提高标准：探索科学碳目标倡议在推动气候行动方面的进展（英）-SBTiVIP专享VIP免费

下载本文档

阅读 398
格式 pdf
大小 1.6 MB
约42页
2023-04-18
收藏
点赞(0)
海报
举报

Exploring the Science Based Targets initiative's

progress in driving ambitious climate action

Raising the Bar

Foreword

As the SBTi embarks on its next chapter, let us celebrate how far this movement has

come and renew our focus on driving transformative climate action from the private

sector.

When the Science Based Targets initiative (SBTi) was launched in 2015 our goal was

clear: for companies across the globe to set targets to reduce their greenhouse gas

(GHG) emissions according to what science showed was needed to avert dangerous

climate change. A simple idea, but also a step-change in how companies thought

about climate action.

Since then, many of the world’s largest companies have responded to this call to

action. As of November 2019, more than 700 companies are setting science-based

GHG emissions reduction targets - and many more are joining the movement every

week.

These companies represent 45 sectors—from chemicals to construction, and

from textiles to telecom, spanning 46 countries around the globe. Together, their

operational emissions total more than 1 billion tonnes of CO2e, more than the annual

emissions of Germany. Their combined market capitalisation is over $10 trillion USD.

They are at the vanguard in the ght against climate change and are demonstrating

to decision-makers in governments, nancial markets, and the private sector that

operating within the scientic threshold for a climate-safe world goes hand-in-hand

with a successful business and economy.

A edgling initiative has snowballed into a global movement.

As a uniquely collaborative endeavour, the SBTi has had remarkable success in

driving ambitious, science-based climate action in the private sector. The initiative

has evolved, learning and adapting in the process to better serve its purpose. Yet, we

are still only at the beginning of this journey and much remains to be done.

This report takes stock of the progress the SBTi has made since its launch and

explores its impact across the globe. The report also analyses where progress is

uneven and where additional eorts are necessary to drive the level of ambition and

action we understand is necessary from the private sector to meet the goals of the

Paris Agreement.

For the highest emitting sectors, the steps they must take are nothing short of

transformative. However, ambition and innovation are the backbone of any successful

business, and some of the world’s highest emitters are proving that they are more

than up to the challenge.

Lila Karbassi

Chief of Programmes

UN Global Impact

Manuel Pulgar-Vidal

Leader Climate & Energy

WWF International

Andrew Steer

President & CEO

World Resources Institute

Paul Simpson

CEO

CDP

Nigel Topping

CEO

WE MEAN BUSINESS

The SBTi Executive Board

Foreword 1

Summary 3

Introduction 4

About the Science Based Targets initiative 6

Progress to date 7

Create a critical mass of companies with SBTs 9

Analysis of approved targets 10

Geographical analysis 11

Sectoral analysis 14

Adoption of SBTs in key sectors 15

Remove technical barriers for the adoption of SBTs 16

Institutionalise the adoption of science-based targets 17

Impact of the initiative 18

Ambition breeds ambition

Some leading companies have already met their science-

based targets 21

The heavy lifting

How heavy industry is implementing science-based targets 24

Clearing the highest bar

How companies are setting targets to keep global warming

below 1.5°C 28

Cascading ambition

How leading companies are cutting emissions in their value

chain 31

Creating an ambition loop

How the private sector can enhance national climate action,

and vice versa 34

Shifting investment ows to align with Paris

How investors are using science-based targets to help

decarbonise their portfolios 36

Next steps for the initiative 39

Table of contents

/42

下载本文档

文本预览下载提示常见问题

1ExploringtheScienceBasedTargetsinitiative'sprogressindrivingambitiousclimateactionRaisingtheBar1ForewordAstheSBTiembarksonitsnextchapter,letuscelebratehowfarthismovementhascomeandrenewourfocusondrivingtransformativeclimateactionfromtheprivatesector.WhentheScienceBasedTargetsinitiative(SBTi)waslaunchedin2015ourgoalwasclear:forcompaniesacrosstheglobetosettargetstoreducetheirgreenhousegas(GHG)emissionsaccordingtowhatscienceshowedwasneededtoavertdangerousclimatechange.Asimpleidea,butalsoastep-changeinhowcompaniesthoughtaboutclimateaction.Sincethen,manyoftheworld’slargestcompanieshaverespondedtothiscalltoaction.AsofNovember2019,morethan700companiesaresettingscience-basedGHGemissionsreductiontargets-andmanymorearejoiningthemovementeveryweek.Thesecompaniesrepresent45sectors—fromchemicalstoconstruction,andfromtextilestotelecom,spanning46countriesaroundtheglobe.Together,theiroperationalemissionstotalmorethan1billiontonnesofCO2e,morethantheannualemissionsofGermany.Theircombinedmarketcapitalisationisover$10trillionUSD.Theyareatthevanguardinthefightagainstclimatechangeandaredemonstratingtodecision-makersingovernments,financialmarkets,andtheprivatesectorthatoperatingwithinthescientificthresholdforaclimate-safeworldgoeshand-in-handwithasuccessfulbusinessandeconomy.Afledglinginitiativehassnowballedintoaglobalmovement.Asauniquelycollaborativeendeavour,theSBTihashadremarkablesuccessindrivingambitious,science-basedclimateactionintheprivatesector.Theinitiativehasevolved,learningandadaptingintheprocesstobetterserveitspurpose.Yet,wearestillonlyatthebeginningofthisjourneyandmuchremainstobedone.ThisreporttakesstockoftheprogresstheSBTihasmadesinceitslaunchandexploresitsimpactacrosstheglobe.ThereportalsoanalyseswhereprogressisunevenandwhereadditionaleffortsarenecessarytodrivethelevelofambitionandactionweunderstandisnecessaryfromtheprivatesectortomeetthegoalsoftheParisAgreement.Forthehighestemittingsectors,thestepstheymusttakearenothingshortoftransformative.However,ambitionandinnovationarethebackboneofanysuccessfulbusiness,andsomeoftheworld’shighestemittersareprovingthattheyaremorethanuptothechallenge.LilaKarbassiChiefofProgrammesUNGlobalImpactManuelPulgar-VidalLeaderClimate&EnergyWWFInternationalAndrewSteerPresident&CEOWorldResourcesInstitutePaulSimpsonCEOCDPNigelToppingCEOWEMEANBUSINESSTheSBTiExecutiveBoard2Foreword1Summary3Introduction4AbouttheScienceBasedTargetsinitiative6Progresstodate7CreateacriticalmassofcompanieswithSBTs9Analysisofapprovedtargets10Geographicalanalysis11Sectoralanalysis14AdoptionofSBTsinkeysectors15RemovetechnicalbarriersfortheadoptionofSBTs16Institutionalisetheadoptionofscience-basedtargets17Impactoftheinitiative18AmbitionbreedsambitionSomeleadingcompanieshavealreadymettheirscience-basedtargets21TheheavyliftingHowheavyindustryisimplementingscience-basedtargets24ClearingthehighestbarHowcompaniesaresettingtargetstokeepglobalwarmingbelow1.5°C28CascadingambitionHowleadingcompaniesarecuttingemissionsintheirvaluechain31CreatinganambitionloopHowtheprivatesectorcanenhancenationalclimateaction,andviceversa34ShiftinginvestmentflowstoalignwithParisHowinvestorsareusingscience-basedtargetstohelpdecarbonisetheirportfolios36Nextstepsfortheinitiative39Tableofcontents3TheScienceBasedTargetsinitiative(SBTi)drivesambitiousclimateactionbymobilisingcompaniestosetscience-basedtargets(SBTs),GHGreductiontargetsthatarealignedwithwhatclimatesciencetellsusisrequiredtomeetthegoalsoftheParisAgreement.Sinceitslaunchin2015,theSBTihasmadesignificantprogressagainstitsgoalofmakingscience-basedtargetsettingstandardbusinesspractice.StronggrowthinadoptionofSBTsAsofOctober31st2019,686companieshavepubliclyjoinedtheSBTiand285ofthesehavehadtheirtargetsofficiallyapproved.Notably,thepaceatwhichcompaniesjointheinitiativehasdoubledoverthepast18months,with352companies,(19permonth),joiningbetweenApril2018andOctober2019,comparedto334companies,(9permonth),intheprevious36monthsbetweenApril2015andMarch2018.ThegrowingmomentumisevenmorepronouncedinthenumberofcompaniesthathavehadtheirtargetsapprovedbytheSBTi,drivenbycompaniesturningtheircommitmentsintoapprovedtargets.Inthe18monthsbetweenApril2018andOctober2019,thetargetsof195companieswereapproved,comparedto90inthethreeyearsbefore.SeveraldevelopedeconomiesandsectorslikefoodandbeveragearealreadyseeingacriticalmassofcompaniessettingSBTs,whilefirst-movercompaniesindevelopingeconomiesandsectorslikeheavyindustryandautomotiveareyettobejoinedbytheirpeers.EvolutionofclimatescienceandtechnicalresourcesWithclimatescienceevolvingandtheurgencyofambitiousclimateactionbecomingeverclearer,therenowisevengreatertransparencyontheambitionofcompanies’GHGreductiontargets.MorethanaquarterofthetargetsapprovedbytheSBTiarealreadyalignedwithlimitingglobaltemperatureincreaseto1.5°C.Thesecompaniesarejoinedbyothersthathavepledgedtofollowtheirexample.Over100companieshavenowjoinedthe‘BusinessAmbitionfor1.5°C’campaignandcommittedtoset1.5°C-alignedclimatetargetsacrosstheiroperationsandvaluechains.Keepingabreastwithitsgrowingmomentum,theSBTihassignificantlyupdatedandimproveditstarget-settingresourcesandsupporttocompanies.Companiesnowreceiveadetailedresponsewithin30businessdaysofsubmittingtargetstotheSBTiandimprovedclarityonmethodsandcriteriahaveledto80%ofsubmissionsoverthepast9monthsresultinginapprovals.SBTsarebecomingasharedlanguageThetrendtowardsabroaderadoptionofSBTsiscatalysingtheinstitutionalisationofSBTsasasharedlanguageforclimateambitionamongstcompaniesandtheirstakeholders.Financialmarkets,drivenbyagrowingawarenessfortheenormousfinancialrisksassociatedwithclimatechange,areusingSBTstoguideinvestmentandlendingdecisions.RegulatorsfacedwiththetaskofdecarbonisingtheeconomyarebothencouragingandrespondingtotheambitioncompaniesaredemonstratingbysettingSBTs.Andover92%ofcompanieswithapprovedSBTshavesetambitiousvaluechain(scope3)emissionstargets,therebycascadingtheirambitiontosuppliersandcustomers.CompaniesaredrivingambitiousclimateactionCompaniesthathavesetSBTswillmakesignificantcontributionstoglobalclimategoals:SummarySBTscover752milliontonnesCO2eofannualscope1and2emissions,equivalenttotheannualemissionsof193coalfiredpowerplantsWhenallscope1and2targetsaremet,annualemissionswillhavebeenreducedby35%fromthebaseyear,or265milliontonnesCO2e,equivalenttoshuttingdown68coalfiredpowerplantsMeetingallscope1and2targetswilldriveupto$18billionofinvestmentintomitigationactivitiesAmbitiousscope3targetsapprovedbytheSBTicover3.9billiontonnesCO2e,equivalenttotheannualemissionsofover828millioncarsMeetingalltargetsapprovedbytheSBTiwilldriveupto90TWhofannualrenewableelectricitygeneration,enoughtopower11millionhouseholds.4Havinganetworkofbusinessleadersthatarecommittedtoscience-basedtargetsinlinewiththeParisAgreementcreatesincredibleleverageandtheopportunitytoapplyinternationalbestpracticetodramaticallyreducetheiremissions.-JacindaArdern(PrimeMinisterofNewZealand)INTRODUCTION""5meetingtheParisgoalswithoutholdingbusinessesaccountablefortheirimpactandharnessingtheirstrengthstodeliverthescaleandpaceofchangerequired.Manybusinessleadersarewakinguptotherisksandopportunitiesrelatedtoclimatechangeandtheacceleratinglow-carbontransition,andarelookingforrobusttoolstofuture-prooftheirgrowth.3Recognisingthepivotalrolebusinessesmustplayinthedecarbonisationoftheglobaleconomy,andtheneedtoprovidethemwithcrediblesupportinunderstandingwhatthismeansinpractice,theScienceBasedTargetsinitiative(SBTi)waslaunchedin2015topromotethewide-spreadadoptionof“Science-BasedTargets”(SBTs)—corporateGHGreductiontargetsthatarealignedwithwhatclimatesciencetellsusisrequiredtomeetthegoalssetoutintheParisAgreement.Thisreportdrawsoncorporateemissionsandtargetdata4submittedtotheSBTiandCDP—aswellasextensiveinterviewswithbusinessesandotherstakeholders—toexploretheprogresstheSBTihasmadeindrivingtheadoptionofSBTsbybusinessesandtheimpactthishasondecarbonisingtheeconomy.Stoppingclimatechangeisthedefiningchallengeofourtime.Whilethereispoliticalandscientificconsensusonwhatisneeded,thecurrentambitionofglobaleffortsfallsshort.WiththeadoptionoftheParisAgreementin2015,theworld’sgovernmentsmadeastrong,collectivecommitmenttoavoidtheworstimpactsofclimatechange“bykeepingaglobaltemperaturerisethiscenturywellbelow2degreesCelsiusabovepre-industriallevelsandtopursueeffortstolimitthetemperatureincreaseevenfurtherto1.5degreesCelsius.”Notlongafter,theIPCC’sSpecialReportonGlobalWarmingof1.5°C,1publishedin2018,spelledoutthedramaticandfar-reachingimpactsonhumansandnaturethateven1.5°Cofglobalwarmingwouldbring,highlightingtheimportanceoflimitingglobalwarmingtothiscriticalthreshold.Alongsidethissoberingassessmentoftheimpactofclimatechange,thereportsentastrongmessageofurgencyforglobalclimateaction,butalsogaveareasonforoptimism:wecanstillmeetthe1.5°Cgoaliftheworldactsswiftlyanddecisively,halvingglobalemissionsby2030andreachingnet-zeroemissionsbythemiddleofthecentury.Yet,theworldremainsfaroff-trackfromreachingthegoalsoftheParisAgreementwhileambitiousclimateactionissimultaneouslyintegraltotheachievementofthe17UNSustainableDevelopmentGoals.Globalannualgreenhousegas(GHG)emissionscontinuetoincreaseandthecombinedGHGreductionsfromcurrentnationalclimatetargetsandnon-stateactorsputusontracktoover3.0°Cofglobalwarmingbytheendofthecentury2–alevelofwarmingthatwouldhavecatastrophicconsequencesforcommunitiesandecosystemsacrosstheglobe.Inshort,whileclimatescienceclearlyspellsoutthescaleofactionthatisrequired,wearefacingadramaticgapofambition.Closingthisgapandenablingthetransitiontowardsaneconomythatgeneratesnet-zeroemissionswillrequiredeterminedactionbyabroadrangeofstakeholders,includingnationalandsub-nationalgovernments,businesses,financialinstitutionsandcivilsociety.Inthiscontext,theroleofthebusinesssectoriscritical.Businesseshavecontroloverthemajorityofglobalemissionsaswellasauniquecapacitytodevelopandrapidlydeployinnovativesolutionsatscale.Thereisnopathwayto1IPCC,2018:Globalwarmingof1.5°C2ClimateActionTracker3Tounderstandmoreaboutthemanybusinessbenefitsofsettingscience-basedtargets,pleaserefertotheSBTiwebsite4AlldataandfiguresinthisreportarecurrentasofOctober31st2019IntroductionWhatisa‘science-basedtarget’?TargetsadoptedbycompaniestoreduceGHGemissionsareconsidered“science-based”iftheyareinlinewithwhatthelatestclimatesciencesaysisnecessarytomeetthegoalsoftheParisAgreement–tolimitglobalwarmingtowell-below2°Cabovepre-industriallevelsandpursueeffortstolimitwarmingto1.5°C.Science-basedtargetsprovidecompanieswithaclearlydefinedpathwaytofuture-proofgrowthbyspecifyinghowmuchandhowquicklytheyneedtoreducetheirgreenhousegas(GHG)emissions.6TheScienceBasedTargetsinitiative(SBTi)mobilisescompaniestosetscience-basedtargetsandbooststheircompetitiveadvantageinthetransitiontoalow-carboneconomy.ItisacollaborationbetweenCDP,theUnitedNationsGlobalCompact,WorldResourcesInstitute(WRI),andtheWorldWideFundforNature(WWF),andisoneoftheWeMeanBusinesscoalitioncommitments.5WhileagrowingnumberofbusinessesaremeasuringandreportingtheirGHGemissions,andmanyaresettingGHGreductiontargets,thosethathavesetthemalignedwithclimatesciencehavebeenaminority.TheSBTi’svisionistomakescience-basedtargetsettingstandardbusinesspractice.Inpursuitofthisvision,theSBTifollowsatheoryofchangedrawingonDiffusionofInnovationtheory6i.e.buildinga‘criticalmass’ofcompaniesadoptingSBTstoreachatippingpointwhichisfollowedbytherapidadoptionofSBTsbythemainstreamofcompanies-SBTsbecomestandardbusinesspractice.7IntheSBTi’stheoryofchangethesethreepillarsreinforceeachothertodrivethemainstreamingofSBTs.LoweringthetransactioncostsofsettingSBTsbyremovingtechnicalbarriersisanessentialenablerforbothbuildingacriticalmassofcompanieswithSBTsandthesubsequentadoptionofSBTsbythemajorityofcompanies.Likewise,asacriticalmassofcompaniesadoptsSBTs,thelearningsfromalargerandbroaderuserbaseenhancesunderstandingofthebarrierstoadoptionandwaystoovercomethem.ThisenablestheSBTitocontinuouslyimprovethesupportitprovidestocompanies.AcriticalmassofcompaniesalsoenablestheinstitutionalisationofSBTs.Withtheirgrowingadoption,SBTsarebecomingapowerfultoolforinvestors,regulators,andbusinessesacrosssupplychainslookingtojudgetherobustnessofacompany’sclimatecommitments.AstheseactorsinturnincludeSBTsintotheirstrategiesandframeworks,networkeffectstakeholdthatfurtherdrivetheuptakeofSBTsbycompanies.ThisinstitutionalisationofSBTscreatesasharedlanguageforclimateambitionamongstallrelevantactorswhichfurtherreducesthebarrierstoadoptionofSBTsandenablestheadoptionofSBTsbythemajorityofcompanies.ThefollowingsectionwillexploretheprogresstheSBTihasmadeagainstthesestrategicobjectives.5PleaserefertotheSBTi’swebsiteforfurtherdetailsonitsgovernance:https://sciencebasedtargets.org/governance/6ROGERS,E.M.(2003).Diffusionofinnovations.NewYork,FreePress.7Empiricalanalysisofthediffusionofinnovationsinsocialsystemsindicatesthattheadoptionofaninnovationby10-25%ofsystemmembers(the‘criticalmass’)isfollowedbyrapidadoptionbytheremainingmembers.TheSBTiassumesthethresholdfora‘criticalmass’withinagivensectororgeographytobe20%ofcompanies.AbouttheScienceBasedTargetsinitiativeRemovetechnicalbarriersfortheadoptionofscience-basedtargetsbytranslatingclimatescienceandemissionscenariosintoaccessibleandactionabletarget-settingmethods,tools,andguidance.Createacriticalmassofcompanieswithscience-basedtargetsbyengagingbusinessesandprovidinganindependentandobjectiveassessmentof,andvisibilityfor,corporatetargetsthatrepresentbestpracticeintarget-settingandalignwiththegoalsoftheParisAgreement.Institutionalisetheadoptionofscience-basedtargetsbyembeddingtheminandamplifyingthemthroughvaluechains,financialmarkets,reportingframeworksandregulatoryframeworks.TheSBTi’sstrategytorealisethistheoryofchangehasthreekeypillars:7Itisencouragingtoseeglobalcompaniessettingscience-basedtargetsinlinewiththeParisAgreement.Thescienceisclear:currentlevelsofambitionareinsufficientandbusinesseshavearoletoplayinlimitingtemperatureriseto1.5°C.-PatriciaEspinosa(ExecutiveSecretary,UNFCCC)""PROGRESSTODATE8ProgresstodateGrowthinnumberofcompaniessettingSBTs9CreateacriticalmassofcompanieswithSBTsSinceitslaunch,theSBTihasbeendrivingtheadoptionofSBTsbycompaniesthroughitsCalltoActioncampaign.CompaniescanmakeapubliccommitmenttosettinganSBT,afterwhichtheyhavetwoyearstodeveloptheirtargetsandhavethemofficiallyapprovedbytheSBTi.8TheadoptionofSBTsbycompaniesismakingstrongprogressandseeingacceleratingmomentum.AsofOctober31st2019,TheIntergovernmentalPanelonClimateChange’s(IPCC)landmarkSpecialReporton1.5°CpublishedinOctober2018clearlyspelledouttheimperativeofraisingambitionandlimitingglobaltemperatureriseto1.5°C.IntheleaduptotheUNSecretary-General’sClimateActionSummitinSeptember2019,theSBTilaunchedanewcampaign—“BusinessAmbitionfor1.5°C:OurOnlyFuture”—togetherwithaglobalnetworkofUNagencies,businessorganisationsandindustrypartners.Thecampaigncallsoncompaniestostepupandcommittosettingscience-basedtargetsalignedwithlimitingglobaltemperatureriseto1.5°Cabovepre-industriallevelsandreachingnet-zeroemissionsbynolaterthan2050.Todate,over100companies,representingover4.2millionemployeesfrom33sectorsandheadquarteredin29countrieshaverespondedtothiscall-to-action.Theyhavecommittedtoset1.5°C-alignedclimatetargetsacrosstheiroperationsandvaluechains,makingthisthemostambitiouslevelofactioncalledforbytheSBTito-date..AsasignificantprivatesectoroutcomeoftheUNClimateActionSummit2019—andcomplementtotheenhancementoftheNationallyDeterminedContributions(NDCs)bygovernments—thecampaignhelpedfurtherinstitutionalisescience-basedtargetsasameansofhowcompaniesarecontributingtotheclimateagendawithintheUnitedNations.Leadershipfromtheprivatesectorremainscriticalinthepivotaltimeforglobalclimateactionandweinvitecompaniestojoinusintacklingtheclimatecrisis.8FormoredetailsonhowcompaniescansetSBTsundertheCalltoActioncampaign,pleaserefertothestep-by-stepguideontheSBTi’swebsite.9Acomprehensive,up-to-datelistofcompaniesthathavejoinedtheSBTicanbefoundontheCompaniesTakingActionpageoftheSBTiwebsite.10PleaserefertotheSBTi’sProtocolforexpiredcommitmentsonitswebsiteforfurtherdetailsaroundthis.686companieshavepubliclyjoinedtheSBTiand285ofthesehavehadtheirtargetsofficiallyapproved.9CompaniesthatexceedthecommitmentperiodaresubjecttoremovalfromtheSBTiwebsite.10Overthepast18months,thishasbeenthecasefor43companies.TherateofcompaniesjoiningtheSBTihasconsistentlyacceleratedsinceitslaunch.ThenumberofcompaniesthathavejoinedtheSBTihasmorethandoubledoverthepast18monthswith352companies,(19permonth),joiningbetweenApril2018andOctober2019,comparedto334companies,(9permonth),intheprevious36monthsbetweenApril2015andMarch2018.Theaccelerationisevenmorepronouncedfortheincreaseinapprovedtargets,where195targetswereapprovedbetweenApril2018andOctober2019,comparedto90inthethreeyearsbefore.Whilethenumbersofcommitmentsandapprovedtargetscontinuetoaccelerate,wearealsoseeingarobustrateofconversionsofcompanies’commitmentstoapprovedtargets.Ofthe285approvedtargets,168wereapprovedwithintwoyearsofthecommitmentbeingmade,and47companieschosetomaketheirapprovedtargetspublicwithoutpreviouslymakingapubliccommitment.Seventycompanieshavetakenlongerthanthestandard2-yearcommitmentperiodtohavetheirtargetsapproved10AnalysisofapprovedtargetsNotes:Theanalysisofscope1and2targetsisbasedon285companies’approvedtargets.Theanalysisofscope3targetsisbasedon262companies’approvedtargets.TheSBTiprovidesresourcesforcompaniestosetscope1and2targetsagainstdifferenttemperaturegoals,wherelimitingglobalwarmingto1.5°Cpresentsthehighestlevelofambition.Forfurtherinformationonhowtargetsareclassifiedagainstthesetemperaturegoals,pleaserefertotheSBTi’sTargetValidationProtocol.TheGHGProtocolaccountingstandardsdifferentiationemissionsby‘scopes’.Scope1and2emissionsareemissionsfromacompany’soperations,mostlyrelatedtoenergyuseandprocessemissions.Scope3emissionsareallindirectemissionsthatoccurinthevaluechainofthereportingcompany,includingbothupstreamanddownstreamemissions.TheSBTihasdifferentcriteriafordifferentemissionscopes,requiringcompaniestoset‘science-based’targetsforscope1and2emissionsand‘ambitious’targetsforscope3.Forfurtherinformationontheserequirements,pleaserefertotheSBTi’scriteria.AbsolutetargetsaretargetssetfortheabsoluteamountofGHGemissionsacompanyemitsintotheatmosphere.IntensitytargetsaretargetssetfortheamountofGHGemissionsacompanyemitsintotheatmosphererelativetoanactivity,e.g.emissionspertonofproductproduced.TargetyearsandemissionscoveredofallapprovedtargetsEmissionscoveredbytargetsScope1&2targetsScope3targets(76%)11GeographicalanalysisGeographicdistributionofcompaniesthataresettingSBTs(committedtoorwithtargets)12TheSBTihasbecomeaglobalmovement,withcompaniesfrom46differentcountriescommittedtosettingSBTs.However,beneaththeoverallglobalmomentumliestarkregionaldifferencesintheadoptionofSBTs.ManydevelopedeconomieshaveseenaremarkablenumberofcompaniesjointheSBTi.131companiesheadquarteredintheUSAhavecommittedtotheSBTi,56ofwhichhavealreadyhadtheirtargetsapproved.NotfarbehindisJapan,with85totalcompaniesand52approvedtargets.Finally,318companiesheadquarteredinEuropehavejoinedtheSBTi,and145havealreadyhadtheirtargetsapproved.Encouragingly,notablehotspotswithinEuropeareitslargesteconomies,Germany,theUK,andFrance.SeverallargedevelopedeconomiesareclosetooralreadyhaveacriticalmassofcompaniesjoiningtheSBTi.Thissuccessindevelopedeconomiescontrastsstarklywiththesituationinmostde-velopingeconomies.Only15%ofcommitments,and6%ofapprovedtargetsarefromcompaniesinnon-OECDcountries.Thisincludestheheaviestemittingemergingmar-kets,whichcountasmallnumberofcompanieswithapprovedtargetsamongthem.AnotableexceptionisIndia,where37companieshavejoinedtheSBTi,andagrowingnumberofcompaniesarehavingtheirtargetsapproved,ninetodate.GeographicalanalysisGeographicdistributionofcompanieswithapprovedtargets13GeographicalanalysisNotes:InlinewiththeSBTi’sTheoryofChangeexplainedintheintroductionofthisreportthisanalysistracksinwhichcountriesacriticalmass(i.e.20%)ofcompaniesfromtheSBTi’ssampleofhighimpactcompanieshassettargets.Thesampleof~1,800highimpactcompaniesofparticularinterestfortheSBTiwasdevelopedbasedonananalysisofcompanieswiththegreatestpotentialimpactonclimatemitigationjudgedbyemissionsandmarketcapitalisation.Pleasenotethattheremaybecompanieswithcommitmentsorapprovedtargetsinsomecountriesthatarenotreflectedheresincetheyarenotpartofthehigh-impactsample.Geographicanalysisofcriticalmassofhigh-impactcompaniesDevelopedEconomiesDevelopingEconomies14SectoralanalysisSectoralanalysisofcriticalmassofhigh-impactcompaniesProgressintheadoptionofSBTsremainsunevenacrossdifferentsectors.Criticalmasshasbeenachievedinthefoodandbeverageandhospitalitysectors.First-moversfromhigh-pollutingsectorslikecement,steel,chemicals,andautomotivearealsojoiningtheSBTi.However,adoptioninthesesectorsisstilllagging.Notes:InlinewiththeSBTi’sTheoryofChangeexplainedintheintroductionofthisre-portthisanalysistracksinwhichsectorsacriticalmass(i.e.20%)ofcompaniesfromtheSBTi’ssampleofhighimpactcompanieshassettargets.Thesampleof~1,800highimpactcompaniesofparticularinterestfortheSBTiwasdevelopedbasedonananalysisofcompanieswiththegreatestpotentialimpactonclimatemitigationjudgedbyemissionsandmarketcapitalisation.Pleasenotethattheremaybecompanieswithcommitmentsorapprovedtar-getsinsomesectorsthatarenotreflectedheresincetheyarenotpartofthehigh-impactsample.15AdoptionofSBTsinkeysectorsSnapshotofadoptionofSBTsbylargesthigh-impactcompaniesbymarketcapitalisationinselectedsectorsPleasenotethatsomeoftheabovecompaniesmayhavesubmittedtargetsforvalidationbytheSBTi,butnothavemadetheirstatuspublicbycopydeadlineforthisreport.TargetsSetCommitted16RemovetechnicalbarriersfortheadoptionofSBTsSincetheSBTilauncheditsfirstsuiteofresourcestosupportcompanieswiththeirtarget-setting,ithasbuiltonseveralyearsofresearch,aswellasexperiencewithhundredsofcompanies,tocontinuouslyimproveitsunderstandingofscience-basedtarget-setting.Reflectingtheselearnings,aswellasevolvingclimatescienceandbestpracticeincorporatesustainability,theSBTihassignificantlyupdatedandsupple-menteditstarget-settingresourcesandsupportservicesovertheyears.Initstechni-calresearchanddevelopmentactivities,theSBTiissupportedbyaScientificAdvisoryGroup11,aswellasaTechnicalAdvisoryGroup,comprisedofsomeoftheworld’slead-ingclimatescientistsandsustainabilityprofessionalsrespectively.SBTiCriteria-ThecriteriatheSBTiappliesforthevalidationofGHGreductiontargetsasscience-basedScience-basedTarget-SettingManual-Astep-by-stepguidetoscience-basedtarget-settingforcompaniesScience-basedTarget-SettingTool-AnExcelbasedtoolallowingcompaniestocalculateGHGreductiontargetsinlinewiththeSBTi’stargetvalidationcriteriaFoundationsofScience-basedTargetSetting-AresearchpaperdetailingthetechnicalfoundationsforthetranslationofclimatesciencetoindividualcompaniesTargetValidationProtocol-TheprotocolthatsetsouttheprocessandproceduresthattheSBTifollowstovalidatecompanies’targetsindetail.Agrowingsuiteofsector-specificresourcesandguidanceSectorDevelopmentsFormanyofthemostcriticalsectorsoftheeconomy,theSBTiprovidessec-tor-specificresourcesorisintheprocessofdevelopingthese.Whileallcom-paniesotherthanfinancialinstitutionscanandmostdosetSBTswithoutusingsector-specificmethods,theycanbepowerfulinmobilisingkeysectorsbytakingintoaccountthedifferentsituationsofeachsector.FormanyindustrysectorstheSBTiprovidestheSectoralDecarbonisationAp-proach(SDA).TheSDAisintendedtohelpcompaniesinhomogenous,energyintensivesectorsaligntheiremissionsreductiontargetswithclimatesciencebyallocatingtheglobalcarbonbudgetouttosectorsandsub-sectorsoftheeconomy.Sectoralpathwaysarealreadyavailableformanykeyindustrysec-tors,includingiron&steel,cement,aluminium,pulp&paper,powergenera-tion,commercialbuildings,andtransport.Addingtothesesectors,theSBTiisworkingtowardsaddingandupdatingSDApathwaysforseveralsectors,includingICT,chemicals,andtransport.Inaddition,theSBTiiscurrentlydevelopingevenmorespecificsectoralap-proachesforfinancialinstitutions,oil&gascompanies,andtheforestry,land,andagriculturalsectors.Allsectordevelopmentprojectsaredeliveredthroughparticipatorymulti-stakeholderprocesses.TheSBTiinvitesthird-partiestoproposeandde-velopsectormethodsthroughitsSectoralDevelopmentFramework.ForanoverviewofsectordevelopmentspleasevisittheSBTiwebsite.11TheSBTi’sScientificAdvisoryGroupconsistsofinternationalclimatescienceandmodellingexperts;detailsofthemembershipwillbepublishedontheSBTi’swebsiteshortlyTheupdatesandadditionstotheseresourceshaveresultedinsignificantlyincreasedaccessibility,clarity,andtransparencyaroundscience-basedtarget-settingforcom-panies.ThisisreflectedinthepercentageoftargetssubmittedtotheSBTithatareapproved,risingfrombelow50%between2015and2018,toover80%overtheninemonthsleadinguptoSeptember2019.Theseimprovementsaremirroredinthedi-rectsupportandfeedbackcompaniesreceivefromtheSBTi.InthefirstsixmonthsfollowingtheSBTi’slaunchinJune2015,acompanyhadtowait,onaverage,morethan100daysforadecisiononitstargetsubmission.Followingsignificantupgradestothetargetvalidationservice,companieshavereceivedaresponseafteranaverageof28daysinthefirstninemonthsof2019.SomeofthekeyresourcestheSBTicurrentlyprovidestocompaniesare:17Institutionalisetheadoptionofscience-basedtargetsAsagrowingnumberofbusinessessetSBTsandthetechnicalfoundationsofscience-basedtarget-settingcontinuetoimprove,SBTsareincreasinglyusedbystakeholdersandshareholderstojudgetherobustnessofacompany’sclimatecommitmentsandstrategies.Thisisincreasinglyreflectedintheirassessmentanddecision-makingframeworks.Moreover,thehighnumberoflargemultinationalcorporationssettingGHGreductiontargetsfortheirvaluechain(scope3)emissionscascadesscience-basedclimateambitionthroughinternationalsupplychains.Overall,thereisapronouncedtrendtowardstheinstitutionalisationofSBTs.FinancialmarketshavebeenparticularlyproactiveinadoptingSBTs,andverificationbytheSBTi,asdecision-makingguidance.Oneexampleiscorporatedebtmarkets,wherecorporatesareseeingsignificantfinancialrewardsfordeliveringscience-basedclimateaction.TheItalianpowerutilityEnelissuedabondlinkedtoitmeetingitsSBTiapprovedtarget,potentiallyyieldingtensofmillionsofEurossavingsonitscostofcapitaloverthelifetimeofthebond.Similarly,FinnishICTcompanyNokiarecentlysigneda$1.5billionrevolvingcreditfacilitywiththepricingmechanismlinkedtoitmeetingitsSBTiapprovedtarget.'Morebroadly,theinvestorcommunityiswakinguptotherisksthatclimatechangebringstofinancialmarkets-andtheirportfolios.CatalysedbytherecommendationsoftheTaskforceforClimate-RelatedFinancialDisclosure(TCFD),investorsaresettingclearexpectationsforcompaniestounderstandandplanfortherisksandopportunitiesachangingclimateandchangingmarketsbring.Akeystrategyforinvestorslookingtomanageclimaterelatedfinancialrisksintheirportfoliosistoensurethecompaniestheyinvestinaremitigatingclimatechange.AprominentinvestorcoalitionworkingtowardsthisisClimateAction100+,bringingtogetherover370globalinvestorswithmorethan$35trillioninassetsundermanagement.Thecoalitionisengaging160focuscompaniesdeemedparticularlyimportantfordecarbonisationoftheeconomicsystem,andaccountingforover80%ofcorporateGHGemissions,onimprovingclimategovernance,disclosure,andaction.ThenumberofcompaniesapprovedbytheSBTiisanimportantprogressindicatorusedbythecoalition.Forabusiness,settingSBTsisapowerfulwaytodemonstratetoinvestorsthattheyarereducingtheirexposuretotransitionrisks.Likewise,investorswanttounderstandtheirportfolios’exposuretotheserisksarelimited-andtheyarethereforesettingtheirowngoalsofaligningtheirportfolioswiththeParisGoals.AnotableeffortinthisdirectionistheNetZeroAssetOwnerAlliance,whichbringstogetherassetownerswithmorethan$2trillioninassetsthatcommitedto“transitioningtheirinvestmentportfoliostonet-zeroGHGemissionsby2050consistentwithamaximumtemperatureriseof1.5°Cabovepre-industrialtemperatures”andexplicitlyhighlightscollaborationwiththeSBTiastoenableimplementationofthiscommitment.ThefirstportfoliosbuiltcompletelyaroundSBTicompaniesareemerging.Aspartofastrategytomoredirectlycatertotheneedsoftheinvestorcommunity,theSBTiisintheprocessofdevelopingabespokeapproachforscience-basedtarget-settingforfinancialinstitutions.Throughcompanies’targetsandactionstoreduceemissionsintheirvaluechains,SBTsarealsobecomingincreasinglyembeddedininternationalsupplychains.Over92%ofcompanieswithapprovedSBTshavesetambitioustargetsfortheirvaluechain(scope3)emissions.Andcompaniesarewellontheirwayonimplementingthesetargets.12Thiscascadingofambitionisbecomingamajordriverforclimateactionasmanycompanies’firstpointofcontactwiththeconceptofscience-basedtarget-setting,particularlyinemergingmarkets,iscomingthroughcustomersorsuppliers.ThisisfurtherfacilitatedbytheintegrationofSBTsintoestablishedcorporatereportingframeworks,notablytheCDPInvestorandSupplyChainquestionnaires.Finally,regulatorsareincreasinglyturningtotheSBTiasapowerfultooltocatalyseprivatesectoraction.Notably,theJapaneseMinistryofEnvironmenthassetitselfagoalof100JapanesecompanieswithapprovedSBTsby2020.Insomeinstancestherearefirstsignsofambitionloop-positivefeedbackloopsinwhichboldgovernmentpoliciesandprivatesectorleadershipreinforceeachother,andtogethertakeclimateactiontothenextlevel.Theabovedescribedtrendsofinstitutionalisationareexploredinmoredetailinthecasestudiesinthefollowingsection.12AccordingtoarecentsurveyofcompanieswithapprovedconductedbySBTi,80%(76outof95)oftherespondentsdevelopedcomprehensivestrategiestoreducescope3emissions,and46%(43outof93)reportedthattheyareontracktomeettheirscope3targets.18Targetsbasedonsciencearetheonlyeffectivewaytomeetthechallengesweface.Aroundtheworld,hundredsofbusinessesarealreadyshowingthatthisispossiblewithsubstantialbenefitstobrandreputationandthebottomline.-AnandMahindra(Chairman,MahindraGroup)""IMPACTOFTHEINITIATIVE19Theannualscope1&2GHGemmisionscoveredbyscience-basedtargetsareWhenalltargetsareachieved,annualscope1&2emissionswillbereducedby265miliontonnesrepresentinga35%reductionfromallcompanies'baseyearemissionsImplementingallscope1&2targetswilldriveinvestmentintomitigationactivitiesofuptoThesesavingsareequivalenttoshuttingdown68coalfiredpowerplantsroughlyequivalenttotheannualemissionsof193coalfiredpowerplantsTheannualscope3GHGemissionscoveredbyscience-basedtargetsareroughlyequivalenttoayearsworthofemissionsofover828millioncarsNote:Pleaseseeoverleafforexplanationofmethodologyusedtoestimateimpactsenoughtopower11millionhouseholdsMeetingalltargetswilldriveupto90TWhofannualrenewableenergygenerationImpactoftheinitiative20AstheadoptionofSBTsbycompaniescontinuestoaccelerate,weareseeingsignificantandgrowingimpact.ThebroadadoptionofSBTsbybusinesseshasthepotentialtocatalysetransformative,systemicchangeby:Thesedifferentleversofchangeareexploredfurtherinthefollowingcasestudies.Notesonapproachestoestimateimpact:Annualscope1and2emissionsreductionsdrivenbySBTs:AnnualemissionsintherespectivebaseyearsforSBTcompaniesequateto752milliontonnes.Theweightedaverageambitionofallapprovedscope1+2emissionsis35%reductioninannualemissionsoverthetargetperi-ods.Thismeansthatintheirrespectivetargetyears,collectiveannualemissionswillbe265milliontonneslower,whencomparedtothebaseyears,forallapprovedcompanies.InvestmentdrivenbyimplementationofSBTs:TheInternationalEnergyAgency's(IEA)marginalabatementcostsareusedtodeterminehowmuchinvestmentthereductionsfromSBTswoulddrive.TheIEAestimatesmarginalabatementcostsof30–50USD/tonupto2020,and80–100USD/tonbetween2020and2030tokeepwarmingbelow2°C;mid-rangesof40USD/tonupto2020,and90USDbetween2020-2030.ThesevalueswereappliedtothecollectiveannualreductionsthatwouldbeachievedifallapprovedSBTswereachieved.RenewableelectricitygenerationdrivenbySBTsAdditionalrenewableelectricityconsumptiondrivenbySBTswasestimatedbyassessingtheemissionsandelectricityconsumptioncoveredbyallscope2andrenewableenergytargetsbasedonGHGemissionsandenergyconsumptiondatasubmittedtotheSBTiandCDP.Anestimateofnon-renewableelectricityconsumptioninthesamplewasdeveloped,aswellastheshiftinthisconsumptionnecessarytoachievetherespectivetargets.DrivingGHGemissionreductionsintherealeconomythatsignificantlycontributetobringingdownGHGemissionsatthegloballevelDrivinginnovationanddeploymentoflow-carbonsolutionsthroughhighambitiontargetsCascadingambitionthroughtheeconomywithSBTsforcompanies’valuechainsCatalysingmoreambitiousclimategoalsatthecountry-levelthroughastrongsignalfrombusinesstogovernmentinsupportofambitiousclimatepolicy—startingan‘ambitionloop’Shiftinginvestmentflowstosupportthetransitiontoanet-zeroeconomybyprovidingbanksandinvestorswithaframeworktoaligntheirportfolioswith21Ambitionbreedsambition-Someleadingcompanieshavealreadymettheirscience-basedAmongthe280pluscompanieswhohavesetscience-basedtargetsthereareahandfulthathavealreadymettheirgoals,andarelookingtorenewthem.Enel,In-gersollRandandTelefónicawereearlysignatoriestotheinitiative,andsettargetsfor2020.Theyhavealreadydelivereddirectemissionreductionsintherealeconomyandarenowbuildingontheirsuccessandsettingnewgoalsfor2030andbeyond..IngersollRandisadiversifiedindustrialmanufacturingcompanyheadquar-teredinDavidson,NC.Itsbrands—includingClubCar®,IngersollRand®,ThermoKing®andTrane®—enhancethequalityandcomfortofairinhomesandbuildings;transportandprotectfoodandperishables;andincreasein-dustrialproductivityandefficiency.In2020,ThermoKingandTranewillformanewcompanywhileIngersollRand’sindustrialsegmentwillcombinewithGardnerDenver.OldTarget:Reducescope1and2GHGemissions(onaperunitrevenuebasis)by35%by2020,from2013levels.Reducetherefrigerantfootprintofproductsby50%overthesameperiod.NewTargets:Newtargetswillbemadepublicinthenearfuture.Enelisamultinationalenergycompanyandoneoftheworld’sleadingintegratedelectricityandgasoperators.Itworksin34countries,generatingenergywithamanagedcapacityofmorethan89GW,andsellinggasanddistributingelectricitytoover70millionendusersviaanetworkspanningapproximately2.2millionkm.OldTarget:ReduceGHGemissionsperkWhby25%by2020froma2007base,reachingaGHGemissionvaluelowerthan350g/kWhby2020.NewTargets:Reducescope1GHGemissionby70%perkWhby2030,froma2017base.Reduceabsolutescope3GHGemissionsfortheuseofsoldproductsby16%by2030froma2017base.TelefónicaisamultinationaltelecommunicationscompanyheadquarteredinMadrid.Itisoneofthelargesttelephoneoperatorsandmobilenetworkprovidersintheworld,providingfixedandmobiletelephony,broadbandandsubscriptiontelevision,inEuropeandtheAmericas.OldTarget:Reducescope1and2GHGemissionsinabsolutetermsby30%by2020and50%by2030froma2015base.NewTargets:Newtargetswillbemadepublicinthenearfuture.ThejourneytocertificationForeachofthesecompanies(allfromverydifferentsectors),thedecisiontosetascience-basedtargetcameaboutindifferentways.However,theUNclimatechangetalksinParisin2015,whichresultedinanagreementto“keepglobaltemperaturerisethiscenturywellbelow2°Cabovepre-industriallevelsandtopursueeffortstolimitthetemperatureincreaseevenfurtherto1.5°C”,provedinspirationalforthemall.Telefónicafirstsettargetsforenergyefficiencyin2010,whichtheymet.InthewakeoftheParisAgreement,thecompanysetnewtargetsthatweremorecomprehen-sive–forenergyefficiency,emissionsandrenewables.AccordingtoMayaOrmazabalHerrero,HeadofEnvironmentandClimateChange,ForJavierBolanosMunoz,HeadofESGRatingsandSustainabilityIndicesatEnel,thekeyistohaveadestination,andtousethescience-basedtargetsasaroadmaptogetthere.Enelannouncedacommitmentin2015tofulldecarbonisationby2050.Their2020targets–whichtheyareontracktomeet–andtheirnew2030targetsarestagingpostsalongtheway.Similarly,IngersollRandknewtheyhadtoaddressthecarbonfootprintofrefrigerantsuseintheirproductsandsettingatargetgavethemaframeworktostartdoingthis.WerealisedourtargetshadtobeabsoluteandthatwehadtodecoupleourbusinessgrowthfromGHGemissions.""22AmbitionbreedsambitionOnethingtheseearlymovershaveincommonisthattheexperienceofsettingsci-ence-basedtargetsandthenimplementingthepoliciesnecessarytomeettheir2020goalshasbolsteredambitionandinspiredthemtosetnew,boldergoalsforthede-cadestocome.HollyEmerson,SeniorSustainabilityAnalystatIngersollRandsaidthatwhentheysettheir2020targetstheythoughttheywereambitious.Buttheymetthemtwoyearsearly.“Thenextfrontierofsustainabilitywillrequireboldactionandthismadeuses-tablishanevenmoreambitioussetoftargets–evenifwedon’tknowforsureyethowwe’llmeetthem.Wearesettingambitious,impactfultargetsthatarealignedwithwhatthesciencesaysisnecessary–andthatwillforceustoinnovateandthinkdifferently.”Telefónicaalsometits2020targetsearly,asaresultofimplementingnewinitiativesacrossitsoperations.In2019,thecompanysignedthe‘BusinessAmbitionfor1.5°C’pledge,joiningotherleadingcompanies(includingEnel)inaligningtheirbusinesseswiththeaimoflimitingglobaltemperatureriseto1.5°C,andisagreeingnew,ambi-tioustargetsfor2030.Eneltoohasuppeditsambition,witha2030targetthatismuchmoreambitiousthanits2020one.LeadershipiskeyForeachofthesecompanies,buyinandsupportfromseniorleadershiphasbeenab-solutelycritical.JavierBolanosMunozfromEnelexplainedthat,“Everythingchangedwhenourmanagementchangedin2014.OurnewCEO,FrancescoStarace,hadavisionforEneltochangecompletely,andheupdatedthemissionandvisionofthecompanyandbeganacceleratingthetransitiontowardsasustainableenergymodel.”Similarly,theCEOofIngersollRand,MichaelW.Lamach,hassaidthattheclimateandenergytargetsarefoundationaltothecompany.Inthecompany’s2019SustainabilityReporthewrote:“Sustainabilityismorethansomethingwedo;it’severythingwedo.Sustainabilityisembeddedintoourbrandpromiseandourcorestrategies.Itdiffer-entiatesourbusinessmodel,allowingustodrivestrongshareholderreturnsoverthelong-term.”Meanwhile,atTelefónicaclimatehasgonefrombeingaspecialistissueinthecompanytobeingamainstreampartofbusinessstrategy.ClimatetargetsarenowlinkedtothevariablebonusesofBoardmembersandotherseniorstaff(thisisalsotrueatEnel)andeverypartofthecompanyhassomethingtodoonclimate–fromHR,tomarketing,tooperations,andpurchasing.RenewablesattheheartForEnelandTelefónica,inverydifferentways,renewableenergyisakeyplankintheirstrategyforemissionsreduction.Enelistransformingthefundamentalsofitsbusinessbymovingfromgeneratingpowerfromfossilfuelstoproducingitfromrenewables.In2014,thecompanyhadarenewablesinstalledcapacityof38.3%;by2021theyexpecttoreach55%.Theyarealreadytheworld’slargestrenewableutilityintermsofinstalledcapacity.Theflipsidetoincreasinginvestmentinrenewablesisthedivestmentfromfossilfuels.Enelhascommittedtoreducingitsthermalcapacityby7GWbetween2019and2021,withafocusonphasingoutcoal,whichcurrentlymakesupaboutafifthoftheenergymixintermsofinstalledcapacity.TheyhavealreadyclosedorannouncedclosureofplantsinItaly,SpainandChileand,workingwithregulators,willcloseothersoverthenextfewyears.Meanwhile,Telefónica’smainemissionscomefromelectricityuse,andsoshiftingtorenewablesisessentialforthemtoreduceemissions.Theyhaveatargetof100%renewablesby2030(alreadymetinBrazilandEurope),whichtheywillreachthroughacombinationofstrategies:buyinggreenenergycertificates,enteringpowerpurchasingagreements,andgeneratingenergyonsite.Technology,innovationandcollaborationForallofthesecompanies,achievingtheir2020targets,andevenmoreso,settingtheirsightsonbiggercutsfor2030andbeyond,meanshavingfaithinfuturetechnologyandthefruitsofresearchanddevelopment,innovation,andcollaboration.Forexample,IngersollRandisworkingwithsupplierstodevelopnewgenerationrefrigerants.In2018,theyintroducedseveralnewproductsdesignedtolowerenvironmentalimpact.Theyknowtheyneedtocontinuethisinnovation.AsHollyEmersonexplained,“Wedon’tknowwhattechnologywillexistintenyearstohelpusmeetourtarget.Butnowwehavetheincentivetofindout.”23Similarly,MayaOrmazabalHerreroexplainedhowTelefónicaisworkingwithitssupplierstodiscovertechnicalsolutionstoincreaseefficiency:“Weneedtokeepourenergyuseasflataspossiblesothataswegrow,wedon’tconsumemoreenergy.Thismeansincreasingefficiencybyinvestinginnewtechnologyandinnovation.Forexample,we’rereplacingcopperwiresinournetworkwithopticfibres,andinvestinginmoreefficientcooling.”Sofar,it’sworking:datatrafficonTelefónicanetworkhasalmosttripledoverthelast3years,butenergyusehasremainedflat.ForJavierBolanosMunozthekeytoachievingEnel’sambitious2030goalswillbeopeninnovation:GovernmentshavesigneduptoParis:nowtheyneedtoputthepoliciesandlong-termplansinplacetodeliverontheircommitments.Andthisinturnwillenablebusinessestoplananddotheirbit.”Betweenthem,thesecompaniesarehelpingshowwhatispossibleviaacombinationofvision,ambition,technicalknow-howandstrategy.Theyareleadingthewayonscience-basedtargetsanddemonstratingwhatbeingfitforthefuturemeansforbusiness.Weneedtocollaboratewithpeoplefrominsideandoutsidethecompanytodevelopthenewtechnologyandothersolutionsneededtohelpusreachourtargets.WehavetoaccelerateambitionifwearetomeettheParisgoals.Everyonehastoplaytheirpart.""24Theheavylifting-Howheavyindustryisimplementingscience-basedtargetsTherearesomesectorsinwhichreducingemissionsisparticularlychallengingduetothenatureoftheproductorservice,ortheproductionprocessesinvolved.AsJeffTurner,HeadofSustainabilityatDSMsaidwhenhespoketotheScienceBasedTar-getsinitiative:“Settingascience-basedtargetishardenoughbutdoingitinaheavyindustrylikesteel,cement,orchemicalsisreallytough!”It’scriticalthatprogressismadeinthesesectors,astheycontributesignificantlytototalgreenhousegasemis-sionsglobally.Bydecidingtoimplementscience-basedtargets,thecompaniespro-filedbelowaresettinganimportantexample,anddemonstratingthatwithinnovationandvision,eventhemostcarbon-intensiveindustriescanmakeprogresstowardsbe-ingpartofanewlow-carbonfuture.thyssenkruppAGisaGermanmultinationalconglomeratewithfocusonin-dustrialengineeringandsteelproduction.ThecompanyisbasedinDuisburgandEssenandemploysover160,000peoplein78countries.ItisoneofEu-rope’slargeststeelproducers.Targets:Reduceabsolutescope1and2GHGemissionsby30%by2030froma2018baseyear.Reduceabsolutescope3GHGemissionsby16%by2030froma2017baseyear.RoyalDSMisaDutchmultinationalactiveinthefieldsofhealth,nutritionandmaterials.Thecompanywasestablishedin1902bytheDutchgovernmenttominecoalreservesbutshiftedawayfromminingandlaterpetrochemicalsto-wardshealth,nutritionandmaterials.HeadquarteredinHeerlen,DSMemploysover20,000peopleinaround50countries.Targets:Reduceabsolutescope1and2GHGemissions30%by2030froma2016baseyear.Reducescope3GHGemissionsfrompurchasedgoodsandservices,up-streamtransportationanddistributionandwastegeneratedinoperationsby28%pertonofproductproducedby2030froma2016baseyear.HeidelbergCementisaGermanmultinationalbuildingmaterialscompanyheadquarteredinHeidelberg,Germany.ItisaDAXcorporationandisoneofthelargestbuildingmaterialscompaniesintheworld.Targets:Reducescope1GHGemissionsby15%pertonneofcementitiousmaterialsby2030froma2016baseyear(includesbiogenicemissionsandremovalsassociatedwiththeuseofbioenergy).Reducescope2GHGemissionsby65%pertonneofcementitiousmaterialswithinthesametimeframe.It’sajourneyForeachofthesecompanies,thedecisiontosetascience-basedtargetwasasteponajourneytheyhadbeenonforsometime.Forexample,HeidelbergCementhadalreadysetatargetfortheiroperations,whichtheygotcertifiedretrospectivelywithhelpfromaconsultant,makingthemthefirstcementcompanytohaveatargetap-provedbytheScienceBasedTargetsinitiative.ForThyssenkrupp,settingscience-basedtargetswasalsopartofalongerprocessthathadstartedyearsbefore.EleonoraMueck,SustainabilityStrategyManagersaid:“Wehadbeentrackingscope1and2emissionsforalongtime.Thechallengewastogetanunderstandingofthewholefootprint.Westartedmodellingscope3emissionsafewyearsago,withaviewtoidentifyingwhichwerethemostrelevant,andun-derstandingwhichleverswecouldpull,whichtechnologieswecouldusetoreduceemissions.WesetourtargetsinMay2019,andhavecontinuedtoworksincethen,breakingdownthetargetsfordifferentpartsofthegroup.”ForDSM,thecatalystwasthe2015UNClimateAgreementinParis.AsJeffTurner,HeadofSustainabilityexplained:“DSMwasavocalsupporteroftheParisAgree-ment.FollowingParis,westartedthinkingaboutourownscience-basedtargets.Wethought:‘ifthere’samethodologyweshouldstartusingit’.Wealreadyhadambitiousreductiontargets;wethoughtwe’dbettercheckiftheyalignedwithParisandwiththescience.”25Theywereinforasurprise:“Wewereastonishedandconcernedwhenwediscoveredthatthetargetswehadwerewayshortofwhatweneededtodoourfairshare.Atfirsttherewasdisbelief,thenacceptanceanddeterminationtoworkoutacrediblepath-waytodeliverthenecessaryreductions.”Raisingambition,goingbeyondoperationsForeachofthesecompanies,joiningtheScienceBasedTargetsinitiativeraisedchallenges,andforcedthemtolearnmoreabouttheiremissionsandstretchbeyondwheretheyhadalreadygotto.ForHeidelbergCement,thefirststepwastoincreasetheambitionoftheiroperationaltargets(scopes1&2)toensurethattogethertheywerealignedwiththescience.Forthyssenkrupp,thechallengewasmoreinscope3,whichrepresentsthelargestpartoftheiroverallfootprint.Oneofthethingstheydoisbuildindustrialplantsforothercompanies,includingcementcompanies,whichhaveahighfootprint.DanielSchleifer,SeniorSustainabilityManagersaid:“It’sachallenge,butit’salsoanopportunitytousetechnologytomakeareallysignificantdifference.Asanengineeringcompany,wethink:‘WehaveinnovativesolutionstoreduceCO2emissionsforourcustomers.Let’simplementthem.’”ForDSM,settingthetargetsrequiredalotofupfrontmappingwork.AsJeffTurnerexplained:“Asascience-basedcompanyweneededtoknowfromtheoutsetifwecouldachieveascience-basedtarget,whatitwouldcost,andtheresourcesinvolved.”RonvandenAkker,DirectorEnvironment&ManufacturingCompetencesatDSMadded:“Wehadtodoalotofwork–feasibilitystudiesetc.Itwasalongprocesstointerprettheclimatescienceandthenconnectthattoourscienceandengineeringmind-set,andgetthenumbersonthetable.Ittookthebestpartofayear.”Whattheyreceivedisindeedchallenging.JeffTurner:“Ourscience-basedtargetsrepresentahugechangeforus–astepchangeinambition,andcommitmentofresources&investment.Wehavehadtolookathowwewillgroworganicallyandadaptourduediligenceonacquisitions.”AswithThyssenkrupp,thereissignificantreductionpotential-andsignificantcomplexity-inDSM’sscope3emissions.AsvandenAkkerexplained:“Ourscope3emissionsarebiggerthanscope1and2.There’shugevarietyinwheretheycomefrom–wehave1000sofsuppliers.Weneedtoengagewithatleast200ofthemtocover70%ofscope3emissions.Oursuppliershavetospeaktotheirsuppliersandtheirsuppliershavetospeaktotheirsuppliersandsoon.”TechnologyandinnovationForcompaniesinthesesectors,thetaskofreducingemissionsisarguablymorechallengingthanforothersbecauseofthenatureofwhattheydoandmake.They,morethanothers,aredependentonnewtechnologyandinnovationtocreatenewopportunitiesforlower-carbonproduction.PeterLukas,SustainabilityManageratHeidelbergCementexplained:“Sixtyfiveper-centoftheCO2footprintofcementcomesfromthechemicalcompositionoflime-stone,and35%fromtheheatusedintheprocess.Theproductionprocessislesscarbonheavythansteelorglass,howeverweknowwehavetodomoretofurtherimprovesustainability.Weareimprovingenergyefficiency,andincreasingtheuseofalternativefuelsandalternativerawmaterials.WearealsoinvestingheavilyinR&Dintonewproductsandtechnologiesforcapturingcarbon.“Indeed,akeypartofourstrategytoreduceemissionsistocapturetheCO2generat-edduringtheproductionprocess,andeitheruseitorstoreitunderground.ChemicalcompaniesneedCO2fortheirbusinesssowecanprovidecapturedCO2tothemasarawmaterial.However,therearetechnologicalandresource-relatedlimitationstothisoption,becauseyouneedaccesstohydrogenfromrenewablesources.Sequestra-tionispossible,butthebestoptionistobindCO2backintorecycledconcrete.Thisiscalled‘recarbonation’andoffersthepotentialtoreachequilibriumbybringingthetwomaterialstreamstogether–i.e.CO2fromtheproductionofnewcement,andrecycledconcretefromdemolishedbuildings.“Forrecarbonationtoworkatscaleyouneedaclearrecyclingsystemforconcretefromdemolishedbuildingsthatisspeciallydesignedforthispurpose.Thisdoesnotexistyet.Mostdemolishedconcrete-90%-isjustusedassub-surfacebasematerialduringtheconstructionofroadsandbuildings.Thereshouldberegulationinplacethatsaysbeforeanyrecycledbuildingmaterialsareusedinthefoundationsofnewconstruction,theymustberecarbonated.Comparableregulationsexistforotherma-terialslikesteel,forexample.Weneedtocatchup,andnewinfrastructure,suchaspipelines,needstobeprovidedforthesustainabletransportofthecapturedCO2.”thyssenkruppisalsolookingatlower-carbonwaysofproducingsteel,andatcaptur-ingtheCO2fromtheproductionprocessandturningitintomarketablechemicals.DanielSchleifer:“Althoughthyssenkruppisknownasasteelcompany,weareinfactaverydiversifiedindustrialgroup,andthisisreflectedinouremissions.Thatsaid,morethan90%ofouroperationalemissionscomefromthesteelpartofthebusiness,whichaccountsforroughly20%ofourturnover.Thetwomainwayswearereducingemissionsare‘carbondirectavoidance’,and‘carboncaptureanduse’,throughCar-bon2Chem®technology26“Theformerinvolveschangingthewholesteelmakingprocessbyreplacingcoalasareductionagentwithgreenhydrogen.Thelatterinvolvescapturingthecarbonemit-tedinsteelproductionandconvertingit,usinggreenhydrogen,intobasechemicalssuchasmethanolandammonia,thatcanbeusedinfertilisers,bioplasticsandfuelamongotherthings.Thesearethesamechemicalsthatindustryisusingalreadybutbecauseofthemodeofproduction(i.e.greenhydrogen,notfossilfuels)theyhavemuchloweremissions.”Critically,theCarbon2Chem®technologythyssenkruppisdevelopingcanalsobeappliedinothersectorsbesidessteel,suchaslimeandcement,sothereisabusinessopportunityforthem.Theycanreducetheirownemissionsandalsomarketthetech-nologytoothercompanies.However,currentlythereisnotenoughgreenhydrogenavailabletoachievetheirtargets.DanielSchleifer:“Weasasocietyneedtoincreasethecapacitytoproducehydrogenfromrenewables.Wealsoneedinvestmentintransportinfrastructure–e.g.pipelinesandships.Ultimately,allindustrialsectorsneedalotmoregreenenergyfortheirtran-sitiontowardsnetgreenhousegasneutralitythanthereisnoworthanthereareplanstohave.”Thechemicalsectorishighlydiverseandheterogeneous,rangingfrompetrochemi-calsandbasechemicalstobiochemicalsandnutritionalingredients.DSM’sportfolioisintheselatterclassesandassuchdon’thavethehighfootprintofpetrochemicalscompaniesproducingthebasechemicals.RonvandenAkkerexplained:“Ingener-al,chemicalprocessingrequiresconsiderableenergyinputs.However,ourportfoliomakesusabitunusual.Weareachemicalscompanybynomenclaturebutbymind-setandportfoliolessandless.Wehaveareallyheterogeneousportfolio,andthebulkofouremissionsarewithoursuppliers.WearemigratingourownprocessestolimitGHGemissionsbymakingenergysourcescleanerandincreasingitsenergyefficien-cy.Wehaveidentifiedampleopportunitiesandarebeginningtoactonthem.Similarjourneysareexpectedfromoursuppliersasthemajorityofouremissionslieinourvaluechainandformpartofourscope3target.”LeadershipandbeliefForallofthesecompanies,steppinguptothechallengeofreducingemissionshasbeenaboutleadershipandbelief.InFeikeSijbesma,DSMhasaCEOwhohasstakedhisreputationonthecompany’sclimategoals.Inavideoontheirwebsitehesays,“Ifyou,asacompany,havetheabilitytomakeadifference,thenyoumustuseit.Doingwellanddoinggoodmustgohandinhandtogether,otherwisepeopledon’tworkforyourcompanyanymore,peopledon’tbuyyourproductsanymore,youloseyourlicencetooperate.”ForJeffTurner,thisinturncreatesanimperativeforhissustainabilityteamtodeliver:“IfyourCEOisontheworldstageadvocatingforcarbonpricingbutyoudon’thaveaGHGemissionstargetalignedwithsciencethat’sproblematic.LeadershiphasalsobeenimportantatHeidelbergCement.PeterLukassaid:“Themomentumforourtargetcamefromthetopmanagement,withstrongsupportfromthesustainabilitydepartment.Wecouldseeclearlywhatwashappeningtoindustriesthatwerefailingtoadapt.Asbigplayersinanimportantindustrialsectorweknewwehadtoact.Thereareanumberofimperativesfor–andpotentialbenefitsof–action,includingenhancedreputationandlowercosts.”DanielSchleiferalsoseesanumberofreasonsforaction:“Climatestrategyiscoretoourcompanystrategy–increasinglyso.Emissionsareakeyfactorinoperationalde-cisions.Thereareanumberofreasonsforthis.Regulationcreatespressure;marketsarechanging;weneedtotakeintoaccountlongtermsrisksandopportunities;it’simportantfromacompetitivenessperspective.Andthenthereispersonalconviction:wehavetodothis,it’stherightthingtodo,andwehavetostartnowifwewanttobeaheadoftheothers.”HiscolleagueEleanoraadded:“Settingatargetisjustthebeginning.Itshowsyouwhereyouneedtogo,anditleadstoanextraeffortbeingmade,andforcesafocusonthedetail.Asanengineeringcompany,technologyandinnovationareattheheartofwhatwedowhichmakesusconfidentthatwehavethenecessaryskillsandre-sources.Still,weneededtogetbuyinfromotherdepartmentsandthebusiness,andtogetthemliningupbehindourcommitments.Luckily,wehavehadbackingoftheBoardallalong.”WearetranslatingParisintowhatitmeansforus.It’sincrediblyambitiousandtoughtoimaginehowwewillgetthere.Butwearenotheroes.Wearejustdoingourfairshare.Everyonehastodothat.""27WholeeconomytransitionNoneofthesecompaniesbelievestheycandothisalone.Theyarefullyawareofthescaleofthechallengeandtheneedforcollectiveaction.Asthyssenkrupp’sDanielSchleiferputit:“Ibelievesteelhasaplaceinaclimateneu-traleconomy.Indeed,Idon’tthinkaclimateneutraleconomywouldbeabletorunwithoutsteel.Ofcourse,therearesomereallybigchallengestogetfromwherewearenottowhereweneedtobe.Thesechangesdon’tjusthavetotakeplacewithinsinglecompanies,butacrosswholeindustries,thewholeeconomy,includingenergyprovisionandinfrastructure.It’sawholescaletransformationthatisneededbutIamconfidentandpositivethatitispossible.Governmentsneedtosupportthistransitionbycreatingtherightconditionsandincentivesforinvestment,andbyunderstandingandacceptingthescaleofthetransformationneeded.Regulationisneededtosup-portthis.”PeterLukasatHeidelbergCementagreed:“Thisisanoverarchingsocietaltaskwhichwon’tworkifonecompanyalonetriestodoit.Thewholeindustryneedstocooperateandfundamentallychangethewayitworks.Andotherindustriesaswell,forexampleconstruction.Weneedalotofpoliticalsupport,regulatorysupport,andcommitmentfromcompanies.”AndthemessageisthesamefromJeffTurneratDSM:“NoneofuscandeliverontheParisagreementwithoutsignificantchangestogovernmentpolicy.Thewholesectorandtheactorsinoursupplychainneedtobeliftedup,andthatwillonlyhappenwithlegislation.”Eventhemoreprogressivecompanieslikeoursknowwearenotgoingtogetwhereweneedtounlessthekeypoliciesarebroadlyinplace,startingwithameaningfulpriceoncarbon.""28Clearingthehighestbar-Howcompaniesaresettingtargetstokeepglobalwarmingbelow1.5°CInOctober2018theIntergovernmentalPanelonClimateChange(IPCC)setoutthecaseforlimitingglobalwarmingtolessthan1.5°Cabovepre-industriallevels.Thereport,collectivelyauthoredbytheworld’sleadingscientists,andapprovedby195governments,comparedtherisksof2°Cwarmingto1.5°Candconcludedthatlimitingwarmingto1.5°Cwaspossiblebutwouldrequire“rapidandfar-reachingtransitionsinenergy,land,urbanandinfrastructure[...]andindustrialsystems.”Itsaidthatambitiousclimateactionwouldbringmanybenefitsforsharedprosperityandeconomicstabili-ty,includingmorejobs,increasedenergyaccess,andimprovementsinhealth.InApril2019,sixmonthsaftertheIPCC’sreportcameout,theScienceBasedTargetsinitiativelaunchednewresourcestoallowcompaniestoaligntheirscope1and2tar-getswitheithera‘well-below2°Cpathway’ora‘1.5°Cpathway’,thetwolevelsofam-bitioncalledforintheParisAgreement.Electrolux,MicrosoftandViñaConchayToroareamongthecompaniesthathavealignedtheirscope1and2targetswithagoaloflimitingwarmingto1.5°C–thehighestlevelofambition.ElectroluxisamultinationalhomeappliancemanufacturerheadquarteredinSweden.Electroluxproductsareprimarilymajorappliancesandvacuumcleanersforconsumeruse.Itisoneoftheworld'slargestappliancemakersbyunitssold.Targets:Reduceabsolutescope1and2GHGemissionsby80%between2015and2025.Reduceabsolutescope3emissionsfromtheuseofsoldproductsby25%duringthesametimeframe,coveringtwothirdsofallproducts.MicrosoftisanAmericanmultinationaltechnologycompanywithheadquar-tersinRedmond,Washington.Itsaysit“enablesdigitaltransformationfortheeraofanintelligentcloudandanintelligentedge."Itistheworld'smostvaluablecompany.Targets:Continuetoannuallysource100%renewableelectricitythroughto2030.Reducescope3GHGemissionsintensityperunitofrevenueby30%by2030froma2017baseyearandavoidgrowthininabsolutescope3emissions.ViñaConchayToroisthelargestproducerofwinesfromLatinAmerica.ItisheadquarteredinSantiago,Chileanditsvineyardscovernearly10,000hect-aresthroughoutChile'smajorwineregions.Targets:Reduceabsolutescope1and2GHGemissions40%by2030froma2017baseyearand50%perbottleofwineoverthesametimeframe.Reduceabsolutescope3GHGemissions17%by2030froma2017baseyearand30%perbottleofwineoverthesametimeframe.ClimateambitionnotnewForeachofthesecompanies,theambitiontoreducetheircontributiontoglobalwarmingbycuttingemissionswasnotnew.Settingambitiousscience-basedtargetswasthenextsteponasustainabilityjourneythattheyhadbegunyearspreviously.ValentinaLira,SustainabilityManageratViñaConchayToro,explained,“Sustainabilityisoneofthemainthemesforourbusiness.Italwayshasbeen.Wearelinkedtotheearth!”TheLatinAmericanwineproducerbegantrackingtheiremissionsandreport-ingthemtoCDPin2007,andthendrewuptheirfirstsustainabilitystrategyin2011,informedbyacompletemappingoftheircarbonfootprintfromvineyardtofinaldes-tinationinover130countries.Similarly,Microsoftfirstsetclimatetargetsin2009.Theyupdatedthemin2012,withacommitmenttocarbonneutrality,whichincludesinvestmentsinefficiency,greenpowerandcarbonoffsetstobetteraddresstheenergyconsumptionandemissionsassociatedwiththeircloudserversanddatacentres.Theybegansourcing100%re-newableenergyin2013.AtElectrolux,theenvironmentandenergyusehavebeenatopprioritysincethe1990s,withafocusontheenergyefficiencyofproducts,reducinggreenhousegasemissions,andincreasingefficiencyinmanufacturing.In2014,thecompanysetarel-ativetargettoreduceemissionsby50%.TheParisAgreementandIPCCreportascatalystsForeachofthesecompanies,theUNclimatechangeagreementreachedinParisin2015andthe2018IPCCreportonkeepingwarmingbelow1.5°Cwerecatalystsformoreambitiousaction.HenrikSundström,VicePresident,GroupSustainabilityAffairsatElectroluxexplainedhowtheSustainableDevelopmentGoalsandtheParis29Agreementcreatedglobalmomentumonsustainability,andmotivatedthemtogetmoreinvolved:“Thegoalswesetin2018followedonfromwherewehadbeenbefore–buttheyweremoreambitious,andabsoluteratherthanrelativetargets.”TheimportanceofscienceForallofthesecompanieshavingtargetsthataregroundedinscienceiscritical.AsElizabethWillmott,CarbonProgrammeManageratMicrosoftexplained:“Everythinghastocomebacktothescience.Weareadata-drivencompany,anditwasclearthatthescientificdataindicatedgreateractionwasnecessary.”ForMicrosoft,therobust-nessoftheScienceBasedTargetsinitiativemethodologywasakeyconsiderationbeforetheyjoined.Willmott:Similarly,forViñaConchayToro,theappealofsettingascience-basedtargetforin-clusionintheir2020SustainabilityStrategywasthattheyknewtheywouldbedoingtherightthing.ValentinaLira:“Wewantedtoknowwhatsortoftargetwouldbemean-ingful,rational,andjustifiable–ratherthanjustdoingwhatwecould,orwhatothersweredoing.”AndHendrikSundströmagreed:“Parisclearlysetoutwhereweneedtogetto.Settingascience-basedtargetwillhelpusgetthere.”Thescope3challenge–andopportunityOntheirscience-basedtargetsjourneyseachofthesecompaniesrealisedtheim-portanceofsettingscope3targets–andhowthiswasbothextremelychallenging,butalsothekeytounlockingsignificantemissionsreductionsthatwouldbringtheminlinewitha1.5°Cgoal.AsHenrikSundströmofElectroluxputit:“Whenyousetascience-basedtargetyouhavetoworkoutwheremostofyouremissionsarecomingfrom.Oursareconcentratedintheproductusephasesoitwasreallyimportanttoaddressthisinameaningfulway.“Itwaschallengingtosetthescope3targetsbecausewehavearangeofdifferentproducts,notallwithenergystandards,alluseddifferentlyindifferentcountries.Wehadinformationonusageforthelargestappliancesbutnotforall,sowehadtoas-sesstheseforeachcountryinwhichweoperate.Andthenwecalculatedthetotaloverallimpactofourproducts.Nowweareimprovingthereportingsystemstoallowustotrackimpact.”ForMicrosoftitwasasimilarchallenge.ElizabethWillmottsaid:“Ourscope3targetisthemostexcitingforus.Thisiswherethemajorityofouremissionsare–i.e.intheuseofourproducts,andupstreamfromoursuppliers.Webegantolookseriouslyatscope3atleastayearandahalfago,andthefirststepwastounderstandfullywheretheemissionswere.Thiswasn’teasy.Alotofthedatawehadonproductusewasestimated,andwehadtoworkoutwho‘owned’differentbits,andwhattheleversofchangewerethatwecouldusetoshiftthem.“OneofthegreatthingsabouttheScienceBasedTargetsinitiativeisitgivesyouatooltoengagewithyoursuppliersbyaskingthemtosetscience-basedtargetsthemselves.Thishasledtoagreatconver-sation,withinandbeyondthecompany.”SupplierengagementhasalsobeencriticalforViñaConchayToro,wherescope3emissions(mainlyfrompackaging)accountfor80%ofthetotal,andforwhomsettingscope3emissionstargetshasbeen“thehardestpart”.ValentinaLira:“Weareworkingwithoursuppliersaspartnerstoreduceemissions.Theyhavebeenveryreceptiveandengaged,andbetween2015and2018wealreadyreducedemissionsby22%.”ArangeofstrategiesandsolutionsAfocusonenergyefficiencyandshiftingtorenewableshavebeenkeyplanksforbothMicrosoftandElectroluxintheireffortstoreduceemissions.Eachcompanyhasalsofocusedonhowtheproductstheymakecanhelpcustomersreducetheirfootprints.AsElizabethWillmottexplained:“Microsoftisanorganisationwherechangeisradicalandconstant,drivenbydigitaltransformation.ApplyingthepoweroftechnologytohelpsolvesomeofthemostpressingenvironmentalchallengesisoneofthemanywaysMicrosoftiscommittedtomakingapositivesocialimpact.”Thecompanyre-centlylaunchedapilottomake825,000Xboxconsolescarbonneutral.AtElectrolux,thethinkingisalongsimilarlines.HenrikSundströmsaid:“Wearelook-ingathowourproductscanhelpourconsumersreducetheirimpact–notjustviaincreasedenergyefficiencyoftheproductsthemselves,butalsobywhattheyenablethemtodo,suchasreducefoodwaste.Throughourcommunicationsandadvertisingwearelookingtonudgeourconsumerstowardsmoreenvironmentallyfriendlybe-haviours,forexamplewemightadvertiseourovensusingapictureofabakedpotatoorvegetablesratherthanasteak,toencourageconsumptionofmoreplant-basedfoods.Andatthesametime,we’llmakesurethere’saprogrammeontheovenforthesesortsoffoods.”Whenwesettargets,wedothistodriverealchange–notjustacommitmentonpaper.WorkingwiththeScienceBasedTargetsinitiativevalidatesthatroadmapandprovidesthecertificationtoensureweareontrack.""30ForViñaConchayToro,thebiggestopportunitieslieinreducingthefootprintoftheirpackaging,andalsomakingdistributionmoreefficientandlow-carbon.Caringforthelandisakeypartoftheirapproach.Thecompanyhassomevinesthatare135yearsold.Thesustainabilityoftheirbusinessis,moreobviouslythanforsomeothers,directlylinkedtothehealthoftheplanet.GovernmentactionneededTheIPCCreportsaidthatallcountriesandnon-stateactorswouldneedtostrengthentheircontributionswithoutdelayiftheworldwastolimitglobalwarmingto1.5°C.Theseleadingcompaniesagreethattheireffortsmustbecomplementedbystrongeractionfromgovernmentstodrivetheunprecedentedlyrapidtransformationneeded.ForMicrosoftacarbonpriceisthemostimportantpolicyreform.ElizabethWillmott:“WehaveusedaninternalcarbontaxatMicrosoftsince2012tomanageourgrowthsustainably,andweknowitworks.Meanwhile,Electrolux’sHenrikSundströmseesgovernmentactionasthenecessarycorollarytobusinessambition:“Wehavetodoourbit.Butinordertobecarbonneutralinourvaluechainwearedependentoncleanelectricity.Politicianshavetoact.Ultimately,wearedependentupondecarbonisingthegrid.Wecanplayourpartbycreatingdemandforrenewables,butgovernmentsneedtocommittodecarbonisation.”Wewantregulatorstoputapriceoncarbontodrivegreaterchangeinawaythatisbotheffectiveandfairtocompanies.""31Cascadingambition-HowleadingcompaniesarecuttingemissionsintheirvaluechainForacompanyaimingtosetandachieveambitiousscience-basedtargets,oneofthemostchallengingtasksisinfluencingactorsintheirvaluechains.So-called‘scope3’emissionsarethoseproducedbyabusiness’ssuppliersandendusers(asopposedtoscope1and2emissionswhichcomefromthecompany’sownoperationsandenergyuse).ForHewlettPackardEnterprise,IKEAandNike,scope3emissionsaccountforamajorityoftheirtotalfootprint,andsostrategiestocutthemwillbecriticaltosuccess-fullyreducingtheiroverallenvironmentalimpact..IKEAisaSwedishmultinationalgroupthatdesignsandsellshomefurnishings.Itistheworld’slargesthomefurnishingretailer.Itsvisionisto“createabettereverydaylifeforthemanypeople”.InterIKEAGroupistheowneroftheIKEAConceptandtheworldwideIKEAfranchisorandIngkaGroupisastrategicpartnerintheIKEAfranchisesystem,operating374IKEAstoresin30countries.Targets:ReducegreenhousegasemissiobnsfromIKEAGroupstoresandotheropera-tionsby80%inabsoluteterms,comparedto2016.(IngkaGroup)ReducegreenhousegasemissionsfromIKEAGroupcustomerandco-workertravelandcustomerdeliveriesby50%inrelativeterms,comparedto2016.(IngkaGroup)Reducegreenhousegasemissionsrelatingtohomefurnishingproductsandfoodbyatleast15%inabsolutetermsby2030,comparedto2016.(InterIkeaGroup)HewlettPackardEnterprise(HPE)isanAmericanmultinationalinformationtechnologycompanyfoundedinNovember2015whenitsplitfromTheHewl-ett-PackardCompany.HPEisfocusedondevelopingintelligentsolutionsthatallowenterprisestocapture,analyseandactupondataseamlesslyfromedgetocloud.Targets:Reduceabsolutescope1and2GHGemissionsby55%by2025from2016base.Reduceabsolutemanufacturing-relatedGHGemissionsinthesupplychainby15%by2025from2016base.Increasetheenergyperformanceoftheproductportfolio30-foldby2025froma2015base.Enablemanufacturingsupplierscovering80%ofspendtosetscience-basedtargetsby2025.Nike,Inc.isanAmericanmultinationalcorporationengagedinthedesign,development,manufacturing,andworldwidemarketingandsalesoffoot-wear,apparel,sportsequipment,accessories,andservices.ThecompanyisheadquarterednearBeaverton,Oregon.Targets:Reduceabsolutescope1and2GHGemissions65%by2030froma2015base.Reduceabsolutescope3GHGemissions30%withinthesametimeframe.MapthefootprintThefirsttaskforanycompanysettingascience-basedtargetistounderstandwheretheiremissionsarecomingfromandwhatareasofferthebestpotentialforreduction.Thismappingexerciseisparticularlychallengingforscope3emissions,especiallyifacompanyhasalargenumberofdifferentsuppliers,and/oradiverserangeofendusersorcustomers.InaninterviewwiththeScienceBasedTargetsinitiative,KarolGobczyński,ClimateandEnergyManageratIngkaGroupsaidthatthefirststepontheirtarget-settingjourneywastomaptheiremissions:“Inspring2017,wedevelopedatooltodothat,withtheresultthatwenowknowwhere99%ofourscope3emissionscomefrom,includingrawmaterials,customertravelanddeliveries.Weunderstandthetotalfootprintofourvaluechain,whichmeansweknowwheretheopportunitiesaretoreduceemissions.”ForHPE,targetsettingalsostartedwithamappingexercise.ShannonSiart,ManagerofClimateStrategy&SustainabilityInitiatives,explainedwhattheyfoundwhentheydidthismapping:“ThemajorityofouremissionsasanITcompanyarescope3–i.e.theycomefromcustomersusingourproducts(downstream),andfromtheextractionofrawmaterials(upstream).Thebreakdownisasfollows–6%operations;67%prod-uctuse;and27%suppliers.Becauseofthisit’svitalthatweengageonscope3.”ThemajorityofNike’semissionsarealsoconcentratedintheirsupplychain.Theyhavebeenengagingwithsuppliersonsustainabilitytargetssince2010,butwhenitcametosettingascience-basedtargettheydiscoveredhowcomplexthemappingexercisewas.JeremyLardeau,SeniorDirectorofGlobalSustainabilityData&Analyticssaid:“Welearnedthatwewouldneedtoenhanceourcapacitytoanalyseourfootprintacrossourcomplexglobalvaluechain.Wehadtobringtogetherfootprintingexpertsanddataengineerstofullyunderstandandmodelouremissions,andthendo32projectionsto2030.Wedidextensiveanalyticalwork,includingscenarioplanning,andthisbuiltthefoundationforourtargetsettingprocess.”Engagement,engagement,engagementHavingmappedtheemissionsandsettheirScope3targets,eachofthesecompanieshadtointensifyoutreachtoandengagementwithsuppliersandcustomers.ForIKEA,thismeantinitiallycollaboratingwithcompanieswithintheIKEAvaluechain,i.e.thefranchiser(InterIKEAGroup)andthefranchisees(thebiggestofwhichisIngkaGroup).AsKarolGobczyńskiexplained:“Ifyouaresettingscience-basedtargetsyouneedtoincludethecarbonfootprintacrossyourvaluechain.InIKEAthisincludescompanieswithinthevaluechain.Weallhaveacommonambitiontobeclimatepos-itiveby2030,byreducingmoregreenhousegasemissionsthantheIKEAvaluechainemits.”ForNike,itwasaboutbuildingonanddeepeningtherelationshipstheyalreadyhadwithsuppliers.ScottVitters,SeniorDirectorofSustainableManufacturing&Sourc-ingsaid:“Ascience-basedtargetthatincludesscope3emissionssignalslittlemorethanintentuntilacompany’ssuppliersarealignedandcommittedtothereductionrequired.Wehavebeensettingcarbonreductiontargetswithoursupplypartnersfornearlyadecadeandareusingourscience-basedtargettoguideourcurrenttargetsettingprocesswithbothfinishedgoodsandmaterialssuppliers.Wehavealsoiniti-atedadiscussionwithseveralofourmoststrategicsuppliersonhavingthemsettheirownscience-basedtargets.“Foranyonesettingascience-basedtargetthereisaninitial:‘Wowthisisbiglift’.Sameforus,andthesameforoursuppliers.Buthavingacommonmethodologyhelpsfo-cusallstakeholdersonthescaleofchangerequiredbasedonthescience,ratherthanarbitrary,company-ledgoals.Italsoensuresourcollectiveattentionisonthebestleversfordrivingthescaleofimprovementneeded.”Hewlett-PackardCompanywasthefirstelectronicscompanytopublishalistofitsmanufacturingsuppliersandHPEisnowasking80%ofitsmanufacturingsuppliersbyspendtosetscience-basedtargetsintheirownoperationsby2025.HPEwilltracktheirprogressthrougheachsupplier’spubliclyreportedgreenhousegasemissionsandthroughdirectone-on-oneengagementwiththesupplier.HPEwillholdsuppli-ersaccountablefortheirownprogresstowardspubliclystatedgoalsandprovidere-sourcestohelpthemsetscience-basedtargets.ShannonSiartofHPE:“Wehavelaunchedtheworld’sfirstcomprehensivesupplychainmanagementprogram.Theprogramincludesthreekeycomponents:anaggressivenewgoaltodriveaccountabilitywithinourownsupplychain;aplantobuildtheca-pabilityofoursupplierstosetscience-basedtargetsintheirownoperations;andacommitmenttoleadthebusinesscommunitybysettingastandardforsupplierGHGengagementandabatement.It’sarippleeffectthatwilldriveactionthroughoursup-pliers,customersandtheworld.“Wearesupportingoursupplierstocreatecustomisedtargetsbasedonthesizeandcomplexityoftheiroperationsandtotrackprogress.GiventhattheITindustryhasacomplexandoftensharedsupplychain,HPEischallengingourpeerstojoinusinenablingsupplierstosetscience-basedtargetsbyimplementingcapability-buildingprograms.Sofar,11%ofoursuppliersbyspendhavesetscience-basedtargets,while67%havecommittedtodosointhenexttwoyears.Theimpactofthesescope3sup-pliertargetswillreachwaybeyondtheHPEsupplychain.Renewables,reuse,recyclingThereisarangeoftacticsthatthesecompaniesareusingtodrivedownemissionsintheirvaluechains,butoneofthemainonesisrenewableenergy.Since2009,Ing-kaGrouphasinvested€2.5billioninrenewableenergyglobally,andnowownsandoperatesmorewindturbinesthanstores.Almost50%ofIKEAstoreshavesolarPVinstallations,reducingthecompany’selectricitycostsandclimatefootprint.Theyarealsoaimingtobecomeacircularcompany.Atthismoment,60%ofmaterialsinIKEAproductsarerenewableand10%arerecycled.AsofDecember1,2019,Nikehasbeenpoweredby100%renewablesinNorthAmer-icaandismorethanhalfwaytomeetingitscommitmenttosource100%renewableenergyacrossownedandoperatedfacilitiesworldwideby2025.Itisalsohelpingsuppliersunderstandhowtheycanusemorerenewableenergy.ThroughitsEnergyandCarbonProgram,whichisactiveinmorethan15countries,Nikeisworkingdirectlywithcontractedfactoriesonreducingenergyuse.Nikeisalsoengagingwithgov-ernmentsandpolicymakerstoadvocateforpoliciesthatletfactoriesdirectlysourcerenewableelectricityfromlocalpowerutilities.ScottVitters:“Usingacommonmethodologyhelpedusunderstandwithoursupplypartnersthattheemissionreductionopportunitiesavailabletouscurrentlywon’tbeenoughtohittargets.WithmostofourmanufacturingenergycomingfromlocalOursuppliersalsosupplyothersandsothetargetstheyaresettingwillaffectthedownstreamfootprintofotherITcompanies.""33electricgridsandmuchofourmanufacturingbaselocatedincountrieswherecurrentpolicymechanismslimitrenewableelectricitypurchasingoptions,ourscience-basedtargetprovidedclarityontheimportanceofacceleratingactionwithotherstakehold-erstoremovesharedbarrierstorenewablepower.”DrivinginnovationForallofthesecompanies,havingscience-basedtargetsisdrivinginnovation,in-creasedefficiencyandinvestmentinnewtechnology.Forexample,HPE’sproductsare1.6timesmoreefficientthantheywerein2016.Theaimisforthemtobethirtytimesmoreefficientby2025.ShannonSiart:“That’sanexponentialimprovement.It’sambitiousandandwilldependoninnovation.Wewillneedtoreinventthewholesys-temtohitthattarget.”AtIKEA,thebeliefisthatthisinnovationwillbeawin-winfortheclimateandthecom-pany.KarolGobczyńskiexplained:“Ourscience-basedtargetswillchallengeusevenmoretoworkinnewways,andwilldriveinnovationandrenewalinourbusiness.Thetransitiontoalow-carboneconomyisnotonlyachallenge,butsomethingwhichwillbringnewopportunities.Thelow-carboneconomyisboostinginvestmentandinno-vation.It’sinclusive,andwillcreatemeaningfulwork.”Meanwhile,Nikehasbeenfocusedfordecadesonembeddingsustainabilityandin-novationintoitsoperationsandworkingcollaborativelywithotherstodrivechangeacrosstheindustry.Ittookthesameapproachtosettingitsscience-basedtargets,initiatingasectoralguidanceworkinggroupwiththeWorldResourcesInstituteinJune2017.Theworkinggroupincludedmorethantenapparelcompanies,materialssuppliersandmanufacturers,andoverthecourseofayearwascriticaltosimplifyingthecomplexitiesoftheindustryanddevelopingsectoralguidance.Meeting–andcreating–demandForallofthesecompanies,innovationisinpartaboutrespondingto,aswellashelpingtocreate,customerdemandandawareness.IKEAisenablingpeopletovisititsstoresinawaythatproducesfeweremissions,e.g.viacitycentreslocations,publictransport,orinelectricvehiclesthatcanberechargedintheircarparks.Theyarealsoenablingcustomerstogenerateelectricityviatheir‘homesolar’offer,whichincludesfinancingofPVpanels.EnablingcustomerstoreducetheirfootprintsandtherebyearnacompetitiveedgeisalsoamotivationforHPE.ShannonSiartexplained:“ForHPEhavingaproductusegoalisimportantbecauseitalignswithourbusinessstrategyandofferstheoppor-tunitytodifferentiateourselvesinthemarket.Wewanttobeknownforcuttingedgetechnologythatdrivestransformationalefficiency.Thisiswhatweofferourclients.Byincreasingtheenergyefficiencyofourproductsweareprovidingbusinessvaluetoourcustomers.”HPEalsoseesitselfasprovidingthetechnologyofthefuture,whichwillbepartofthesolutiontoclimatechange.ShannonSiart:“Wewanttoconnectthedotsandshowthattechnologyandsustainabilityareintertwined.Wewantourproductstohelpachieveclimategoals,forexamplethroughenablingnewresearch.”ForNikeit’saboutdemonstratingvaluesthatalignwithcustomers’expectations.VirginiaRustique-Petteni,SeniorDirectorofEngagementforGlobalSustainabilitysaid:“Consumerstodayexpectbrandstostandforsomething.Consumerswantustoshowweareasustainablebusiness.It’saboutwhatwedo,sayandhowwebehavebutalsowhatwemakeandhowwemakeit.Weneedtobepartoftheconversation,anduseourglobalreachandbrandequitytogalvaniseourpartners,otherindustries,andothersectors.InitiativeslikeScienceBasedTargetsandtheG7FashionPact,whichwerecentlyjoined,areimportantformaintainingtrust.”Economy-widetransformationForallthesecompanies,thereisarecognitionthattheireffortsmustbepartofawiderwhole.Implementingseriousandambitiousscope3targetsisakeywayofcascadingimpactbeyondtheindividualbusiness,andisseenasthestartofabiggermovement.JeremyLardeauatNikesaid:“Settingscience-basedtargetshighlightedthescaleofthedecarbonisationthathastohappenacrossthewholeeconomy.Ourscope3targetcoversrawmaterialextractionandbasicprocessingforthekeycommoditiesthatourindustryandothersrelyupon.Ifwearetomeetourscience-basedtarget,thesesectorsmustcontribute;wecan’tdoitalone.”Similarly,ShannonSiartfromHPEsaid:“Ofcourse,noonecompanycansolveclimatechange–itrequiresglobalcollaborationandcommitment.Ouraimisthatourinnovativeprogramswillactasamodelfortheindustryandtheworld.”Consumerstodayexpectbrandstostandforsomething.Consumerswantustoshowweareasustainablebusiness.""34Creatinganambitionloop-Howtheprivatesectorcanenhancenationalclimateaction,andviceversaAsmoreandmorecompaniesacrosstheglobestepuptothechallengeofaligningtheirbusinesswithaclimate-safefuture,theyaresendingaclearsignaltopolicymakersthatthetransitiontoalow-carboneconomyisunderway.However,theprivatesectorreliesongovernmentstocreatetherightconditions,policiesandincentivestosupportthistransition.Tosolveclimatechange,businessandgovernmentleadersmustworktogethertoacceleratewhatwecallan“ambitionloop,”acycleinwhichgovernmentpolicyandprivatesectorleadershipreinforceeachotherandhelptakeglobalclimateactiontothenextlevel.Smartgovernmentpoliciesarehelpingbusinessesaccelerateclimateactionaroundtheworld.Forexample:JapanasacasestudyCorporateactionsareattheheartofJapan’slong-termclimateandgrowthstrategysubmittedundertheParisAgreement.Japanisthefirstcountrytoprovideexplicitgovernmentsupportforcompaniestosetscience-basedgreenhousegasemissionsreductiontargets.Infiscalyear2019thetotalbudgetrelatedtoJapan'sSBTsupportprogramisapproximately150millionyen($1.4million).CompaniesapplytotheMinistryofEnvironment;iftheyareselected,theyreceiveone-on-oneSBTadvicefromconsultants.Afterinitiallyfocusingonlargecompanies,theprogramhasexpandedtosmall-andmedium-sizedfirms.ThisisnotthefirstchapterinJapan'spushtowardsSBTs—justitslatest.ThecountryhashadaMandatoryGHGAccountingandReportingSystemforlarge-emittingcompaniessince2006.In2015,SonybecamethefirstJapanesecompanytosetanSBT.Sincethen,dozensofJapanesecompanieshavesetSBTsacrossatleast18sectors.TheprogramhasbeenveryeffectiveatgrowingthenumberofJapanesecompanieswithapprovedSBTs.In2018,JapanbecamethefirstcountrywithachemicalsectorcompanySBT.JapanhastradedplaceswiththeUnitedStatesthroughout2019asthecountrywiththelargestnumberofcompanieswithapprovedSBTsandclearlyleadsinthenumberofhigh-emissionscompanies.Bytheendof2020,theMinistryofEnvironmentaimstohaveatleast100approvedJapanesecompanySBTs.Bysteppingupwithleadingmitigationtargets,Japanesecompaniesareprovidingafoundationforthegovernmenttosetmoreambitiouspoliciesandregulations,initiatinganambitionloop.Japan'sprivate-sectorengagementonclimategoesbeyondSBTs.BasedonthesuccessoftheSBTprogram,theMinistryofEnvironmenthasbroadeneditscompanysupporttoincludecompanyparticipationinRE100–agroupofcompaniesthatcommittobepowered100%byrenewableenergy—anddevelopmentofcompanydisclosuresasrecommendedbytheTaskForceonClimate-relatedFinancialDisclosures(TCFD).Risinginvestorpressureisstartingtoturntheseinitiativesintosourcesofcompetitiveadvantageforcompanies.In2019,Japan'sMinistryofEconomy,Trade,andIndustry(METI)andtheMinistryofEnvironmentreleasedsupportingguidanceforJapanesecompaniestojoinestablishedinternationalinitiativesincludingSBTi.Ontheinternationalstage,Japan'sfocusonbusiness-ledengagementandinnovationisreflectedinitsPartnershiptoStrengthenTransparencyforco-Innovation(PaSTI),amongotherinitiatives.Japan'seffortsatcompanyengagementcanbestraightforwardlyreplicatedinothercountriesseekingtokickstartthetransitiontowardambitiouslong-termclimategoals.Inthedecentralisedandbottom-upworldofpost-ParisAgreementgovernance,country-leveltargetsforcompanySBTdevelopmentcanbepartofapolitically-viableapproachtospurringbusinessandindustryactionthatsupportsachievementofnationalclimatetargets.Companyclimateengagementandsupportingpolicies(suchastherenewableelectricityfeedintariff)aretwocomponentsinJapan'songoingtransitiontoadecarbonisedsociety,whichisalsoreflectedinthecountry'sreductionofitsenergy-relatedcarbonemissionsbymorethan10%fromtheirpeakin2012to2018.InIndia,boldnationalrenewableenergytargetsandconsistentfinancingtermshelpedspurrecordopen-accesssolarenergyprojects.InEurope,clearrulesforpowerpurchaseagreementshelpedleadtoincreasedrenewableenergyuse.StrongmandatesandeconomicincentivesforelectricvehiclesinNorwayandCali-forniahelpedmakethemgloballeadersinelectricvehiclesales.AndinChina,clearfinancingledtoarapidlyexpandingfleetofelectricbuses.In2017,Japan'sMinistryofEnvironmentbegansupportingJapanesecompanylow-carboninnovationthroughadedicatedbudgetthathelpscompaniestosetSBTswiththeScienceBasedTargetsinitiative.35Japan'spursuitofglobalSBTcompanyleadershipraisesthequestionofwhenandhowcompanytargetswilltranslateintomoreambitiousgovernmentmitigationpolicies.Therace-to-the-topaspectofJapan'sclimatepoliciesandlong-termstrategyisapositivedriverofinnovation,butitcannotsupplantregulatoryapproachestolaggardsandobsoletefacilities.Thecountry'sclimatetippingpointisyettobeidentified,butthelong-termstrategydevelopmentprocessindicatesitwilllikelybelinkedwithindustryassociationsandcompaniesacrosstheprivatesector.AmenuofoptionsforenhancedNDCsCompanyengagementandinnovationareessentialcomponentsoftransition,buttheyarenotsufficientforglobalclimatestabilisation.Tostabilisetheclimate,weneedpoliciesthatsupportcompaniesinachievingreductionsandaddressstragglersandadverseimpacts.Afullrangeofcomplementary,voluntaryandmandatoryapproachescanaddressbothendsoftheperformancespectrumandcatalyseambitionfeedbackloopsbetweennationalgovernmentsandtheprivatesector.Underthe2015ParisAgreement,countriesmustsubmitneworupdatednationalclimatecommitments,knownasnationally-determinedcontributions(NDCs),bytheendof2020.Thisisanimportantopportunityforcountriestosubmitbolderpledgesthatprovidebusinesseswithgreaterclarityandconfidencetoinvestinclimatesolutionsand,inturn,acceleratethetransitiontoanet-zeroeconomy.ThereareanumberofoptionsforcountriestoincludetheprivatesectorinenhancedNDCsandformalisethevirtuouscycleoftheambitionloop.36ShiftinginvestmentflowstoalignwithParis-Howinvestorsareusingscience-basedtargetstohelpdecarbonisetheirportfoliosInvestorsareincreasinglyintegratingsustainabilityaspectsintotheirinvestmentdecisions.Reliableandcomparableinformationonhowcompaniesareadaptingtoalow-carbonfuturebyreducingtheirgreenhousegasemissionsiscritical.Science-basedtargetscanhelpprovidethisinformation,andindicatetoinvestorshowseriouslycompaniesaretakingtheirclimate-relatedresponsibilities.TheScienceBasedTargetsinitiativespoketoAllianz,aglobalinsurerandinvestor,andCeres,anon-profitworkingwithinvestorsandcompaniestoachievesustainabilitygoals,abouthowtheinvestorcommunityisusingscience-basedtargetstohelpdecarbonisetheirportfolios.Ceresisanon-profitorganisationworkingwithinfluentialinvestorsandcompaniestobuildleadershipanddrivesolutionsthroughouttheeconomy.Throughpowerfulnetworksandadvocacy,Cerestacklestheworld’sbiggestsustainabilitychallenges,includingclimatechange,waterscarcityandpollution,andinequitableworkplaces.TheCeresInvestorNetworkincludesover170institutionalinvestors,managingmorethan$26trillioninassets,advancingleadinginvestmentpractices,corporateengagementstrategies,andkeypolicyandregulatorysolutions.CeresisalsoinvolvedintheGlobalInvestorCoalitiononClimateChange,ClimateAction100+andTheInvestorAgenda.AllianzGroupisoneoftheworld’sleadinginsurersandassetmanagers,headquarteredinGermany.Allianzoffers92millioncustomersinmorethan70countriesawiderangeofproducts,services,andsolutionsininsurance,financialserviceandassetmanagement.Allianzisoneoftheworld’slargestinvestors,managingaround673billioneurosonbehalfofitsinsurancecustomers.TheassetmanagersPIMCOandAllianzGlobalInvestorsmanageover1.4trillioneurosofthird-partyassets.AllianzholdstheleadingpositionforinsurersintheDowJonesSustainabilityIndex.GrowingawarenessandleverageClimatechange–andtherisksassociatedwithit–havegonefrombeinganissuethatmanycompaniesandinvestorsdidnotconsiderascentraltotheirbusinessstrategyonlyafewyearsago,tonowbeingmainstreaminthefinancesector.SueReid,VicePresidentofClimateandEnergyatCeres,toldtheScienceBasedTargetsinitiative,“Whenwefirsthostedaninvestorsummitonclimatechangeoverfifteenyearsago,itwasastruggletogetpeopleintheroom.Manysawclimateasamoralissue,notafinancialone.Nowinvestorsarebangingonthedoorsseekingtobepartoftheconversation.”Reididentifieda2015speechbytheGovernoroftheBankofEngland,MarkCarney,onthesystemicfinancialmarketrisksofclimatechangeandofpursuingshort-termprofitwithoutthinkingaboutthelong-termimplications,asa“clarioncall”toinvestors.“Atthesametime,”shesaid,“climateriskismanifestingintherealworld,forexampleintheformofextremeweatherevents.Investorsknowtheyhavetogetseriousaboutthisandmanagetheirportfoliowithaviewtowardtheserisksaswellasclimatesolutionsopportunities.”Similarly,ThomasLiesch,ClimateIntegrationLeadatAllianzsaidtheyhavebeenworkingwithinvesteeswhoseattitudestoclimateriskhavechangedradicallyoverashortperiod:“Wehaveseeninvesteecompaniesgoingoverthecourseofacoupleofyearsfromnotevenrealisingthatclimatechangewasanissueforthemtorecognisingthestrategicriskandopportunity,andrespondingtoitintheiroperations.”ForLiesch,thisshowstheimportanceofengagement,andofbeingpreparedtoworkwithcompaniestosupporttheirchange:“It’sallaboutaskinghowtheywanttoadapttoaclimatefriendlybusinessmodel.Andthen,aretheygoingquicklyandfarenough?Ifnot,whynot,whataretheobstacles-andhowcanweasapartnersupport?Thetaskforinvestorsisnotjustto‘polish’yourportfolio,anddivestfromenergy-intensivesectors,it’stohelpcompaniesinallsectorstodecarboniseandtofinancethistransitionwithinthenextfewdecades.Weshouldreservedivestmentforcompaniesthatignoretherequirementsforaclimate-neutraleconomy.”37Science-basedtargetsprovidea‘guiderail’ForbothAllianzandCeres,theScienceBasedTargetsinitiativeisausefultooltohelpguidecompanyaction,andsendsignalstoinvestorsaboutcompanies’readinessforandcommitmenttothelow-carbontransition.Reid:“TheScienceBasedTargetsinitiativeiscrucialtoourwork.Itprovidessector-by-sectormethodologiesforcompaniestodevelopcrediblepathwaystoreducetheiremissions.Theinitiativeticksalltheboxesforinvestors–it’sscience-based,there’stransparencyaroundthemethodologiesandcommitments,andthere’stailoringfordifferentsectors.”Similarly,Lieschexplained,Whatascience-basedtargetdoesnottellyouishowtheyaregoingtogetthere.Butitmakesiteasierforustoaskquestions.”BothLieschandReidseescience-basedtargetsashelpingcompaniesmanagetherisksoftransitiontoalowcarboneconomy.Reidsaid:“WhencompaniessetthemselvesonacrediblepathtoGHGemissionreductionstheyarebetterpreparedforresilience,andlesslikelytobestuckwithstrandedassets.Lieschagreed:“Havingascience-basedtargetdoesn’tmeanacompanyfacesnotransitionrisk.Butifacompanyhasascience-basedtargetthatistranslatedintocorporateactionthenit’smuchmorelikelythattheywillsolvetheproblemsassociatedwithtransition.”TippingpointForeachoftheseactors,thereisasensethatmomentumisbuildingbutthatthefinancesectorisstillshortofreachinga‘tippingpoint’.Reidisbroadlyoptimistic:“Thefactthattherehavebeennearly200climaterelatedshareholderresolutionsayearintheUSaloneshowsthatthisisincreasinglyimportanttoinvestors.Thatsaid,thereisstillroomforimprovement–especiallyontheUSside.Somereallylargeassetmanagerswithhugeinfluencearesayingtherightthingsbutnotnecessarilyfollowingupwithactions.Theirimpactisdifficulttoassessbecausetheyarehavingconversationswithcompaniesbehindcloseddoors.Ifthesebigplayersgetonboard–includingonkeyvotesonclimate-relatedresolutions–atippingpointmaybereached.”LieschagreedthattheEuropeaninvestorsareleadingtheway,butsaidothersintheUSandAsiawerealsomakinginfluentialmoves.“Therehasbeenquitealotofprogressoverrecentyears.Thereisapackwhoaremoreadvancedandareleadingintermsofambitionandoperationalisation–especiallyinEurope.Wedon’tyethavecommitmentorengagementonclimatefromthewholefinancialmarket.Butforsure,ifyouarecomingfromasectorassociatedwithhighemissionsandyouwanttogetfinancethenincreasinglyyouneedtobeshowingacredibleandrobuststrategyonhowtoreduceemissions.”BothLieschandReidagreedthatjointinvestorinitiativeslikeClimateAction100+,whichisbackedbymorethan370investorswithover$35trillioninassetsundermanagement,arereallyimportant.Reidseesthemas“astrongindicatorofinvestorattitudeandambition”andfullyagreeswithLiesch’sassessmentthattheyarealreadyhaving“animpactintherealeconomy”.AllianzisalsoafoundingmemberoftheUN-convenedNet-ZeroAssetOwnerAlliance,whichmeansitiscommitted,alongwith11otherinstitutionalinvestorswithmorethan2trillionUS-Dollarundermanagementbetweenthem,todecarbonisingitsportfoliosby2020.Lieschexplained:“It’simportantforustobepartofgroupswithlike-mindedclimateambassadorsbecausewecannotdothisalone.Weneedmoreassetownerstoact,andweneedthecompaniesweinvestintogetthemessage.Asinvestors,weallneedtobesayingtothem‘DearCompany,ifyouwantourclients’money,youhavetoshowusthatyouarepreparedforfuturechallenges.’”NewmethodologiesneededtounlockfullpotentialEachoftheintervieweessaidtherewere“methodologygaps”tobeclosed,whichwouldenablemorefar-reaching,transformativeaction.AllianzhavebeenmembersoftheScienceBasedTargetsinitiativesince2018,andarecommittedtosettingtheirowntargetassoonasthemethodologybecomesavailableforfinancialinstitutions.Lieschsaid:“Wecouldalreadysetatargetforourownemissions–forexamplefromheatingandpower–butthechallengeismeasuringandtrackingtheimpactofthebillionsweinvestinothercompanies.WearepartofthegroupwithintheScienceBasedTargetsinitiativethatiscommittedtodevelopingamethodologyforthefinancialsector.”Acompany’scommitmenttotheScienceBasedTargetinitiativeisusefulforus,becauseitshowsthatthedecision-makershavemadeuptheirmind.Theyarealigningthebusinessstrategywithinternationallyacknowledgedclimategoals.""38PartoftheproblemasLieschseesitis,“wedon’tknowhowthetransitionwillplayoutacrossthesectors.”Forhim,partoftheansweristoaskthecompaniesthemselves:“Weneedcompaniestosetouttheirstepstoreducingemissions.Theyknowtheirchallengesandopportunitiesbest.Ourroleistokeepsaying:‘showusyourstrategytodecarbonise.’”LieschandReidbothseethefactthattherearenotmethodologiesforallsectorsasanobstacletototaleconomy-widetransformation.Lieschcitedsovereignbondsasanissue.Investmentsinsovereignbondscurrentlymakeupsignificantsharesinmanyinstitutionalinvestorportfolios,butatthemomentscience-basedtargetscan’tbeusedtoassesstheseentities’planstoreduceemissions.Liesch:“AddressingquestionslikethiscouldbepartofthesecondwaveoftheScienceBasedTargetsinitiative”.Reidagreesthere’smorepotentialfortheinitiativetocontributetothelow-carbontransformationnecessarytopreventrunawayclimatechange.Sheapplaudedtheinitiativeforhavingstartedtheworkafewyearsagotocreatethefirstmethodolo-giesandputtheframeworksinplace.Aswellasdevelopingnewguidanceforothersectors,andadjustinggoalstoalignwith1.5degrees,shealsoseesaneedformoreconcertedandtargetedoutreachtoinvestors,using“theirlanguage,”andhelpingthem“seethevalue,fromaninvestorperspective,ofcallingoncompaniestosetscience-basedtargets.”FitforthefutureBothAllianzandCeresareconvincedofthenecessityofinvestoractioninfacilitatingthetransitiontoagreenerfuture.ForAllianzthisalsooffersnewbusinessopportuni-ties.Liesch:“Weareconvincedthatifweclearlyactontheglobalclimatechangechal-lenge,whichwillaffectindividualsandcompaniesaroundtheworld,wewillearntherespectandtrustofourcustomers,partnersandcolleagues.Weneedtosetclearexpectationsandstateourcommitmenttoinvestwherethefutureisbeingmade.Thissortofchangecan’thappenovernight.Youneedtoprepareforitandgetonboardearly.Webelieveourstrategywillbenefitthecompaniesweinvestin–makingthemfitforthisfuture–andthereforealsotheclientsonwhosebehalfweareinvesting.Ultimately,itwillalsodrivedownemissions,whichinturnwillreduceclimaterisk-akeyconcernforusasaninsurancecompany,andforourclients.”39Itisencouragingtoseemanyfirst-moversintheprivatesectoralignwithcivilsocietyandambitiousGovernmentsbysteppingupinsupportofa1.5°Cfuture.Nowweneedmanymorecompaniestojointhemovement,sendingaclearsignalthatmarketsareshifting.-AntónioGuterres(SecretaryGeneral,UnitedNations)""NEXTSTEPSFORTHEINITIATIVE40EnablingtheinstitutionalisationofSBTsbyexploringthestandardisationofSBTsLoweringthebarriersforambitiousvaluechainactioninlinewiththeParisgoalsIntegratingSBTsmorecloselyintofinancialmarketsProvidingarobustframeworktotrackcompaniesprogressagainsttheirtargetsSupportingtheadoptionofSBTsindevelopingeconomiesCatalysingtheratchetingofprivatesectorandnationaltargetstoalignwith1.5COverthepast5years,theSBTihasmaderemarkableprogresstowardsitsgoalofpromotingscience-basedtarget-settingbycompaniesandintheprocessraisedthebarforambitiouscorporateclimateaction.Yet,astheinfluenceandimpactoftheinitiativegrows,sodoesthescaleofthechallengeahead.Globalemissionscontinuetogrow,progressisunevenacrossregionsandsectors,andforeverycompanythathassetascience-basedtarget,manyremainthathavenot.AstheSBTientersitsnextphase,itwillneedtomeetthesechallengesheadontoensureitisdeliveringthesupporttocompaniesandtheirstakeholdersthatenablesanexponentialgrowthofSBTadoptionandimpact.SomeofthekeyprioritiestheSBTiwillfocusonare:OverthenextyearstheSBTiwillworkcloselywithcompaniesandotherpartnerstodeliverontheseprioritiesandfurthercatalyseleadershipfromtheprivatesectorasitcontinuestoraisethebaronglobalclimateaction.Nextstepsfortheinitiative©ScienceBasedTargetsinitiative2019ScienceBasedTargetsisaninitiativebyincollaborationwith41

1、当您付费下载文档后，您只拥有了使用权限，并不意味着购买了版权，文档只能用于自身使用，不得用于其他商业用途（如 [转卖]进行直接盈利或[编辑后售卖]进行间接盈利）。
2、本站所有内容均由合作方或网友上传，本站不对文档的完整性、权威性及其观点立场正确性做任何保证或承诺！文档内容仅供研究参考，付费前请自行鉴别。
3、如文档内容存在违规，或者侵犯商业秘密、侵犯著作权等，请点击“违规举报”。

碎片内容

碳中和的最新文档