Understanding Emissions Reduction Targets

The first step in most companies' decarbonisation journeys is accurately calculating their emissions baseline. After this, companies look to set emissions reduction targets.

In this blog post, we’ll talk you through the two key types of emissions reduction targets, and the benefits and disadvantages of each approach. We’ll also show you why setting science-based emissions targets is beneficial not just for the planet, but also for business. 

Absolute Vs Intensity-based emissions targets

There are two key types of emissions reduction targets - absolute and intensity-based.  

Absolute emissions reduction targets 

These are targets which focus on reducing your company’s total GHG emissions by a set amount. For example, you might state that you will reduce your emissions by 30% by 2025. 

Going ‘Net zero’ by a given year is an example of an absolute emissions reduction target.

Benefits

Policymakers tend to favour absolute emissions reduction targets for the basic reason that our planet needs a total reduction of GHG emissions. For example, The UK Climate Bill commits the UK to achieving Net Zero by 2050. 

Disadvantages

Absolute emissions reduction targets do not account for the fact that businesses differ hugely, and some are able to reduce their emissions at a much lower cost than others, depending on the sector in which they operate. For example, a high-street law firm will have very different emissions reduction capabilities than a clothing brand which ships its goods internationally. The former’s targets will be largely focused on addressing its Scope 1 and 2 emissions, while the latter will need to address the emissions generated by its entire supply chain. 

Intensity-based emissions targets

These targets compare your company’s emissions to a unit of economic output. They allow businesses to set emissions reduction targets while at the same time accounting for growth. For example, you might state that you will remove 1 metric tonne (MT) of CO₂ per £1 million in sales.

Benefits

Intensity-based emissions targets take into account major business changes such as mergers, sales and acquisitions, which all have an impact on emissions. Some businesses argue that for this reason, they are the only target that makes sense for them - they allow for changes to circumstances without having to reset the goal posts.  

Disadvantages

It’s important to realise that intensity-based targets don’t guarantee absolute emissions reductions. In some cases they allow emissions to grow as a business expands, albeit at a slower rate than if no action was taken. There’s also the argument that if a company’s emissions intensity decreases, while its production volume increases at a more rapid rate, its overall carbon footprint will still increase.

What are science-based targets?

Science-based targets are amongst the most rigorous emissions-reduction targets. They have been created by the Science-Based Targets Initiative (SBTi), a partnership between the Carbon Disclosure Project (CDP), the United Nations Global Compact (UNGC), the World Resources Institute (WRI), and the World Wide Fund for Nature (WWF).

Science-based targets are verified by third parties and need to meet three criteria: 

1. They have a clearly defined emissions reduction goal. 

2. They have a clearly stated baseline amount and target goal date. 

3. They meet the goals of the Paris Agreement which stipulates limiting global warming to <2°C above pre-industrial levels.

To date, more than 400 companies have joined the STBi, approximately 90% of which have specifically set Scope 3 targets for reducing emissions.

Why is setting science-based targets in companies’ best interests? 

Science-based targets are arguably not just good for the planet; they’re beneficial for businesses too. This is because they: 

• Are credible targets which can bolster business reputation 

• Are likely to spur innovation when it comes to implementing emissions reduction

• Can help companies stay ahead of shifting public policies.

To find out more, visit the official STBi website. 

It all starts with an effective baseline measurement

You won’t be able to set targets without an effective calculation of your baseline emissions. If you’re looking for a fast, accurate measurement of your company’s supply chain footprint with insights on your top emitters, why not try Pledge and get started for free?