Can Science-Based Targets Make the Private Sector Paris-Aligned? A Review of the Emerging Evidence

Abstract

Purpose of Review Companies increasingly set science-based targets (SBTs) for reducing greenhouse gas emissions. We review literature on SBTs to understand their potential for aligning corporate emissions with the temperature goal of the Paris Agreement. Recent Findings SBT adoption by larger, more visible companies in high-income countries has accelerated. These companies tend to have a good prior reputation for managing climate impacts and most appear on track for meeting their scope 1 and 2 SBTs. More research is needed to distinguish between substantive and symbolic target-setting and understand how companies plan to achieve established SBTs. There is no consensus on whether current target-setting methods appropriately allocate emissions to individual companies or how much freedom companies should have in setting SBTs. Current emission accounting practices, target-setting methods, SBT governance, and insufficient transparency may allow companies to report some emission reductions that are not real and may result in insufficient collective emission reductions. Lower rates of SBT diffusion in low- and middle-income countries, in certain emission-intensive sectors, and by small- and medium-sized enterprises pose potential barriers for mainstreaming SBTs. While voluntary SBTs cannot substitute for more ambitious climate policy, it is unclear whether they delay or encourage policy needed for Paris alignment. Summary We find evidence that SBT adoption corresponds to increased climate action. However, there is a need for further research from a diversity of approaches to better understand how SBTs may facilitate or hinder a just transition to low-carbon societies.

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“…There are also regional variations in terms of existing net-zero targets and the opportunity of uptake by the highest emitting 200 urban areas. While the greatest rate of increase in mitigation potential comes from Asia and developing Pacific -where net-zero targets are not as widespread -the greatest absolute Science-based targets for GHG emission reductions aligned with limiting global warming to 1.5°C are also diffusing among companies 27 . However, only 22 of the top 500 emitting companies (with estimated scope 1 emissions of 9.15 GtCO 2 eq) have a science-based target for climate, while 138 companies have adopted other reduction targets that are not aligned with limiting global warming to 1.5°C.…”

“…The horizontal bars in panel b) depict the share that existing net-zero targets (from the 1,098 cities and towns emitting 4.99 GtCO 2 eq as marked) and the opportunity of net-zero targets of the top 200 urban areas (representing 9.26 GtCO 2 eq) can have in the total consumption-based urban emissions of 28.60 GtCO 2 eq. Both of these horizontal bars represent the shares within the total.Science-based targets for GHG emission reductions aligned with limiting global warming to 1.5°C are also diffusing among companies27 . However, only 22 of the top 500 emitting companies (with estimated scope 1 emissions of 9.15 GtCO 2 eq) have a science-based target for climate, while 138 companies have adopted other reduction targets that are not aligned with limiting global warming to 1.5°C.…”

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