There is justified wariness when corporations make bold emissions reduction commitments: targets are easy to announce, pledges are a dime-a-dozen, and effective action is difficult to assess. The Science Based Targets Initiative (SBTi) is trying to sort the talk from the action.
The organization gives companies a process to make meaningful, and measurable, emissions reduction targets rooted in climate science. It’s a collaboration between CDP, the UN Global Compact, World Resources Institute, and the World Wide Fund for Nature.
As of Jan. 20, there are 2,392 corporations across a range of industries that have made science-backed emissions reductions commitments with SBTi. Of those, 1,124 have targets that have been fully vetted and approved by the organization. The other 1,268 are waiting for validation.
The validation process is rigorous. SBTi doesn’t allow for the companies to buy their way out of climate responsibility.
“The SBTi requires companies to set targets based on emission reductions through direct action within their own operations” explained Heidi Huusko, SBTi’s top UN representative. Buying offsets or helping reduce emissions at unrelated organizations don’t count.
Of the 1,084 vetted companies, some are more ambitious than others. A group of 243 have committed to set science-based targets to reach net-zero emissions before 2050, on top of having approved reduction targets in line with limiting global temperatures to 1.5ºC higher than pre-industrial levels. These companies include some well-known names: Microsoft, Walmart, and IKEA.
There are three categories of corporate emission reductions:
Companies have the most control over their scope 1 and 2 emissions. For most, scope 3 emissions are the most difficult for an organization to measure and reduce. But scope 3 emissions typically make up the majority of a company’s carbon footprint. For example, online retailer Etsy’s public CDP disclosure of its reduction targets declares its 2019 scope 1 and 2 emissions to be 1,023 metric tons CO2e. Its scope 3 emissions that year were 152 times larger.
We’ve gathered data on those 243 companies on the cutting edge of cutting emissions, via SBTi itself and by scouring disclosure reports on their partner site, CDP. On top of having approved reduction targets, each of these companies has a net-zero commitment. That means they’re planning to set goals to cut almost all emissions across all scopes by 2050 (offsets are allowed to count against the last few percentage points once the company has eliminated everything else).
But 2050 is decades away, and companies need to start acting now. So, the SBTi requires near-term targets along that path to zero.
We’ve visualized their near-term targets for scope 1 and scope 2 emission, below. Though their target years vary, all companies plan to make their reductions before 2035.
These data provide a starting point for understanding and comparing corporate ambition. However, we’re far from having a simple way to judge companies on equal terms. The particulars of each firm’s net-zero commitments vary. Even in this ambitious group of companies, some:
- hide their current emissions
- have set single targets while others have set dozens
- have not given early scope 3 targets (SBTi only requires targets to cover scope 3 if it is more than 40% of the company’s total emissions)
- have set targets that rely not on absolute emissions reductions, but on intensities, which describes emissions per unit of a company’s product, and can, in some cases, provide loopholes to get around reducing absolute emissions.
Many of these targets have only been validated recently, so it’s difficult to judge whether companies are keeping up with their commitments. Yet, the data show “that companies who have set targets with the SBTi are well on their way to achieving them,” Huusko said. SBTi’s 2020 progress report found that companies with approved targets at the time reduced their emissions by 25% between 2015 and 2019.
The organization is planning to publish another progress report in 2022 along with a new reporting and verification framework for companies.
There is no financial penalty for companies that don’t disclose their progress or realize their commitments. SBTi will remove companies that don’t follow up from the initiative.
Huusko hopes signing on will soon become the new normal for companies, noting, “It took nearly 4 years to reach 500 companies taking action, but only about 4 months to increase from 1,500 companies to 2,000.”
With assistance from Tim McDonnell.
This article was updated to clarify that most of the companies have not yet set net-zero targets, but have made commitments to do so.