As world leaders meet in Madrid this week, with one year left until countries are expected to submit enhanced climate targets to keep the Paris Agreement on track, a significant portion of the private sector is already delivering on the 2015 global climate accord. 285 companies responsible for more than 752 million metric tons of CO2 equivalent emissions per year from their operations—more than the combined annual emissions of France and Spain—have set greenhouse gas emissions reduction targets in line with what science says is required to avert dangerous climate change and meet the goals of the Paris Agreement. 76 of these companies’ goals are in line with limiting warming to 1.5°C above pre-industrial levels.
A new report published on 4 december by the Science Based Targets initiative (SBTi) reveals that by meeting their targets, these 285 companies will reduce their emissions by 265 million metric tons of CO2 equivalent, approximately equivalent to shutting down 68 coal-fired power plants. This represents a 35% reduction in companies’ emissions compared to their base year emissions.
“These companies are at the vanguard in the fight against climate change. They are proof that acting on climate science goes hand-in-hand with a successful business and economy,” said Alexander Farsan, Global Lead for science-based targets at WWF, one of the SBTi partners. “Every company in every sector must step up and reduce their emissions in line with what science says is needed, or risk being left behind in a changing world.”
The report “Raising the Bar: Exploring the Science Based Target initiative’s progress in driving ambitious climate action,” is the first-ever assessment of the initiative’s impact since its launch in 2015.
Other key findings from the report include:
- The 285 companies that have set science-based targets will drive investment of up to USD$18 billion in climate change mitigation and spur up to 90 TWh of annual renewable electricity generation, enough to power 11 million U.S. households for a year.
- In addition to setting science-based targets for their operations (which includes on-site emissions and emissions from purchased energy), more than 90% of the 285 companies have also set ambitious emissions reduction targets for their value chains emissions, which make up 3.9 billion metric tons of CO2 equivalent emissions per year — roughly equivalent to 90% of the European Union’s annual emissions.
- Science-based targets are becoming standard business practice in some geographies and sectors. More than 20% of high-impact companies in the following sectors have set science-based targets: apparel, biotechnology, food and beverage, healthcare, hospitality, information technology, pharmaceuticals and telecommunications.
- First-movers from high-emitting industries like cement, steel, chemicals and automobiles are having their science-based targets approved. Among the trailblazers are thyssenkrupp AG, Royal DSM and HeidelbergCement.
- At least 20% of high-impact companies headquartered in several large developed markets, including Finland, France, Denmark and Japan, are setting science-based targets.
- Japan is the first country to provide explicit government support for companies to set science-based targets. As of October 31, 2019, there are 52 Japanese companies with approved targets, and the Japanese Ministry of Environment has set a goal of 100 Japanese companies with approved targets by 2020.
- With the notable exception of India, which counts nine companies with approved science-based targets, only a few companies in emerging markets have set science-based targets. Companies headquartered in non-OECD countries make up only 6% of companies with approved targets.
The private sector’s uptake of science-based targets sends a clear signal that the transition to a low-carbon economy is underway. Business action provides a foundation for governments to set more ambitious policies and regulations. However, companies rely on governments to create the right conditions, policies and incentives to drive the rapid transformation needed and help businesses to accelerate their climate action across all sectors and geographies.
The Science Based Targets initiative (SBTi) is a collaboration between CDP, the United Nations Global Compact, World Resources Institute (WRI) and World Wide Fund for Nature (WWF). The initiative uses the latest available climate science to define best practice in science-based target setting, offers resources and guidance to reduce barriers to adoption, and independently assesses companies’ targets against its validation criteria.
More than 680 companies in total have made a commitment to set science-based targets since the SBTi started in 2015. Once they have made a commitment, companies have 24 months to develop and submit their targets to the initiative for validation.