What are science based targets and how do they work?
The Science Based Targets initiative (SBTi) is a partnership between CDP, the United Nations Global Compact, World Resources Institute and the World Wide Fund for Nature; the SBTi call to action is one of the We Mean Business Coalition commitments. Science based targets provide companies with a clearly defined path to reduce emissions in line with the Paris Agreement goals of limiting global warming to well below 2 °C above pre-industrial levels, and pursuing efforts to limit warming to 1.5 °C. This will help accelerate the transition to a decarbonized economy and avoid the worst effects of climate change. As recently announced at COP26, almost 90% of global emissions are now covered by a zero emissions target in force or under discussion (+68% compared to Oct. 31). According to the SBTi, over 2,300 companies have set or committed to setting a science based target and almost 1,100 of them have had their targets approved.
Science based targets and zero emissions: why should companies set sustainability targets and create initiatives
The Net-Zero emissions meaning has many implications for companies. By using science based targets to set scientifically validated GHG emission reduction targets for themselves, they can contribute to the global fight against climate change. However science-based target setting is not only good for the environment, it is also good for the bottom line: it future-proofs growth, adding brand value and improving reputation, meeting consumer demands, saving money and increasing efficiency, providing resilience against regulation, boosting competitive advantage when it comes to performance on the stock market, accessing capital and winning tenders, attracting valuable talent and creating new opportunities; finally it increases brand value by showing increasingly conscious customers and consumers that the company is making concrete commitments to sustainability.
As well, the CDP reported that supply chain or Scope 3 emissions are on average 11 times higher than a company’s operational emissions, and that suppliers that report to their customers through the CDP have cut over six billion metric tons of CO2, saving US$33 billion. Engaging with suppliers is therefore essential to meet decarbonization targets, and there is a tangible business benefit for suppliers to help customers in reporting their Scope 3 emissions. Enel X can help companies and their suppliers make this opportunity happen.
Why is it important to disclose progress on science based targets annually through the CDP?
By reporting environmental data through the CDP, businesses can gain a competitive advantage. Disclosure helps commercial & industrial players get ahead of regulatory and policy changes, identify and tackle growing risks, and find new opportunities for action on sustainability and decarbonization that investors and customers worldwide are expecting. Market demand for environmental disclosure through the CDP is high and growing. For instance, 590 investors with over US$110 trillion in assets and over 200 large purchasers with over US$5.5 trillion in procurement spending are requesting thousands of companies to disclose their environmental data through the CDP.
In addition, there are tangible business benefits to be gained from responding to stakeholder requests for disclosure to the CDP. These include:
Being fully aligned with the best-practice recommendations of the Task Force on Climate-related Financial Disclosures’ (TCFD);
Being prepared for likely mandatory environmental reporting rules;
Identifying emerging environmental risks and opportunities that would otherwise be overlooked;
Tracking and benchmarking progress across sectors, and receiving feedback on that progress on a yearly basis.
Disclosure is also a good way to increase investor confidence and boost brand reputation. This is because while climate change is a globally recognized threat, it is also a vast commercial opportunity: investors and consumers are rewarding companies that take steps to disclose, manage and reduce their GHG emissions. Corporate initiatives such as investing in sustainable new technologies and switching to sustainable business models in order to reach the zero emissions goal are creating value, according to the UN.
We are experiencing an environmental and industrial revolution. Global warming is real and critical for individuals and businesses. Concrete actions are needed to reduce emissions and save our planet. To fight this enemy, we need to understand every single detail about it.
Head of Customer Insights solutions at Enel X
Enel X strategies for companies to reduce GHG emissions
Enel X can help companies define and set a decarbonization strategy, developing and implementing a roadmap to decarbonize their entire value chains. The roadmap can include measuring and understanding their environmental impact by reporting direct (Scope 1) and indirect (Scope 2 and 3) emissions. Ways to decarbonize include electrifying their consumption and e-Mobility solutions, such as the electrification of company vehicle fleets. As well, Enel X can help customers optimize their energy usage in an ongoing manner by providing consulting services on renewable energy purchasing and implementing renewable energy solutions and distributed energy resources (DERs).
Enel X can assist companies in decarbonizing their supply chain by:
Identifying and prioritizing areas that contribute the most to Scope 3 emissions;
Devising an ambitious plan and assigning clear responsibilities for goals and activities through the supply chain;
Helping their suppliers make progress rather than just relying on them to do so;
Setting a clear budget to achieve success;
Monitoring supply chain progress and tracking results.
All of these products and services are designed to assist customers in becoming energy efficient, reducing their emissions and achieving their sustainability goals. This offer fits in with the Enel X commitment to delivering sustainable and renewable energy everywhere in order to accelerate the energy transition to a zero emissions future. In addition, Enel X has joined the CDP as a Gold Accredited Solutions Provider. The two entities are now working together to support businesses in reducing their carbon footprint in order to help keep the planet habitable. Enel X is at the forefront of the battle for sustainability and against climate change: setting science based targets is one way in which science and business can work together to preserve our world for future generations.
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