Doing good business with a Science-Based Targets initiative
Adopted in 2015 and signed a year later, the Paris Agreement is the most significant international climate treaty of its time. Among the multitudinous measures that the 194 signatories agreed to in the process of ratification were “science-based targets” (SBTi): that nations keep the rise in mean global temperature to 2°C above pre-industrial levels, and preferably down to 1.5°C. Only then, the thinking goes, could the catastrophic effects of climate change possibly be averted.
While the verdict is still out regarding whether or not these promises will be kept (let alone be effective), will they reduce greenhouse gas emissions and future-proof the economy? Companies around the world have also adopted them and integrated these goals into their operations. Cognizant of science, they can be particularly forthright when articulating why they take the science-based targets to heart.
Take the words of Claire Atkins Morris, the Head of Corporate Responsibility for the French food services giant Sodexo: “They are necessary targets if we are to keep 1.5 degrees alive. The science informs us that anything above this will create catastrophic impacts.
“From day one, Sodexo has been focusing on tangible everyday gestures and actions through its services to have a positive economic, social and environmental impact over time. For us, growth and social commitment go hand in hand. Our purpose is to create a better everyday for everyone to build a better life for all. Setting science-based targets ensures our net-zero strategy is aligned with climate science and on a pathway for limiting global warming to 1.5°C above pre-industrial levels.”
Adapting performance to science-based targets is not a static endeavour. As companies’ operations evolve, the amount of carbon emitted or not emitted fluctuates. Management must stay abreast of these changes and factor them into their overall sustainability programme. This process is known as rebaselining; that is, adjusting guidance data to match new sources of emissions.
Morris at Sodexo commented on the importance of following baselines: “To meet our targets is not about mitigation but adaptation. Our total baseline GHG emissions are currently 928,000 tCO2e – this is how much we need to reduce emissions to reach Net Zero. We have reduced this by one third since our 2017 baseline and are on track to meet our near-term science based target.
She then noted the importance of adapting to a changing status quo: “Re-baselining gives a more accurate picture of a company’s carbon footprint, and Sodexo urges other businesses to continuously review their baseline to make sure it’s accurate and relevant for comparing current activities against. We will continue to review our 2017 baseline as we understand and refine our data and methodologies; this feels par for the course with science based targets.”
Of course, there is the argument – on the tips of tongues of all climate change naysayers – that integrating science-based targets into strategy will be a hindrance to success. It is a refrain often heard among those doubters who are hostile to the lessons of science.
Oded Fruchtman, the CEO of solar power company BladeRanger, has a riposte to this view: “Adopting science-based targets as set out in the Paris Climate Agreement may entail some short-term costs for companies, such as investing in new technologies or changing business practices. In the long-term, it is likely that companies that are taking action to reduce greenhouse gas emissions will have an advantage over those that do not. This is because they will be better prepared to comply with future regulations and carbon pricing schemes, and they will also be able to tap into the growing market of low-carbon products and services. Additionally, companies that take steps to reduce their environmental impact may also see benefits such as improved reputation, reduced energy costs, and increased employee engagement.”
The pandemic was a double-edged sword in terms of science-based targets. On the one hand, economic activity across the world took a hit – something that reduced global emissions. But, on the other hand, companies had to cut costs in order to adapt. Achieving science-based targets can be expensive, after all.
At British IT company Logicalis, this experience could be attested to. Said its Head of Responsible Business, Charissa Jaganath: “Sustainability took a back seat during the pandemic as executives shifted focus to innovation and moving their workforce online. Leaders prioritised economising strategically for secure and connected remote working, and many viewed sustainability as a ‘nice to have’ rather than a necessity.”
Ultimately though, maintaining the path of science-based targets and sustainability is simply smart business. As Jaganath maintains: “Environmental, social and governance goals have previously appeared as easy targets, but business leaders must be fully aware of the negative impact on brand reputation if sustainability initiatives are cut. A business’ environmental impact has become a crucial factor in the consumer’s purchasing decisions, with 85% of global consumers reportedly willing to pay more for sustainable alternatives. Never has it been more accessible for a customer to switch between companies and providers.”