Science-based targets: Backgrounds, method and examples

Science-based targets Backgrounds, method and examples

Presentation given for the Green Buildings

Council of Australia

3/14/2017

Vincent Hoen, [email protected] and

Jonas Bengtsson, [email protected]

© ECOFYS. A Navigant Company. | |

Australian national action on climate change

3/14/2017 Vincent Hoen, [email protected] and Jonas Bengtsson, [email protected]

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1998 The world’s first government agency dedicated to reducing greenhouse gas

emissions - Australian Greenhouse Office (AGO)

2013 Dismantling of four climate change programs begins and climate change

functions moved into Department of Environment

Source: http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp1516/Climate2015

1976 Australian Academy of Science reports that human activities are likely to contribute to warming

1989 First Australian greenhouse gas emissions reduction proposal submitted to Cabinet

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http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp1516/Climate2015




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1997 Australia signs the Kyoto Protocol

2002 Australia refuses to ratify the Kyoto Protocol

2007 Australia ratifies the Kyoto Protocol








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2003 The world’s first mandatory emission trading scheme - NSW GGAS

2012 Price on carbon comes into effect ($23)

2012 Australia and the EU agree to link ETSs

2014 Price on carbon repealed - Australia becomes the first nation to reverse

action on climate change




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2003 The world’s first mandatory emission trading scheme - NSW GGAS

2012 Price on carbon comes into effect ($23)

2012 Australia and the EU agree to link ETSs

2014 Price on carbon repealed - Australia becomes the first nation to reverse

action on climate change

2001 Mandatory Renewable Energy Target scheme (MRET) starts 10% by 2010

2009 Renewable energy target increased to 20% by 2020 (45,000 GWh)

2015 Renewable energy target adjusted to 23.5% by 2020 (33,000 GWh)

2017 Clean coal back on the agendaSource: http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp1516/Climate2015



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State action on climate change


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NSW sets net-zero carbon emissions goal by 2050 as

Australian pollution climbs

NSW Climate Change Policy Framework, 2016

Victorian Government commits Victoria to going carbon

neutral by 2050

Victoria’s Climate Change Framework, 2016

Queensland Government is exploring options for climate

change mitigation

Advancing Climate Action in Queensland

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At the COP21, 195 countries made the binding agreement to

limit global warming well below 2 °C and pursue efforts

towards 1.5 °C


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> Global absolute emission are still increasing, more

mitigation actions are needed to limit global warming

well below 2 °C and to prevent catastrophic impacts of

climate change

> Staying well below 2 °C implies net zero CO2 emissions

around 2070. Shifting from 2 °C to 1.5 °C even means

net zero CO2 emissions around 2050, which implies

taking action sooner, achieve their targets faster and

scale it bigger (more reductions; more negative

emissions after 2050)

> The Paris Agreement will lead to robust policy

frameworks and huge flows of climate finance to drive

the massive transformation in all sectors, creating risk

and opportunities for companies

Source: Rogelj et al., 2015

Assessment of scientific mitigation scenarios


Science-based targets are targets that are in line with

limiting global warming to well below 2 °C


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> According to IPCC, approximately 1,000 Gigatonnes (Gt) of carbon dioxide (CO2) remains to be

emitted in order to keep global warming well below 2 oC (=global carbon budget, the green surface

in the graph)2.

> This remaining global carbon budget should be allocated over the various industries in a fair and

transparent way. Non-CO2 emissions

2 The global carbon budget is expressed in only CO2 emissions, since the increase of global CO2 is the main contributor to global GHG emissions rise. However in determining the global carbon budget, the reduction of non-CO2 emissions are taken into account as well.

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2010 2020 2030 2040 2050

Annual gre

enhouse g

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issio

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GtC

O2eq/y

r)

Non-CO2 emissions

CO2 emissions

Business As Usual

Global carbon budget

Non-CO2 emissions

CO2 emissions

(Source: modified by Ecofys based on IPCC)


> In a joint effort, CDP, UN Global Compact, WRI and WWF launched the Science Based Targets initiative (www.sciencebasedtargets.org)

> Ecofys was commissioned as consultancy partner to support the development of the

Science-based Targets methodology and accompanying tool

> Goal

To raise the ambition of corporate emission targets,

– to support a transition to a low carbon economy and

– keep the planet below a 2°C temperature rise. Trend: 1.5 degrees strategies.

> Objective

Enable Science-based emission targets in line with the 2°C scenario from the

IPCC to become standard business practice

Initiation of Science-based Targets


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Over 210 companies already committed to

set science-based targets


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Americas

• Avery Dennison

• BanColombia SA

• Coca-Cola Ent., Inc.

• Colgate Palmolive Company

• Dell Inc.

• General Mills Inc.

• Hewlett-Packard

• Host Hotels & Resorts

• Kellogg Company

• Mars

• Novex Delivery Solutions

• NRG Energy

• Procter & Gamble Co.

• Pfizer

• Walmart

• Xerox Co.

Europe

• Acciona S.A.

• Alpro

• Atos SE

• AXA Group

• BT Group

• Carrefour

• Commerzbank AG

• Correos (Grupo Sepi)

• Crédit Agricole

• CNH Industrial NV

• Daimler AG

• Danone

• Diageo

• Eneco

• Enel

• Energias de Portugal

• Ingersoll Rand

• Intern. Post Co.

• Gas Natural Fenosa

• GlaxoSmithKline

Asia

• Aditya Birla Chemicals

• ASICS

• China Steel Co.

• Nissan Motor Co., Ltd.

• Delta electronics

• Honda Motor Company

• Konica Minolta

• Sony Co.

• Toyota Motor Co.

• Yingli Solar

• Kawasaki Kisen Kaisha, Ltd.

Oceania

• Australian Ethical Investment

• Bank Australia

• Infigen Energy

• Origin Energy

• Westpac

South Africa

• Pick ‘n Pay Stores

• Safaricom Ltd.

• Tiger Brands

• Woolworths Holdings

• Groupe SEB

• H&M AB

• IKEA

• L’Oréal

• MVV Energie AG

• National Express Group

• Metro AG

• Nestlé

• Novartis

• Panalpina

• PSA Peugeot Citroen

• PUMA

• Renault

• Royal Philips

• SNCF

• Société Générale

• Sodexo

• Suez Environnement

• Thalys

• Unilever


Inspiration: what do other companies do?


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Company Target Base year

Target year

Swisscom 10% emission reductions for Scope 1100% emission reductions for Scope 218% emission reductions for Scope 3

2013 2020

Capgemini UK PLC 40% emission reductions for Scope 1-3 2014 2030

Autodesk 43% emission reductions for Scope 1-3 2008 2050

Dell 50% emission reductions from facilities and logistics operations 80% reduction of energy intensity of product portfolio

2011 2020

Hewlett Packard Enterprise 25% reductions for Scope 1-2 2015 2025

Host Hotels & Resorts Inc. 28% reductions of emissions per square foot basis for Scope 1-2 2008 2020

International Post Corporation

20% emission reductions for Scope 1-3 2013 2025

PostNord 40% emission reductions for Scope 1-3 2009 2020

Proximus 30% emission reductions for Scope 1-250% emission reductions for Scope 3

2014 2040

Sony 90% emission reductions for Scope 1-3 2008 2050

Mars 25% emission reductions for Scope 1 and 2 by 2015 from a 2007 base year and eliminate these emissions by 2040work on addressing Scope 3 emissions which constitute up to 86% of the company’s GHG footprint

2007 2040

BT Group 80% emission reductions for Scope 1-3 1996 2020


The Science Based Targets Initiative


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Current target setting practices Science-based target setting practices

To support companies in setting science-based targets and to make this common business practice, CDP, UN Global Compact, World Resources Institute (WRI) and WWF launched:

Science Based Targets initiative www.sciencebasedtargets.org

Science-based target setting

> 81% of the Global 500 companies have targets

> Companies have difficulty setting credible and sustainable emission reduction targets

> Common target setting practices: ▪ Bottom-up targets (focus on

incremental change)▪ Targets based on peers▪ Not aligned with science▪ Not full coverage of companies’

emissions▪ Short-term

Source: Mindthescience.sciencebasedtargets.org, 2015

> A long-term vision based on global trends and climate science

> Targets aligned with global growth of population and wealth and with the Paris Agreement to keep global warming well below 2°C

> Targets which allow for decoupling of emissions from economic growth

> Long-term instead of short-term targets

Current target setting practices


> Scope 1&2 boundary: cover company-wide scope 1&2 emissions as required in the GHG Protocol

Corporate Standard

> Timeframe: target year to be between 5 and 15 years from date of announcement

> Level of ambition: all companies should endeavor in efforts to go beyond 2 degrees scenarios in

order to achieve, as per agreement language, “well below 2 degrees”.

> Choice of approach: companies should not default to the “easiest” option, but instead determine

which method best serves both the business and the environment

> Scope 3: ambitious & measurable target with a clear time-frame if scope 3 emissions are

>40% of company’s total scope 1, 2 and 3 footprint

> Scope 3 boundary: include majority of value chain emissions as defined by the GHG Protocol

Corporate Value Chain (scope 3) Accounting and Reporting Standard

> Additional recommendations include:

– Companies are encouraged to also develop long-term goals (e.g. 2050).

– Companies are encouraged to express their targets on an absolute AND intensity basis

Science-based Targets initiative target requirements


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The sectoral decarbonization approach: from climate

science to individual company targets


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For the Science Based Targets initiative a new methodology,

called the Sectoral Decarbonization Approach (SDA) was

developed

There are several reasons why to use the SDA:

> SDA was developed with CDP, WRI and WWF with technical

support of Ecofys and is the most recent and most detailed

method.

> SDA is transparent, well documented, reviewed through an

extensive stakeholder consultation process and published in

Nature Climate Change

> SDA takes into account sectoral differences (i.e. differences in

mitigation potential, mitigation costs and growth)

> SDA is the only method that differentiate between Scope 1

and Scope 2

> SDA will be refined and updated on regular basis and more

and more sector-specific decarbonization pathways will be

added over time (like for agricultural commodities, freight

transport etc.)

Source: www.sciencebasedtargets.org, 2014/2015

http://www.sciencebasedtarget.org/


The SDA methodology is based on a least-cost modelled

2 °C scenario of International Energy Agency (IEA 2DS)


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> The SDA methodology combines sectoral emissions pathways with sectoral activity projections

from IEA 2DS to construct sectoral intensity pathways for homogeneous sectors i.e. Power,

Cement, Iron and Steel, Aluminum, Pulp and Paper, Service Buildings and Passenger Transport.

> For three heterogeneous sectors physical allocation physical allocation is not possible, and absolute

reduction is used to allocate the remainder of the carbon budget. Heterogeneous sectors are

Chemical and Petrochemicals, Other industry and Other transport

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Sectoral breakdown of global carbon budgetService buildings

Other transport

Aviation passenger transport

Rail passenger transport

Heavy road passenger transport

Light road passenger transport

Other industry

Pulp and paper

Chemicals and petrochemicals

Aluminium

Iron and steel

Cement

Power generation

(Source: modified by Ecofys based on IEA, 2014)


SDA methodology uses physical allocation for homogeneous

sectors and absolute allocation for heterogeneous sectors


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Homogeneous sectors

Heterogeneous sectors

Physical allocation:The SDA methodology assumes that the carbon intensity for the companies in all homogeneous sectors tend to converge in 2050. The rate of convergence depends on the differential between the carbon intensity of the company and the 2ºC carbon intensity of the sector in 2050 and the predicted change in market share of the company.

Absolute allocation:For heterogeneous sectors, the SDA methodology is based on the compression of absolute emissions, which means that the absolute emissions of all companies in the sector will be reduced by the same percentages as the sector in the target year.

Source Ecofys, 2015 Sectoral Decarbonization Approach

Based on Sectoral Decarbonization Approach

Source Ecofys, 2015 Sectoral Decarbonization Approach


> GHG emissions inventory based on the GHG protocol or ISO

> Activity growth projections on companies major activities (to be matched

with sectoral decarbonization approach sectors)

> The science-based targets tool available through sciencebasedtargets.org

Applying the SDA, which information is needed to set a

SBT?


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> From 2011 until 2050, XXXXX’s service buildings scope 1 and scope 2 absolute emissions need to decline by xx% to align

with 2°C, equivalent to decreasing carbon intensity by xx%.

A real estate example


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An example of a comprehensive target using several

sectoral decarbonization approach sectors


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2010 Target 2020 Target 2050

kto

n C

O2e

Absolute emission targets

Avoided operational fleetemissionsAvoided administrative fleetemissionsAvoided building emissions

Scope 1 operational fleet

Scope 1 administrative fleet

-40%

-90%

-15% -80%


> The first step is to make high level assumptions of the impact on the energy-use and associated CO2e

emissions of a companies' current plans (e.g. renovation plan, new buildings, demolishing old

buildings, etc.) to give an idea if the current plans are sufficient to meet the science-based target

> If the current emission reduction plans are not sufficient to meet the target, the next step is to

suggest a set of extra abatement measures that the company can take to reduce its CO2e emissions

What do you need to do to achieve science-based

targets level


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2010 2015 2020 2025 2030 2035 2040 2045 2050

SBT

Baseline

Energy reduction current plans

Energy reduction suggested extra measures

CO

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tCO

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Example

output


1. Increase credibility of climate target and get recognition and exposure by NGOs

2. Demonstrate leadership, build on a green reputation to increase stakeholder value and

attract excellent talents

3. Outperform sector peers in benchmarks, increase rating scores and attractiveness for

investors

4. Get long term guidance to steer investments, drive innovation and transform business

practices

5. Save money and increase competitiveness by gaining insight in company performance

and improvement potential

6. Gain insight in required sector transformations and position for upcoming policy

regulations

Key benefits of setting science-based targets


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> Commit to take action

> Establish your targets (and align your climate strategy)

> Get your science-based targets approved

Three simple steps to get an approved

science-based target


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At a glance: Ecofys. A Navigant Company.

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sustainable energy for everyone – since 2016, Ecofys is part of Navigant’s

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Over 600 experts skilled in energy, climate, environment, economy,

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Our strength lies in our strategic understanding of complex energy and climate

transition issues: Ecofys connects the dots within the triangle between

governments, energy players, and (energy-intensive) end-users Copyright in

form

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Berlin, Germany; Brussels, Belgium; London, United Kingdom – as part of

Navigant, our experts are based in more than 20 offices in the US, Hong Kong

and the Middle East

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measure, understand and manage the environmental and social impacts of their

products, services and operations, using best practice based on sound science.

Our services include:

At a glance: Edge Environment


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Science-based targets: Backgrounds, method and examples

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Transcript of Science-based targets: Backgrounds, method and examples