Breaking down the Science Based Targets jargon (Scope 1&2 focus)

When you set Science Based Targets there are four key elements to the target. This primer will break down the main concepts you need to know for setting Scope 1 & 2 targets.
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Where do I start?

When you set Science Based Targets there are four key elements to the target. These are:
  • Target Type
  • Timeframe
  • Measurement Method
  • Reduction Goal (i.e. level of decarbonisation)

Throughout this process, the Science Based Targets initiative use a lot of climate jargon that can get rather confusing. In this article, we breakdown the main concepts you need to know for setting Scope 1 and 2 targets.

1. Target Type

When setting Scope 1 and 2 targets, there are two "types" of target you can set:

  • Scope 1+2: This is where you set an overall target reduction in emissions for your emissions categorised in Scopes 1 and 2. For example, Company X commits to reducing emissions across Scopes 1 and 2 by 80%.

  • Scope 1+100% Renewable Energy: This is where you set two sub targets, a reduction goal for Scope 1 and a commitment to 100% renewable energy. This is equivalent to setting a reduction goal for Scope 1 and committing to a 100% reduction in Scope 2 emission, as renewable energy does not produce any greenhouse gas emissions.
When making this decision, key things to consider are:
  1. How ambitious do I want to be? Setting a 100% renewable energy goal is naturally slightly more ambitious than an SBT aligned Scope 1 and 2 goal as it is equivalent to 100% emissions reduction in Scope 2.

  2. How feasible is renewable energy? In many European and North American countries, purchasing renewable energy contracts and being able to prove the source of that energy is a mature solution. However, in many other countries this infrastructure is still in it's infancy and therefore achieving a 100% renewable energy goal may depend on your business generating it's own energy. Outlining a high level roadmap to assess feasibility is a valuable consideration at this point.

  3. What engages my customers and employees? One benefit of the 100% renewable energy goal is that it is very tangible compared to abstract Scope 1 and 2 targets, therefore some businesses have chosen this option due to the secondary benefits from a communication standpoint.

2. Timeframe

When considering timeframes in SBTs, there are two key concepts to breakdown:

  • Long Term vs. Near Term targets: In this process, your business is always setting Near Term targets. The SBTi has recently announced Long Term targets that align to ongoing decarbonisation towards 2050, however most businesses today are first setting Near Term targets, and then considering Long Term and Net Zero add ons.

  • Length: For medium term targets, businesses can set a target anywhere between 5 and 15 years after their Base Year. Your Base Year is defined as the first year where you have a comparable GHG Baseline to the current year. Therefore, if my first GHG Baseline was completed in 2020, I could choose to set my medium-term targets anywhere between 2025 and 2035.
When making this decision, what should I consider?
  1. When can we start decarbonising? The right answer is always now, but for many businesses it may take 12-18 months to get a roadmap and budget signed off to achieve key decarbonisation initiatives. Therefore, most large businesses are setting targets between 10-15 years to allow time for delivery.

  2. How technology will change your ability to decarbonise?
  • In some industries many abatement initiatives already exist, for example, in fashion the abatement opportunities through business model change (e.g. to rental) or in product design (e.g. new material choices) are already large and cost effective.
  • Whereas in other industries, the next decade could see a large change in the cost of abatement technologies, for example the roll out of electric farming equipment is only just beginning and highly expensive, but this is expected to change rapidly.
  • Therefore, assessing the opportunities that already exist vs. the timeline for new opportunities should be a key consideration when setting timeframes.

3. Measurement Method

A measurement method is the calculation formula that is applied to calculate

  • The level of decarbonisation needed to align to 1.5C warming
  • How your business is performing compared to it's base year (once targets have been set).
For Scope 1 and 2 targets, there are two measurement methods that could be used:
  1. Absolute Contraction Approach (ACA): This measures the level of decarbonisation needed based on the yearly global requirement to decarbonise and maintain less than 1.5C warming. This approach can be used by all businesses. Under current standards, businesses must decarbonise their own emissions (Scopes 1 and 2) by 4.2% each year to align to this approach.

  2. Sectoral Decarbonisation Approach (SDA): This measures the level of decarbonisation needed based on industry decarbonisation models built by the Science Based Targets initiative. This approach is only available for some industries, the most prominent of which is the Utilities sector. The sectors where the SDA can be used typically need to decarbonise their operations quicker than most other industries, due to the secondary effect of their operations, and so industry specific pathways were constructed.
In the Altruistiq Platform we currently only support the ACA due to our customer base. Our roadmap includes roll out of SDA approaches in the future.
Finally, there are more measurement methods available for Scope 3 targets. However, these will be covered in a separate article.

4. Reduction Goal

This is just the percentage reduction in emissions that will be achieved by the time your target matures. Under the Absolute Contraction Approach, this is an absolute reduction in emissions compared to the base year.It should be noted that the Altruistiq Platform will not allow you to set a reduction goal that does not allow you to meet the SBT's minimum ambition level (aligned to 1.5C warming). However, you can choose to set a more ambitious goal if desired.

Bringing it Together

Overall then, there are 4 key elements to a Scope 1 and 2 SBT that you need to understand. What does this look like in practice? Hopefully, the below image will help!

Have further questions?