Contributed By: Nathan Shuler, Sustainability Solutions Architect, Schneider Electric Energy & Sustainability Services
Thinking back on the past decade, companies first started setting emission targets with a nice-sounding “20% by 2020” target. How they were going to meet those targets, however, came later. For some, there wasn’t much science behind the targets being set outside of the positive view in the market. But with the release of the IPCC 1.5 report, things got real. Since its release in 2018, there’s been a call from stakeholders for more serious, science-based goals that influence company performance and reduce carbon impact in a material way, both from an organization's own operations and, increasingly, that of their supply chain stakeholders as well. Pressures from consumers, investors and millennials are making Science-Based Targets (SBTs) more mainstream (2021 update: to date, more than 1,100 companies are now taking action with SBTs). Each commitment brings the world one step closer to achieving 1.5C.
Consumers look for companies to take ownership in their role of the climate crisis. Companies have an obligation to society to challenge the traditional notion of shareholder value being the pinnacle for what companies are responsible for. They are realizing the importance of pulling their weight for societal and climate issues. More companies are adopting SBTs because there’s a higher level of rigor and sophistication to show that companies are leading and setting a gold standard.
However, companies aren’t only adopting SBTs because of the positive view externally. They are also seeing opportunity to drive performance within their business. Because SBTs are long-term goals, it gives companies the time to think critically about long-term strategies for how to solve climate-related problems: how can they impact R&D, what partnerships can be developed to support low-carbon growth, what new technologies can be implemented to impact the bottom line. Long-term target setting allows companies the chance to position themselves more strategically and understand what’s on the horizon.
Press play below to listen to this podcast from the Innovation Forum event to learn how business use of science-based targets is developing (Skip to minute 4 to hear from Nathan).
This podcast first appeared on Innovation Forum website.