reduction per employee, per euro of income or product sold. These relative objectives are particularly attractive for growing companies, which will redouble their efforts to compensate for the increase in emissions linked to the expansion of their activity if they choose absolute objectives.
This is entirely possible but with some caveats. In fact, a company that reduces its emissions in relative terms can increase them in absolute terms at the same time! It doesn't matter if the company steals market share from its competitors, emissions are reduced overall. On the other hand, if the company operates in a growing market, total emissions may increase.
If you aspire to stay close to the Paris agreements, be aware that certain sectors are considered less legitimate than others in setting relative climate objectives: high-growth sectors.
For example, a relative climate target for a company operating in the fast fashion sector, a rapidly growing market, will be considered less acceptable than a relative target for a company in the food sector. There are currently no strict guidelines on the subject.
Finally, if you want to use the science-based targets benchmark, SBTi has produced economic intensity reduction targets (in terms of income) for all sectors. SBTi sets the goal of reducing economic intensity by at least 7% each year.
If you would like to be supported by our experts in implementing SBTi objectives, we offer support for the climate action plan:
SUPPORT FOR THE ACTION PLAN
The objective of this service is to build a carbon trajectory aligned with the objectives of the Paris Agreement. To do this, there are 3 steps:
Do not hesitate to make an appointment with your account manager to find out more about the service. |