Science Based Targets How does it work...2019/03/19 · science-based target-setting 101 How can I...
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Science Based Targets – How does it work 19-03-2019 An initiative by In collaboration with
Transcript of Science Based Targets How does it work...2019/03/19 · science-based target-setting 101 How can I...
Science Based Targets –How does it
work
19-03-2019
An initiative by In collaboration with
Agenda
• Welcome (Kristina Atkisson/Mats Landen)
• Introduction and update SBTi (Alexander Farsan)
• How to set science based targets (Fernando Villasana)
• General Q&A
An initiative by In collaboration with
Introduction to Science Based Targets
Alexander Farsan
Global Lead – Science Based Targets
19-03-2019
An initiative by In collaboration with
We are already experiencing the negative effects of climate change …
Source: WRI Infographic of IPCC Special Report on 1.5 Degrees, 2018
… and they are worse than expected: “1.5 is the new 2”.
Selected impacts 1.5°C 2.0°C 2°C impacts
Global population
exposed to severe heat
at least once very 5 years
14% 37% 2.6x worse
Number of ice-free artic
summers
At least one every 100
years
At least one every 10
years10x worse
Reduction in maize
harvest in tropics3% 7% 2.3x worse
Further decline in coral
reefs70-90% 99% Up to 29% worse
Decline in marine
fisheries1.5 M tonnes 3 M tonnes 2x worse
The Paris Agreement set the global objective
of limiting global warming to
well below 2ºC
above pre-industrial levels and to pursue
efforts to limit global temperature increase to
1.5ºC
above pre-industrial levels.
7Source: Carbon Tracker Initiative
8
The value chains of 100 companies account
for up to 66% of global GHG emissions Source: CDP Clean and Complete Dataset 2016
9
Easter morning 1900: 5th Avenue, NYC, USA Easter morning 1913: 5th Avenue, NYC, USA
Source: Business Insider
10
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Reduce direct emissions by 60% by 2025 and value chain emissions by 17% by 2030
12Achieve zero carbon emissions at its breweries by 2030
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Reduce direct emissions by 90% and value chain emissions by 40% by 2025
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Reduce direct GHG emissions by 30% by 2030
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Reduce lifecycle emissions for the average product by 70% by 2030
Reduce GHG emissions per kWh from energy production 96% by 2023
17
“GHG emissions reduction targets that are consistent with the level of decarbonization that, according
to climate science, is required to keep global temperature increase within 1.5 to well-below 2ºC
compared to pre-industrial temperature levels”
What are science-based targets?
18
An initiative by:
Develop Promote Validate
500+ companies
~20% of Fortune 500
39 countries
US$10+ trillion
~900 MT CO2e
20
OF COMPANY EXECS HAVE GAINED COMPETITIVE ADVANTAGE FROM SETTING SCIENCE-BASED TARGETS
OF COMPANY EXECS HAVE SEEN THEIR BRAND REPUTATION BOOSTED FROM SETTING SCIENCE-BASED TARGETS
OF COMPANY EXECS SAY SCIENCE-BASED TARGETS DRIVE INNOVATION
OF COMPANY EXECS HAVE SEEN INVESTORS CONFIDENCE BOOSTEDBY SCIENCE-BASED TARGETS
OF COMPANY EXECS HAVE INCREASED REGULATORY RESILIENCE THANKS TO SBTs
OF COMPANY EXECS HAVE SEEN BOTTOM LINE SAVINGS FROM SCIENCE-BASED TARGETS
Why many companies commit to Science Based Targets
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1. Choosing a scenario
What’s the global carbon budget?
2. Allocating the carbon budget
What’s my share?
3. Comparing against your baseline
How much do I need to reduce?
science-based target-setting 101
How can I calculate a science-based target?
22
SBTi Call to Action Guidelines
How do I join the Science Based Targets initiative?
23
KEY 2019 UPDATES
Review of target setting resources and target validation
criteria to enable companies to set 1.5°C aligned targets.
Criteria V4.0 will be published in April 2019 and come into
effect after a six-month grace period.
New target setting resources will be released along with the
new Criteria in April 2019.
- Foundations of SBT setting (scenarios and methods)
- Target-setting tool with new scenarios
- Target-setting manual (step-by-step)
Additional guidance on the current Criteria V3.0 were
published February 2019 (including RE and Scope 3).
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KEY 2019 UPDATES
Raising ambition: Minimum level of ambition for new targets
will be raised from 2°C to well-below 2°C.
Disclosing ambition: In October 2019, the SBTi will make
available on the website the levels of ambition of all approved
targets against temperature goals: 1.5°C, well-below 2°C and
2°C.
Target revalidation: To ensure companies remain aligned with
the most recent climate science, companies will be required to
review, and if necessary revalidate, their targets every five
years from the date of target approval (starting in 2025).
G H
How can companies set science-based targets and which resources are available to support them?
Fernando Villasana
March 19th, 2019
1. Committing to set science-based targets
2. Developing a target
3. Submitting target for validation
4. Announcing the target
5. Q&A
6. Practical exercise
Name| @Twitter
Science-based targets | Agenda
1. Committing to set science-based targets
2. Developing a target
3. Submitting target for validation
4. Announcing the target
5. Q&A
6. Practical exercise
Name| @Twitter
Science-based targets | Agenda
Name | @Twitter
• Submit a sector-specific commitment letter to the initiative
• Company to receive communications welcome pack about
publishing commitment
• Company has 2 years to develop and submit a SBT
Science-based targets | Step 1: Commit to set a science-based target
1. Committing to set science-based targets
2. Developing a target
3. Submitting target for validation
4. Announcing the target
5. Q&A
6. Practical exercise
Name| @Twitter
Science-based targets | Agenda
Science-based targets | Step 2: Develop a target
• Pre-requisite: companies must have a full scope 1 and 2 inventory and at least a screening level scope 3 inventory• Use recognized GHG accounting principles/standards (GHGP, S2 Guidance, S3 Standard etc)
• Consult available SBTi resources• C2A Guidelines
• Target Setting Manual
• SBTi Criteria and Recommendations
• Methods and tools
• Target validation Protocol
Science-based targets | Step 2: Develop a targetSB
Ti C
rite
ria
This slide represents a summary and not a comprehensive overview. Please refer to the SBTi website for the full criteria and recommendations.
SBTi Criteria and Recommendations
Science-based target
• IEA 2DS• IEA B2DS• RCP 2.6• IAMC 1.5ºC ensemble (new)
• Absolute contraction• Sector based approach• Economic intensity
• Sector & geographical spread• Projected growth• Initial carbon intensity
Select the emissions pathway SBT approaches Company profile
Choosing a scenario What’s the global carbon budget?
Allocating the carbon budget What’s my share?
Comparing against your baselineHow much do I need to reduce?
Science-based targets | Step 2: Develop a target
Total carbon budget
Remaining carbon
budget
Historical
cumulative
emissions
2000 2010 2050
Area under the curve = carbon
budget (cumulative emissions)
Curve = Annual net carbon emissions (emissions
trajectory)
Science-based targets | Step 2: Develop a target
Choosing a scenario What’s the global carbon budget?
Understanding 1.5ºC and 2ºC emissions trajectories…
Science-based targets | Step 2: Develop a target
Choosing a scenario What’s the global carbon budget?
A) Sector based
approach
Convergence: The carbon intensity for all
companies (within the same level of disaggregation)
converges towards the same level at a rate that
considers the initial carbon intensity of the company
and its relative growth.
Based on sector-specific carbon budgets
determined by mitigation/technology
options and activity projections.
B) Absolute based approach
Contraction: Regardless of industry/growth, all
companies reduce emissions by the same absolute
percentage.
Based on absolute emissions reductions
determined in in IPCC 5th AR/1.5 SR
C) Economic intensity reduction
Forecast based on global carbon credits
and global economic growth
Contraction: The company reduces its carbon
emissions per unit of economic activity based on
GDP growth projections and global carbon budget.
Currently only accepted for Scope 3 emissions.
Science-based targets | Step 2: Develop a target
SBTi
acc
ep
ted
allo
cati
on
met
ho
ds
Allocating the carbon budget What’s my share?
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
2010 2020 2030 2040 2050
Em
issio
ns (
MtC
O2
)
Year
Sectoral breakdown of absolute CO2 emissions budget*
Services / Commercial Buildings
Other transport
Passenger transport - Rail
Passenger transport - Heavy Road
Passenger transport - Light Road
Passenger transport - Air
Other Industry
Pulp & Paper
Aluminium
Chemical and Petrochemical Industry
Cement
Iron & Steel Industry
Power Generation
* Based on the IEA Energy Technology Pathways (ETP) 2016/2017
Science-based targets | Step 2: Develop a target
Convergence
2010 2020 2030 2040 2050
Ab
so
lute
Em
iss
ion
s
Year
Company A
Company B
Company C
Company D
Contraction
Approach 1: Intensity convergence
Company targets are expected to converge or compress with their sector by 2050
• homogeneous sectors
• share of the activity
• base year intensity
• heterogeneous sectors
• equal % reductions
2010 2020 2030 2040 2050
Em
iss
ion
s In
ten
sit
y
Year
Company A
Company B
Sector
Company C
Science-based targets | Step 2: Develop a target
Approach 2: Absolute Contraction
All companies must reduce their absolute emissions
at least 49% by 2050 from 2010 levels. This results in
a linear annual reductions of at least 1.23%/year over
the target period
Comparing against your baselineHow much do I need to reduce?
What’s my baseline carbon footprint?
What’s my baseline carbon intensity?
Where in my value chain are emission hotspots?
Across which sectors do my activities spread?
How much will my business grow?
Science-based targets | Step 2: Develop a target
Science-based targets | Step 2: Develop a target
Name| @Twitter
Please review all our SBTi Criteria and Recommendations
About Scope 3 ambition
• Scope 3 targets should clearly demonstrate how the company is addressing the main sources of GHG emissions within their value chain in line with current best practice.
Best practices:
• Absolute emission reduction targets in line with the decarbonization level required to keep global temperature increase below 2°C (i.e. absolute contraction approach).
• Physical or economic emissions intensity reductions consistent with the decarbonization level required to keep global temperature increase below 2°C (Sectoral Decarbonization Approach or GEVA).
• Other targets will be considered if the company can demonstrate that the target is ambitious and does not result in absolute emissions growth.
Science-based targets | Step 2: Develop a target
• Choose an appropriate target setting method:
• Sector-based approach
• Sectoral Decarbonization Approach (paper)
• SDA Excel tool
• SDA Transport tool
• SDA tool for OEMs (just published!)
• Absolute-based approach
• SBT tool (to be published)
• Economic-based approach
• SBT tool (to be published)
Under development:
O&G, Chemicals, Apparel, Finance, etc.
Other sectoral target setting tools can be
proposed by following the:
Sector Development Framework
1. Committing to set science-based targets
2. Developing a target
3. Submitting target for validation
4. Announcing the target
5. Q&A
6. Practical exercise
Name| @Twitter
Science-based targets | Agenda
Submission Data Validation Process Reporting and Tracking
A) Target Reception: Screening and
assignment of validation team
B) Validation & Approval
- Peer reviewed auditing process
- Contact with company
- TWG discussion
C) Communication
- Finalise target wording
- Communicate decision and feedback
- Publish targets and their level of ambition
Science-based targets | Step 3: Submit your target for validation
Science-based targets | Step 3: Submit your target for validation
Name| @Twitter
• Preliminary and official validation
• New submissions
• Initial screening of target submission
• 2 target assessments (1 preliminary and 1 official or 2 official validations)
• Comprehensive target validation report and written decision letter
• Commitment to 30 business days turnaround
• 60 minutes of feedback conversations
• 5.000 USD for a new submission
• Resubmissions
• 1 target assessment (either preliminary or official)
• 2.500 USD for a resubmission
Science-based targets | Step 3: Submit your target for validation
Target submission
Initial screening, assignment
Desk Review LR+AA
TVT/TWG discussion
Feedback/ decision
letterFeedback call
Internal admin/operational perspective
1. Committing to set science-based targets
2. Developing a target
3. Submitting target for validation
4. Announcing the target
5. Q&A
6. Practical exercise
Name| @Twitter
Science-based targets | Agenda
Science-based targets | Step 4: Announce the target
ABC commits to reduce its absolute Scope 1 and 2 GHG emissions 35% by 2033
from a 2010 base-year. The company also commits to reduce its product use phase
GHG emissions per vehicle kilometer 42% by 2033 from a 2010 base-year.
Target for scope 1&2 emissions
Level of reduction
Base-year Target-year
Scope 3 target
Main elements for formulating a target wording
Science-based targets | Step 4: Announce the target
Name| @Twitter
Science-based targets | Step 4: Announce the target
Name| @Twitter
SBTs Define Corporate Climate Leadership
SBTs communicate leadership and strategic planning for a carbon
constrained world by:
• Future-proofing growth in the face of physical / political / regulatory /
financial risk
• Demonstrating to policy makers/regulators/investors that the
company’s long-term growth is sustainable
• Challenging other companies to transform their business and help
create and prepare for a low-carbon economy
1. Committing to set science-based targets
2. Developing a target
3. Submitting target for validation
4. Announcing the target
5. Q&A
6. Practical exercise
Name| @Twitter
Science-based targets | Agenda
Name| @Twitter
Q&A
(5 mins)
1. Committing to set science-based targets
2. Developing a target
3. Submitting target for validation
4. Announcing the target
5. Q&A
6. Practical exercise
Name| @Twitter
Science-based targets | Agenda
Name| @Twitter
Target setting example #1:
Service/Commercial buildings
The West-Bestern hotel wants to set an emissions reduction
target. As their sustainability manager you have access to the
following data:
• GHG inventory for year 2018
• GHG verification report
• Latest responses to CDP climate questionnaire
• Energy efficiency management plan
• Copy of RE100 commitment
• Presentation for investors with growth projections until 2030
(confidential)
Sector Hospitality
Floor area: 10,000,000 m2
Expected annual
growth rate (linear)5 %
Total emissions 4,000,000 tCO2e
Scope 1 400,000 tCO2e
Scope 2 1,300,000 tCO2e
Scope 3 2,300,000 tCO2e
Data summaryProject: Iced-Hotel
Let’s calculate a science based target and draft the target wording
SDA Excel Tool
0,00
200000,00
400000,00
600000,00
800000,00
1000000,00
1200000,00
1400000,00
1600000,00
1800000,00
2010 2020 2030 2040 2050
Ab
solu
te S
cop
e 1+
2 E
mis
sio
ns
(tC
O2e
)
Year
Scope 1 + Scope 2 Absolute Emissions (Company)
Scope 2 Emissions
Scope 1 Emissions
16,24
0,00
5,00
10,00
15,00
20,00
25,00
30,00
35,00
40,00
45,00
2010 2015 2020 2025 2030 2035 2040 2045 2050
Sco
pe
1 in
ten
sity
Year
Scope 1 - Carbon Intensity
Company
Sector
Target
42,09
0,00
20,00
40,00
60,00
80,00
100,00
120,00
140,00
2010 2015 2020 2025 2030 2035 2040 2045 2050S
cop
e 2
inte
nsi
tyYear
Scope 2 - Carbon Intensity
Company
Sector
Target
Scope 3 (2018) 2,300,000 tCO2e
Scope 3 (2030) 1,960,520 tCO2e
%Reduction ~14.76%
𝐸𝑇𝑦 = 𝐸𝐵𝑦 × 1 − (𝑇𝑦 − 𝐵𝑦) × 1.23%
What about Scope 3 emissions?
“West Bestern hotels commits to reduce its absolute Scope 1 and 2
emissions 32% by 2030 from a 2018 base-year.
West Bestern hotels also commits to reduce its absolute Scope 3
emissions 15% by 2030 from a 2018 base-year.
Name| @Twitter
Target setting example #2:
Light duty-vehicle manufacturer
Sample target setting for an OEM
Vehicle categoryWTW
CO2 Intensity(gCO2/vkm)
Average ageof vehicle
(years)
Averagetravel
per vehicle(vkm/year)*
Sales
Light duty vehicles 250 15 12,000 100,000
SUVs’R Us is a small automaker having a portfolio of light duty vehicles. They want to set an ambitious
decarbonization target for manufacturing and use of sold products emissions. Company data for the year
2015 is summarized as follows:
(*) ABC has grown at 2% annually since 2010. The company expects to maintain this growth ratethrough the target year.
Scope 1 30,000 tCO2e
Scope 2 70,000 tCO2e
New: Tool for Automakers (Scopes 1&2)
S1 target
0,00
50,00
100,00
150,00
200,00
250,00
300,00
350,00
2010 2020 2030 2040 2050
kC
O2/v
ehic
le
Carbon intensity (B2DS) | Scope 1
Company S1 carbon intensitySector S1 carbon intensityS1 target
S1&S2 target
0,00
200,00
400,00
600,00
800,00
1 000,00
1 200,00
2010 2020 2030 2040 2050
kC
O2/v
ehic
le
Carbon intensity (B2DS) | Scopes 1 & Scope 2
Company S1&S2 carbon intensitySector S1&S2 carbon intensityS1&S2 target
S2 target
-100,00
0,00
100,00
200,00
300,00
400,00
500,00
600,00
700,00
800,00
2010 2020 2030 2040 2050
kC
O2/v
ehic
le
Carbon intensity (B2DS) | Scope 2
Company S2 carbon intensitySector S2 carbon intensityS2 target
Sectoral Decarbonization ApproachBase year
2015
Target year
2030
% Reduction
2015 - 2030
Vehicle manufacturing (PLDV)
Scope 1 carbon intensity kgCO2/vehicle 300.00 154.27 48.58%
Scope 2 carbon intensity kgCO2/vehicle 700.00 235.75 66.32%
Scope 1 & Scope 2 carbon
intensitykgCO2/vehicle 1,000.00 390.10 60.99%
2
3
1 Select which type of
emissions you want to
model
Select one relevant
transport/vehicle
category
Start with your data
summary and fill in the
required fields
Transport tool interface
Dropdown menu
SDA Transport Tool
(*) The SDA Transport tool can also provide an indicative target for fuel economy (expressed
in lge per 100 vkm for information purposes. The SBTi only accepts emission reduction
targets.
“SUVs’R Us commits to reduce its Scope 1 and 2 emissions 61% per
manufactured light-duty vehicle by 2030 from a 2015 base-year.
SUVs’R Us also commits to reduce its product use phase GHG
emissions per vehicle kilometer 53% by 2030 from a 2015 base-year.
G H
Fernando Rangel Villasana
Senior Technical Manager, SBT
@green_fer
Thank you!
www.sciencebasedtargets.org [email protected]
Fernando Rangel Villasana
Senior Technical Manager, SBT
@green_fer
Contact:
