The FINANCIAL -- Just 18 months after its launch, the Science Based Targets initiative announced that 200 companies have committed to set emissions reduction targets consistent with the global effort to keep temperatures well below the 2-degree threshold.
In the past year, the initiative has seen a growth rate of over 2 companies per week committing to set science-based targets, far exceeding the project’s timeline and signaling that climate action has gained tremendous momentum in the private sector.
A partnership between CDP, WRI, WWF and the UN Global Compact, the Science Based Targets initiative works with companies to set ambitious emission reduction targets. Businesses who commit have two years to set science-based targets, which are then closely reviewed by the initiative’s team of experts, who only approve those that meet strict criteria. These 200 businesses represent an estimated USD $4.8 trillion in market value, comparable to the total estimated value of the Tokyo stock exchange, and are responsible for 627 million metric tonnes of CO2 equivalent emissions per year, roughly equal to the annual emissions of South Korea, according to the UN Global Compact.
Of the 200 companies, 26 have had their targets approved by the initiative, including Coca Cola Enterprises, Dell, General Mills, Kellogg, NRG Energy, Procter & Gamble, Sony, Thalys and other leading companies. Some of the newly approved targets include:
Walmart, the world’s largest retailer and private-sector employer, commits to reduce absolute scope 1 and 2 emissions 18% by 2025, from 2015 levels. Walmart will also work to reduce CO2e emissions from upstream and downstream scope 3 sources by one billion tons between 2015 and 2030.
Diageo plc, the world’s largest producer of spirits and a major producer of beer, commits to reduce absolute scope 1 and scope 2 emissions 50% by 2020. from 2007 levels. Diageo also commits to reduce its GHG emissions across the total value chain of its products by 30% within the same timeframe.
Verbund AG, Austria’s largest electricity provider, commits to reduce GHG emissions 90% by 2021, from a 2011 base-year (scope 1, scope 2, and scope 3 emissions from fuel-and-energy related activities and business air travel). This is a milestone in the long-term goal to achieve carbon neutrality by 2050.
“Walmart is the first retailer with an emissions-reduction plan approved by the Science Based Targets initiative, in alignment with the Paris Agreement in December 2015,” said Doug McMillon, president and CEO of Walmart. “We want to make sure Walmart is a company that our associates and customers are proud of – and that we are always doing right by them and by the communities they live in. That’s really what these commitments are about. And that’s why we’re so passionate about them.”
Science-based targets are in alignment with a key goal of the 2015 Paris Agreement on climate change, which is to limit the rise of global temperatures to well below 2 degrees C . The agreement entered into force on November 4, with 110 countries representing 76% of global emissions having ratified so far.
“The momentum behind the Science Based Targets initiative proves that companies are ready, willing and able to take serious climate action,” said Lila Karbassi, Chief of Environment at the UN Global Compact. “Now, with the Paris Agreement in force and the 2030 deadline for the Sustainable Development Goals, we urgently need companies everywhere to rise to the climate challenge, set ambitious targets aligned with science and become leaders of the low-carbon economy.”
Companies setting science-based targets must seek to not only reduce emissions in their own operations, but also within their value chain. Measuring and managing these emissions spurs companies to identify reduction opportunities, collaborate with suppliers, move towards greener suppliers, improve energy efficiency of products, and rethink distribution networks. These measures can significantly reduce the overall impact on the climate, and improve the quality and value of a company’s products.
“Business action on climate is more important than ever right now. To really make a difference, however, companies must be more ambitious than they have been so far,” said Cynthia Cummis, WRI’s Director of Private Sector Climate Mitigation. “Setting greenhouse gas targets in line with science sends a strong signal to peer companies that they need to shift their business strategies to embrace a low-carbon future. It’s not just good for the planet, but also good for consumers and the bottom line.”
The 200 committed companies span 33 countries and represent a wide range of sectors, including food and beverage, pharmaceutical, automotive, and electric utilities. Companies that have made a commitment within the last six months include PepsiCo, HSBC Holdings, SunPower Corporation, Cisco Systems, Motorola Solutions, Mediclinic Southern Africa, Capitas Finance Limited, Legrand, Metsä Board Corporation and ADVA Optical Networking.
“The rapid growth of companies—quite diverse in their sectors and geographic locations—aligning their emission targets to the goals adopted in the Paris Agreement is a good sign for business and for the climate. They are setting transformative but achievable science-based targets, signaling to governments that they must also keep pace and adjust their national climate plans,” said Manuel Pulgar-Vidal, leader of WWF International’s Climate and Energy Practice.
The 200th company to commit to setting a science-based target is Mediclinic Southern Africa, an international private hospital group with South African roots.
“For Mediclinic, setting a science-based target makes business sense, we already see direct benefits from emissions reduction efforts through cost savings and energy supply security,” said Francois Bester, the company’s environmental systems manager. “More than that, it is part of our business culture to take responsibility for health beyond the walls of our hospitals. We believe we have a responsibility to ensure that people live healthy lives in a healthy environment and that is why we are committed to setting a science-based emission reduction target.”
A recent report by CDP in partnership with We Mean Business found that although the large majority of companies have set targets to reduce emissions, in many cases the level of ambition and time horizon fall short of what is needed for business to deliver on the goals of the Paris Agreement.
“We have seen a significant increase in the number of companies committing to set science-based targets since the Paris agreement. This demonstrates that many major companies are preparing to adapt their business plans to be consistent with a two degree pathway and drive the transition to the low-carbon economy. They are making this commitment because they realize the business benefits of doing so: reducing risk, building resilience and positioning themselves to unlock great opportunities,” said Paul Simpson, CEO of CDP, formerly the Carbon Disclosure Project. “We need to build on this momentum and bring the rest of the business world on board. With the private sector responsible for up to 70% of global emissions, it is critical that they act now to prevent the most dangerous effects of climate change.”