Understand Best Practices for Setting Ambitious Goals
Environmental Defense Fund
Setting ambitious emissions reduction targets that go beyond regulatory requirements is a crucial step for your company to take to effectively address climate change. Ambitious goals are necessary because current global commitments are not sufficient to limit global temperature increase within 1.5°C to 2°C of pre-industrial levels. UN Secretary-General António Guterres recently called on global leaders to “fast-track climate efforts by every country and every sector and on every timeframe.”
You should start with a baseline emission inventory. This helps establish a starting point and identifies major sources of emissions, allowing you to prioritize reduction opportunities. By assessing your company’s current emissions profile, you can set targets and determine the level of reduction required to achieve your goals.
Once you have identified your baseline emissions, you should aim to set science-based targets (SBTs) that align with the latest climate science and are consistent with the Paris Agreement’s objective of limiting global temperature increase to below 2°C. This is important so that you align emissions reduction goals with a greater purpose and drive the level of emissions reductions necessary to reduce climate risks on your business, stakeholders, and society at large. After you have set your targets, you will need to design an implementation strategy. This should include not only an analysis of which investments will most efficiently achieve your targets, but also the social justice implications of your interventions.
Here are some additional considerations when setting climate targets:
Additional Target Setting
In addition to setting SBTs, you should consider the following helpful targets to support your corporate sustainability strategy. Remember, these targets should be considered across Scopes 1, 2, and 3.
- Sector-Specific Targets: Your company should consider setting sector-specific targets aligned with the goals of its industry. For example, the Science-Based Targets initiative (SBTi) has developed sector-specific target-setting guidelines for companies in the power, buildings, and transportation sectors. Depending on your sector, you might set targets for specific emissions, such as methane.
- Renewable Energy Targets: Your company should consider setting renewable energy targets to address your Scope 2 emissions. For example, you could set a target aligned to the Clean Energy Buyers Association (CEBA) goal of achieving a 90% decarbonized energy supply by 2030.
- Long-Term Targets: You should set long-term targets that align with the company’s sustainability strategy and vision. These targets can be set for a time frame of 10 to 15 years or longer, and they provide a clear direction for the company’s sustainability efforts. This allows the business to make decisions on capital investments using a longer time horizon and aligns those long-term decisions to the company’s sustainability goals. We recommend that long-term targets include a path to Net Zero emissions if this is not already part of your near-term strategy.
- Short-Term Targets: You should also consider setting short-term targets, which can serve as intermediate steps towards reaching your long-term targets. These short-term targets can help drive action today and keep your company on track to meet its long-term goals.
- Collaborative Targets: You can also collaborate on a pre-competitive basis with other organizations within your industry or supply chain to set joint targets that address shared challenges. Collaborative targets can leverage the collective expertise and resources of multiple organizations to achieve a greater impact.
- Environmental and Climate Justice (ECJ) Targets: Use metrics that are relevant and meaningful to the communities across your value chain to set ECJ targets aligned to your ESG strategy. Consider partnering with local organizations to help you define and execute on these goals. You will want to transparently share your results to demonstrate progress and build trust with the community.
To be successful in achieving ambitious emission reduction targets, it is important to engage your company’s stakeholders including employees, investors, and customers. You can involve stakeholders in the target-setting process, communicate progress towards targets, and solicit feedback and ideas for achieving these targets. Engaging stakeholders can also help build support for your company’s sustainability efforts and improve your company’s reputation and brand.
Additionally, as you move from target setting to implementation, you should consider which stakeholders you should engage with from an equity and social justice lens. For example, new facility investments should be made in consultation with the local community to support their needs and reduce negative impacts to the area.
Setting ambitious targets is not a one-time effort. You should regularly evaluate your sustainability performance to stay on track against the goals you have set. This includes reassessing against the latest national and global targets. This requires regular monitoring and reporting of emissions, tracking progress towards targets, and making adjustments to your implementation strategy as necessary.