Science Based Target: the initiative for an effective Corporate Climate Action
The targets to reduce greenhouse gas (GHG) emissions are considered "science-based" if they are in line with the decarbonisation level required to maintain the global temperature rise below 2 degrees above pre-industrial temperatures, such as described in the Fifth Assessment Report of the Intergovernal Panel on Climate Change (IPCC), and in the Paris Agreement.
Science Based Target (SBT) is a defined path for sustainable future-proof growth, specifying how fast and how much its greenhouse gas emissions need to be reduced.
The initiative is promoted by the Carbon Disclosure Project (CDP), UN Global Compact (UNGC), World Resource Institute (WRI) and WWF; this partnership confirms that the setting of science-based objectives is already becoming part of the annual reporting practice of companies and of the data infrastructure for institutional investors, confirming for example the integration in the questionnaire and the scores of the CDP, the most important reporting system on the Greenhouse Gas emissions of the private sector.
Science Based Target is part of a large group of initiatives aimed at achieving certain environmental goals, such as "We Mean Business", which works with the major companies at global level in order to direct them towards more effective environmental policies and accelerate the transition to a "low-carbon" economy. Or as "RE100", the initiative that brings together over 100 large companies globally, engaged in the use of 100% energy from renewable sources as well as working to incentivize the request and improve its distribution.
And "Climate Neutral Now", of which Carbonsink is a partner, which represents a growing movement of companies and governments that are committed to reducing emissions and pursuing a "Climate-Neutral" future. Thanks to this partnership, Carbonsink has been recognized as an accredited consulting company to support companies in the measurement and reduction of greenhouse gas emissions.
Despite the introduction of climate change mitigation measures by governments, companies, civil society and other actors, total greenhouse gas emissions continue to increase. The Science Based Target initiative was born with the aim of being able to guide companies in setting ambitious climate change mitigation objectives to ensure that its Climate Action is in line with the scientific objectives.
The private sector driving the low-carbon transition
Most global greenhouse gas emissions are directly or indirectly affected by the private sector. Therefore companies play a crucial role in protecting the climate and ensuring that the transition to a low-carbon economy is effective and long-term. Understanding the risks posed by climate change and demonstrating its climate leadership by setting scientific goals for reducing greenhouse gases must become a standard practice for companies.
The realization of objectives based on science is a real fundamental component of sustainability management practices and essential to achieve carbon neutrality. In fact, over 420 companies have chosen to join the "Science Based Target" initiative, demonstrating that "environmental factors" are undoubtedly one of the most significant trends able to influence sustainable growth in the coming years.
The initiative is no coincidence that it is precisely when investors and financial institutions tend to assess and include the risks linked to climate change in company policies. In a world that is more and more attentive to the environment for a company, taking part in initiatives such as SBT is an inestimable advantage, and showing its commitment to a sustainable, ambitious and forward-looking business model concretely reinforces the trust of its stakeholders.
The transition to a low carbon economy will catalyse the development of new technologies and operational practices. Companies that set ambitious goals, and in line with their business of reference, will be able to lead innovation and transformation of tomorrow, confirming a leading role capable of influencing policy makers and helping to shape the legislation in development.
Climate leadership also strengthens credibility and reputation among stakeholders, including investors, customers, employees, policy makers and environmental groups. About half of consumers worldwide believe that climate change will have a negative effect on their lives and 65% agree that human activity, and corporate activities in particular, are responsible for climate change.
And it is thanks to initiatives like SBT, able to raise awareness on environmental issues related to climate change and the knowledge of new and innovative tools that respond to the challenges of sustainable development, that a sustainable business model can be affirmed in the private sector.
For long-term sustainable development
Today's news shows us that initiatives such as Science Based Target are fast becoming the new normality for companies seeking to gain a competitive advantage in the transition to a low carbon economy.
Regarding the inclusion of science-based objectives as an integral part of the company's annual reporting practice and data for institutional investors, an interesting report published by Etica SGR, which made investments responsible for its core-business , shows us the important work of dialogue with the main Italian companies to lead them to more sustainable and transparent behaviors.
The engagement activity developed by Etica is in line with the 2030 Agenda and the Sustainable Development Goals, so much so that the 17 SDGs have become an integral part of many corporate sustainability reports and / or balances, confirming the trend in wanting to present Shareholders the results of their commitment to protecting the environment and workers' rights, or progress in relations with the various stakeholders, such as customers, suppliers or employees.
Etica has understood that certain aspects will be more and more relevant in the near future and that the adhesion to initiatives like SBT is to be considered a form of investment in the long term, which is why it invites companies like SOL - already active in reducing emissions indirect CO2 - to think about an upcoming adherence to reporting initiatives, such as those developed by CDP (formerly the Carbon Disclosure Project) and the Science Based Target initiative to define objectives aligned with the level of decarbonisation established by the COP21 in Paris.
Although the road to the transition to a low-carbon economy is still long and complex, Italian companies have risen drastically to conquer the leadership role in climate, once again confirming the strategic role of the private sector for sustainable development.
Terna is certainly one of the companies that are taking important steps to achieve carbon neutrality with the exclusive use, in the electricity sector, of the use of renewable sources. This is confirmed by the largest Italian multi-utility company - A2A - already committed to minimizing the Group's environmental impact, which is concretely evaluating the innovative constitution of a company controlled by the group dedicated entirely to the "renewable energy" sector.
There are more and more companies that decide to take part in it to show their commitment to the fight against climate change, among the 420 companies that joined SBT the first distribution group in the United Kingdom, with more than two thousand points of sale, and one of the largest in Europe - TESCO.
The British distribution company has the long-standing ambition to become a Carbon Neutral company by 2050. It has now been over ten years since it set the first carbon reduction targets at company level, and today TESCO wanted to join a Science Based Target to establish more precise absolute objectives in the short and medium term, to build a long-term corporate value instead.
But the fight against climate change has become a global challenge, and it is for this reason that we have the duty to integrate the measures of contrast and mitigation in national policies, making concrete the commitment of the countries adhering to the United Nations Framework Convention on Climate Change (UNFCCC).
Our country is obliged to realize its commitment to an effective Climate Action, considering that companies are undoubtedly the main responsible for the substantial increase in global CO2 emissions into the atmosphere, Italian companies must implement climate change mitigation strategies designed to measure to reduce the amount of greenhouse gas produced and thus succeed in obtaining a lasting competitive advantage over time.
Currently, there are eight Italian companies - A2A, Barilla, Danieli, Enel, Hera, Italcementi, Manni Group and Sofidel - that have decided to join the Science Based Target initiative and set emission reduction targets for the scientific sector based on scientific bases.
This shows us that companies, from different sectors and around the world, are ready to achieve the objectives of the Paris agreement and above all have been able to recognize a strong business opportunity in doing so.