Carbon Accounting Guide

Setting Carbon Reduction Targets: A Path to Sustainability

Summary

Setting carbon reduction targets is a critical step for organisations aiming to address their climate impact and contribute to global sustainability efforts. These targets not only demonstrate a company’s commitment to reducing greenhouse gas (GHG) emissions but also provide a clear roadmap for achieving long-term sustainability goals. This guide explains how to set reduction targets, the types of targets available, and best practices for success.

Why Are Carbon Reduction Targets Important?

Carbon reduction targets are essential for organisations to:

• Align with global goals: Contribute to limiting global warming to 1.5°C, as outlined in the Paris Agreement.
• Enhance resilience: Prepare for regulatory, market, and stakeholder pressures as climate change mitigation becomes a priority.
• Drive efficiency: Identify opportunities to reduce costs through energy efficiency and resource optimisation.
• Boost reputation: Demonstrate leadership in sustainability and attract environmentally conscious customers and investors.

Types of Carbon Reduction Targets

1. Absolute Reduction Targets

Absolute targets involve reducing total GHG emissions by a specific amount, regardless of business growth. These targets are aligned with global climate goals and are expressed as a percentage reduction from a baseline year.

• Example: Reduce absolute GHG emissions by 50% by 2030 compared to 2018 levels.

2. Intensity Reduction Targets

Intensity targets focus on reducing emissions relative to a specific unit of output, such as revenue, production, or full-time employees. These are useful for growing organisations but may not lead to overall emissions reductions.

• Example: Reduce emissions intensity by 30% per unit of revenue by 2030.

3. Net-Zero Targets

Net-zero targets require reducing GHG emissions as much as possible first, then balancing any remaining emissions with permanent carbon removals, achieving a net climate-neutral impact.

• Example: Achieve net-zero emissions by 2050.

4. Science-Based Targets

Science-based targets align with the latest climate science to ensure a company’s emissions reductions are consistent with limiting global warming to 1.5°C or well below 2°C.

• Example: Commit to a 42% absolute reduction in GHG emissions by 2030 (aligned with a 1.5°C pathway).

Steps to Setting Reduction Targets

1. Establish a Baseline

Conduct a GHG inventory to measure your organisation’s current emissions. This baseline year will serve as a reference point for future reductions.

• Include all relevant emissions across Scope 1, Scope 2, and Scope 3.
• Use reliable data sources and emissions factors to ensure accuracy.

2. Define the Scope of the Target

Determine whether your targets will focus on specific emissions scopes or the entire value chain.

• Scope 1 and 2: Essential for operational emissions.
• Scope 3: Crucial for organisations with significant value chain emissions.

3. Set a Target Year

Choose a realistic timeframe for achieving your reduction goals. Short-term targets (e.g., 2030) drive immediate action, while long-term goals (e.g., 2050) align with broader climate commitments.

4. Select the Type of Target

Decide whether an absolute, intensity, or science-based target best suits your organisation’s needs. Science-based targets are often preferred for credibility and alignment with global climate goals.

5. Develop an Action Plan

Outline specific actions to reduce emissions and achieve your targets. These might include:

• Transitioning to renewable energy.
• Improving energy efficiency in operations.
• Engaging suppliers to reduce Scope 3 emissions.
• Investing in low-carbon technologies.

6. Monitor and Report Progress

Regularly track emissions to measure progress against your targets. Use tools and platforms to simplify reporting and ensure transparency with stakeholders.

Best Practices for Success

• Make targets ambitious but achievable: Balance your organisation’s capacity for change with the need for meaningful impact.
• Engage stakeholders: Collaborate with employees, suppliers, and customers to implement reduction strategies.
• Communicate transparently: Share your goals, progress, and challenges to build trust and accountability.
• Leverage frameworks and standards: Use tools like the Science-Based Targets initiative (SBTi) or the GHG Protocol to ensure credibility.

Conclusion

Setting carbon reduction targets is a powerful way for organisations to take responsibility for their climate impact and contribute to a sustainable future. Whether through absolute reductions, intensity goals, or science-based targets, every step toward emissions reduction brings us closer to a healthier planet. By following best practices and committing to meaningful action, your organisation can lead the way in creating a low-carbon economy.