Once you have carried out an initial greenhouse gas assessment, the next step is to set climate objectives. This is a crucial stage in managing your carbon emissions.

This article gives you all the keys you need to get your organization going on this task.

Part II. Definitions highlights the core characteristics of any climate objective.

Part III. Target setting presents the two approaches to defining a climate objective:

III. 1. From identifying feasible actions to setting emission reduction objectives.

III. 2. From setting emission reduction objectives to identifying necessary actions.

Whichever approach you choose, you will need to decide whether to set your emission reduction targets in absolute or relative terms. This is covered in this article’s last part:

III. 3. Deciding whether to set absolute or relative emission reduction targets.

Before we begin, let's look at the key structure of any emission reduction target:

There are different approaches to setting climate objectives, which are presented below.

III. 1. From identifying feasible actions to setting emission reduction targets. ✍️

In a nutshell: This approach involves identifying feasible actions and mapping their emission reduction potential to eventually select a few ones to implement. You can then compute by how much the selected actions would reduce your overall emissions. The figure you get is your total emission reduction target, and you can set a target year.

Roll-out: Once you have received your carbon assessment, the ESG team can think of ways to reduce emissions and organize workshops to prioritize emission reduction actions using this methodology. By adding up the respective impacts of selected actions, you get an estimate of the total emission reduction they would result in.You can then decide how quick you want to implement these actions to set a target year and an annual reduction rate.

Pro/cons:

🟢This method is built around achievable targets, making emission reduction goals a practical reality for employees. It provides a good starting point for a climate strategy.

🔴Nevertheless, it can hamper a company’s effort to reduce emissions in the medium to long run. It is also likely to hinder one firm’s alignment with the Paris Agreements.

🫵This is why we rather recommend the second approach to setting a climate target:

III. 2. From setting emission reduction goals to defining necessary actions. 💪

In a nutshell: This approach involves setting a total emission reduction objective before identifying concrete actions to achieve it. It is strongly recommended to use science-based targets rather than setting arbitrary reduction values.

⚠️For the oil and gas sectors: there is no SBTi target that you can use.

Roll-out: The method for setting SBT objectives is presented below.

According to the SBTi, a year-on-year absolute emission reduction of 4.2% (over Scopes 1, 2, 3) is the minimum effort required to align the Paris Agreement's 1.5°C scenario. This cross-sectoral minimum objective is the “SBTi absolute contraction method”.

If you follow the SBTi absolute contraction method, you should define a target year and determine a target year objective by computing 4.2% times the number of years between the base year and the target year.

⚠️For the power sector : only the sector-specific approach should be used.

SBTi only certifies companies setting objectives for an emission reduction trajectory with a maximum duration of 10 years (between the base year and the target date). This also applies to companies aiming for the long term “SBTi Net Zero Certification”.

Even if you do not aim for the SBTi certification, we still recommend you to focus on trying to follow SBTi targets in the short term (3-5 years) as a start.

Pro/cons:

🟢 Setting SBT targets is ambitious! It indicates to other organizations, employees and consumers that your company is at the forefront in the battle against climate change. Furthermore, setting SBTs will align your business with the Paris Agreement objectives.

🔴Long term SBTs can seem out of touch with operational constraints and need to be backed-up with internal awareness and a cohesive action plan. Yet, so far, most companies actually fail to do so according to the NGO Carbon Market Watch.

🫵You can consider setting relative targets to make climate objectives more achievable:

III. 3. Deciding whether to set absolute or relative emission reduction targets.🔎

Whether you set your climate objectives or action plan first, your situation may make you think that it would be fairer/relevant to set emission reduction relative objectives. For instance, if your company experiences significant growth and your absolute emissions seem to be inevitably rising.

Besides, the SBTi sector-specific guidelines actually use “physical intensity” relative targets. Yet, these guidelines only exist for a few sectors as of today. If you haven’t received guidance for your activity sector, you can still set physical intensity objectives while computing their alignment with the yearly 4.2% absolute contraction objective. Exemple : One of our clients in the wine industry decided to measure emissions per bottle of wine produced.

However, if you rather aim to just keep close to the SBT vision, note that some sectors are deemed less legitimate than some others when setting relative targets. Indeed, the SBT have been set at the Paris Agreement based on the vision that each sector should be attributed a maximum quantity of acceptable emissions. This means that sectors experiencing important growth are deemed less legitimate to set relative climate targets, as this might result in a global emission growth.

For instance, a relative climate target for a company operating in the fast fashion industry, a fast growing market, will be regarded as less acceptable than a relative target for a company in the food sector. Yet, there is no strict guideline for this as of today, but that vision is reflected in the SBTi sector-specific guidelines.

Finally, SBTi provides an economic intensity climate objective for all sectors. Nonetheless, its use is less recommended as it is biased by inflation and price changes.

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