Taking your first steps with SBTi & setting Science-Based Targets

We’ve talked about the modern pressures companies are facing to report and act on environmental issues in our previous insight articles. With a global backdrop of increasing temperatures, droughts, wildfires and loss of diverse wildlife habitats, organisations today are facing renewed pressures from a variety of groups including investors, shareholders, customers, suppliers and even governments; not just to report but to act and deliver on climate goals.

How organisations plan to meet these goals will be specific to sector and location but what is clear is that companies who are publicly committing to Science Based Targets (SBTs) are in a much stronger position to act on and meet their climate goals, while at the same time satisfying their various stakeholder groups.

What are Science-Based Targets?

Science Based Targets (SBTs) are corporate climate targets based on scientific information in line with the Paris Climate Agreement and COP26 climate goals of limiting global warming to well below 2oC and for emissions to be Net Zero by 2050. In simple terms, if an organisation’s targets meet these requirements then it is known as a ‘Science Based Target’.

SBTs encourage an introspective look at your organisation and can help you do your bit for people and the planet. The Science Based Targets Initiative (SBTi) can help you stay on track with your targets.

The SBTi is a coalition between CDP, World Resources Institute, the WWF and the UN Global Compact. It’s designed to help companies set targets and work towards a net-zero future. Science Based Targets not only need to meet the Paris Climate Agreement and COP26 climate goals but also need to be:

  • Supported by analytical evidence that clearly outlines how the target is achievable
  • Demonstrable and measurable so you can track progress towards climate goals
  • Supported by clear, analytical rationale as to why the target has been set, supported by data on the probability of success

Setting a Science-Based Target 

According to the SBTi there are five initial steps an organisation needs to take when setting SBTs:

  • Commit: submit a letter establishing intent to set a Science Based target
  • Develop: work on an emissions reduction target in line with the criteria
  • Submit: present targets to the SBTi for official validation
  • Communicate: announce your target and inform your stakeholders
  • Disclose: report company-wide emissions and track target progress annually

Why set Science Based Targets?

As with ESG and its three core pillars, there are obvious benefits for organisations that pay attention to their environmental impact and there is no exception when it comes to setting and working toward SBTs:

Attract investors, satisfy stakeholders and reduce risk.

Investors are increasingly attracted to organisations with strong and quantifiable environmental strategies that can showcase sustainable, low risk business practices. A 2019 White Paper by the Morgan Stanley Institute for Sustainable Investing found that investors are increasingly recognising a positive relationship between all aspects of ESG and business performance so managing your environmental factors has never been more important from an investment point of view.

Appeal to your customer base 

The 2021 Global Sustainability Study by Kucher and Partners found that 85% of consumers have made an effort to become greener in the past five years. Consumer awareness on environmental issues is only likely to increase in the coming years and with that there will be a growth in demand for environmentally-friendly businesses, so setting targets will ensure you’re not left behind.

Drive innovation

As investors and consumers become more engaged with the environmental impact of the organisations they deal with, there’s a need for greater transparency. Setting SBTs and creating a sustainability strategy will give people confidence about the future of your organisation and can also help you mitigate risk and discover opportunities for innovation.

Save costs

Setting SBTs can help your business save money. There are potential cost savings from obvious things like replacing a reliance on costly fossil fuels with a cheaper, renewable alternative as well as less obvious savings that may come from innovation or changes led by tracking and reporting data. That’s not to mention the possibility of avoiding fines for failing to act within certain environmental frameworks, which all depend on your sector and location.

Create a happy and productive workforce

A study by Marsh & McLennan found that companies with strong environmental and social focuses were more appealing to the Millennial and Gen Z generations (who will make up 72% of the workforce by 2029). Research also shows that a satisfied and valued workforce will work harder and stay longer, so setting SBTs could contribute to improved staff performance and retention.

Make a positive impact

As well a host of business benefits, one of the most undeniable benefits of committing to SBTs is feeling confident that you’re doing your part in protecting the planet.

How to get started

The goals you set should be guided by an initial collection of data on your organisation’s activities and impact, which is most likely to take the form of a materiality assessment. You can use this assessment alongside internal and external stakeholder engagement to guide your policies and targets.

Once you’re ready to start implementing Science Based Targets within your business, you’ll need to ensure you have a suitable tracking system in place to gather the figures and statistics you’ll need to plot your progress, provide analytical data and guide your decision making as you progress toward your climate goals.

That’s where our platform, Sustainion, can help. The system enables you to track and report your performance, producing real data in real-time and allowing you to monitor your long-term progress as well as any short-term goals you might have in place. Tracking short-term goals can be critical to your long-term success as you can quickly spot opportunities and areas for improvement and make changes along the way.

Although forming effective SBTs isn’t easy, it is undoubtedly worthwhile for your business. From workforce satisfaction to investor appeal and business growth, there are many clear advantages to setting targets.

The key to successfully implementing these targets is having the right tracking system in place and focusing on the data that is important to you, your business and your specific goals.

At Turnkey, we can help you start your SBT journey using our vast ESG experience to guide you through the process. We can work with you and your key stakeholders to uncover the data your business needs to be focusing on for an effective SBT strategy. What’s more, we can walk you through the best ways to track this data and make sense of it using our intuitive technology platform.

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Environmental, Social & Governance (ESG) Tracking & Metrics – A Better Way Forward

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