Decarbonisation Journey

Set decarbonisation targets

Set emissions reduction targets for your company and entire value chain.

Introduction

Reduction targets as the basis for corporate decarbonisation strategies

Setting decarbonisation targets is the core component of any climate or decarbonisation strategy. It is imperative for companies to be guided by the globally agreed 2°C limit when setting their own specific reduction targets for greenhouse gas emissions. Decarbonisation target settings means that a company collected and measured all data for at least one year to calculate the 'baseline year of emissions'. In fact, the emissions baseline is a necessary prerequisite to setting science-based targets.

Setting company-wide decarbonisation targets is a rather complex step that requires gaining a deep understanding of the different decarbonisation pathways and options to set targets. It involves aligning and convincing a variety of stakeholders to be able to count on their backing for any change to be implemented during the subsequent stage of reducing emissions.

Building the case for climate targets

Uncertainty on where to begin and how to build the business case for climate target setting.

Lack of data and reporting

In some cases, companies do not have access to the compound annual growth rate (CAGR) metric to measure the predicted growth of the company, by revenue or employee count. This makes it extremely difficult to define targets.

Limited support from appropriate stakeholders

Limited access to C-level or decision-makers to drive and approve the project. Also, companies’ policies around sustainability are often unclear and lack guidance or ownership.

Long decarbonisation target timelines

Usually, companies set net-zero targets for the year 2040, 2050, and beyond. These long timelines makes it difficult to keep the project running, considering employee and C-level turnover. The challenge is how to keep the project running even while the person in charge changes.

Fear of not delivering

Other challenges include budgetary issues, fear of failure, and lack of internal alignment.

Inadequate target implementation

Once an organisation has set a goal, they also face challenges with implementation, with many citing the lack of a clear plan for action as a significant blocker.

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Score higher on ESG reporting

Companies that do have net-zero targets scored better on emissions and disclosure criteria if they also have interim goals before 2040.

Improve brand reputation

As consumers become increasingly aware of the effects their choices have on the environment, and ethical consumption continues to grow as a hot topic, a brand’s reputation for sustainability is of paramount importance. Indeed, 79% of corporate executives surveyed by SBTi found a strengthened brand reputation to be one of the most significant business benefits experienced after publicly setting science-based targets.

Boost your competitive advantage

Ensure that your company gains an edge when it comes to stock market performance, access to capital, and winning tenders.

Identify reduction opportunities

Cultivating reduction efforts at an organisation often leads to the identification of additional reduction opportunities.

Gain buy-in from upper management

Help garner senior management attention and increase funding for internal GHG reduction projects.

Target setting drives innovation

Deloitte has analysed the relationship between sustainability and innovation, concluding that sustainability drives innovation in a very significant way. As a result, sustainability leaders are now more than 400% more likely to be considered “innovation leaders” than their counterparts. Decarbonisation target setting encourages innovation as it allows a complete disruption of a company's operations to reduce emissions.

Stay ahead of regulatory shifts

Improve a company’s competitive positioning and compliance. Regulations regarding business climate action are here and the regulatory landscape is dynamic. Get ahead of the curve and set science-based targets that power your sustainability goals.

Increase customer loyalty

Demonstrating concrete sustainability commitments to increasingly-conscious consumers is a sure way to show your consumers that you are serious about building a sustainable future. In fact, The Capgemini Report found that 77% of consumer products and retail organisations found that sustainability leads to increases in customer loyalty.

Talent retention

Improve employee engagement, and help in the recruiting and retention of qualified employees. Deloitte report found up to 50% reduction in turnover intention from employer's with a comprehensive sustainability strategy.