Deep Dive on Science -Based Target Setting · Deep Dive on Science -Based Target Setting Science...
Transcript of Deep Dive on Science -Based Target Setting · Deep Dive on Science -Based Target Setting Science...
Deep Dive on Science -Based Target SettingScience Based Targets Initiative
Sep 21, 2017
Climate Week NYC
An initiative by In collaboration with
An initiative by In collaboration with
@sciencetargets
#sciencebasedtargets
Agenda
3
1. Welcome and Introductions
2. Brief overview of the Science Based Targets initiative and
methodologies available
3. Corporate perspective: Getting a SBT approved
4. Q&A
5. Scope 1 and 2
6. Scope 3 target setting
7. Corporate perspective: Implementing an approved SBT
8. Q&A
9. Closing
Agenda
4
1. Welcome and Introductions
2. Brief overview of the Science Based Targets initiative
and methodologies available
3. Corporate perspective: Getting a SBT approved
4. Q&A
5. Scope 1 and 2
6. Scope 3 target setting
7. Corporate perspective: Implementing an approved SBT
8. Q&A
9. Closing
Outline
5
2. Brief overview of the Science Based Targets initiative
and methodologies available
1. What are science-based targets?
2. The Science Based Targets initiative
3. Join the global call to action
4. Approved SBT Methodologies
• Greenhouse gas emissions reduction
targets aligned with the latest climate
science for keeping warming below
2°C
• A clear pathway for companies to
future-proof growth by specifying
necessary greenhouse gas emissions
reductions
• A challenge to companies to transform
their business and help create and
prepare for a low-carbon economy
Brief overview I What are science-based targets?
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Source: Climate Action Tracker 2017
Brief overview I The need for science-based targets
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70% to 95% below
2010 levels for 1.5⁰C
40% to 70% below
2010 levels for 2⁰ C
Understanding emission reduction targets based on climate science for keeping
warming below 1.5ºC and 2ºC
Dell commits to reduce GHG emissions
from their facilities and logistics
operations 50% by 2020, using a 2010
base-year. Dell also commits to reduce
the energy intensity of their product
portfolio 80% by 2020, using a 2011
base-year.
EDP commits to reduce scope 1 and 2
emissions from electricity production
55% per TWh by 2030, from 2015 levels.
The company also commits to reduce
absolute scope 3 emissions 25% over
the same time period.
Enel commits to reduce CO2 emissions
25% per kWh by 2020, from a 2007
base-year. The target includes the
decommissioning of 13 GW of fossil
power plants in Italy, and is a milestone
in the long term goal to operate in
carbon neutrality by 2050.
Konica Minolta commits to reduce
absolute greenhouse gas emissions
from across its value chain (scopes 1, 2
and 3) 60% by 2030, from 2005 levels.
The scope 3 reductions cover purchased
goods and services, upstream
transportation and distribution, and the
use of sold products
Brief overview I What are science-based targets?
8
Outline
9
2. Brief overview of the Science Based Targets initiative and
methodologies available
1. What are science-based targets?
2. The Science Based Targets initiative
3. Join the global call to action
4. Approved SBT Methodologies
The Science Based Targets initiative champions science-based target setting as a
powerful way of boosting companies’ competitive advantage in the transition to the
low-carbon economy.
Brief overview I The Science Based Targets initiative
10
SDA
method
Engaging
Amplifiers
Target
setting
manual
Methods
and
Guidance
Validating
Targets
Call to
Action
Platform
Reduce the barriers to
the adoption of science-
based targets
Institutionalize the
adoption of science-
based emission
reduction targets
Create a critical mass
STRATEGIES
ACTIVITIES
Brief overview I The Science Based Targets initiative
11
Outline
12
2. Brief overview of the Science Based Targets initiative and
methodologies available
1. What are science-based targets?
2. The Science Based Targets initiative
3. Join the global call to action
4. Approved SBT Methodologies
Since officially launching in June, 2015:
305Companies
have formally
joined the
SBTi Call to
Action
73Companies
have
approved
targets
Companies
joining the Call to
Action every
week
~2
Science-based targets I Join the global call to action
13
Science-based targets I Join the global call to action
14
Science-based targets I Join the global call to action
15
Top countries represented by companies committed to science-based targets
.
22
710 9 10
8 79
58 7 7
57 6
3 4
73
2 12 3
42
3 2
0
5
10
15
20
25
SBTi Companies by Sector
Committed Set targets
Science-based targets I Join the global call to action
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• Download, sign and
submit the
Commitment Letter
• Be featured as a
Committed Company
on SBT and WMB
websites
• Consult target setting
resources (SBT manual,
criteria, GHG Protocol)
• Work internally to
develop an SBT
• Test different methods
and use most ambitious
scenarios
• Download and complete
the target submission
form with the help of the
guidance document
• Submit final target for
validation to
info@sciencebasedtarge
ts.org
• Approved targets will be
featured on the SBT website
• You will be invited to speak
at events and be quoted in
media pieces
• You will receive the SBTi
welcome pack explaining
how you can communicate
about your target
Science-based targets I How can companies participate?
17
• Increase efficiency to be more competitive
• Unlock new financial returns
• Attract investors
• Proactive policy engagement as a leader
• Pre-empt policy changes and regulatory risk
• Future proof growth
• Join the global call to action
Science-based targets I Why should companies engage?
18
Outline
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2. Brief overview of the Science Based Targets initiative and
methodologies available
1. What are science-based targets?
2. The Science Based Targets initiative
3. Join the global call to action
4. Approved SBT Methodologies
20
Agenda
21
1. Welcome and Introductions
2. Brief overview of the Science Based Targets initiative and
methodologies available
3. Corporate perspective: Getting a SBT approved
4. Q&A
5. Scope 1 and 2
6. Scope 3 target setting
7. Corporate perspective: Implementing an approved SBT
8. Q&A
9. Closing
Agenda
22
1. Welcome and Introductions
2. Brief overview of the Science Based Targets initiative and
methodologies available
3. Corporate perspective: Getting a SBT approved
4. Q&A
5. Scope 1 and 2
6. Scope 3 target setting
7. Corporate perspective: Implementing an approved SBT
8. Q&A
9. Closing
Agenda
23
1. Welcome and Introductions
2. Brief overview of the Science Based Targets initiative and
methodologies available
3. Corporate perspective: Getting a SBT approved
4. Q&A
5. Scope 1 and 2
6. Scope 3 target setting
7. Corporate perspective: Implementing an approved SBT
8. Q&A
9. Closing
Outline
24
5. Scope 1 and 2
1. Target modelling
2. SBTi Criteria
3. Target analysis
Scope 1 and 2 I S1 Target modelling
25
Based on sector-specific carbon budgets
determined by mitigation/technology
options and activity projections.
SBT approach
A) Sector-based
approach
B) Absolute-
based approach
C) Economic-
based approach
Based on absolute emissions reductions
determined in climate reports (e.g. 49-72%
reduction in IPCC 5th AR).
Based on the average emissions reductions
determined in climate reports per projected
economic output.
Scope 1 and 2 I S2 Target modelling
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0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
45 000
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
2013 2020 2025 2030 2035 2040 2045 2050T
Wh
MT
CO
2
2DS trajectory for power generation
Direct CO2 emissions (Mt CO2) Gross electricity generation (TWh)
According to the World
Energy Council, demand
for electricity is expected
to double to 2060. At the
same time, the
International Energy
Agency (IEA) in its 2016
Energy Technology
Perspectives report
(2016) projects that net
CO2 emissions from
electricity generation
need to be phased out
by mid century.
Scope 1 and 2 I S2 Target modelling
27
Meeting the growing
demand for electricity
with the global goals
adopted in the Paris
Agreement requires a
radical transformation in
the power sector.
According to the 2
Degree Scenario (2DS)
of the IEA, installed
capacity from non-fossil
sources needs to
increase by a factor of
five by 2050 compared to
the installed capacity in
2013.0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
2013 2020 2025 2030 2035 2040 2045 2050
Gross electricity capacity (GW)
Renewables (incl. Hydro)
Biomass with CCS
Biomass and waste
Nuclear
Fossil generation with CCS
Unabated fossil generation
Scope 1 and 2 I S2 Target modelling
28
Science-based target setting assumes that corporates play a key role in transforming the
power sector through the decarbonization of their own electricity supplies in line with a
well-below 2ºC scenario. Science-based target setting methods, such as the Sectoral
Decarbonization Approach, help companies understand how their electricity-related
emissions need to be reduced in order to be in line with a 2ºC trajectory.
0
500
1000
1500
2000
2500
2025 2030 2035 2040 2045 2050 2055 2060
Emissions[M
tCO2e]
Years
Chemicalandpetrochemicals- totalemissions2025-2060(ETP2017
2DS)
Scope2emissions
Scope1emissions
0
500
1000
1500
2000
2500
3000
3500
4000
2025 2030 2035 2040 2045 2050 2055 2060
Emissions[M
tCO2e]
Years
Otherindustries- totalemissions2025-2060(ETP20172DS)
Scope2emissions
Scope1emissions
Outline
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5. Scope 1 and 2
1. Target modelling
2. SBTi Criteria
3. Target analysis
Scope 1 and 2 I Call to Action criteria
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General criteria:
• C1 - Scopes: The targets must cover company-wide scope 1 and scope 2 emissions,
as defined by the GHG Protocol Corporate Standard.
• C2 - Significance thresholds: Companies may exclude up to 5% of scope 1 and
scope 2 emissions combined in their inventory and target.
• C3 - Greenhouse gases: The targets must cover all relevant GHGs as required per
the GHG Protocol Corporate Standard.
• C4 - Base and target years: All targets must cover a minimum of 5 years and a
maximum of 15 years from the date the target is submitted to the SBTi for an official
validation.
• C5 - Progress to date: Targets that have already been achieved by the date they are
submitted to the SBTi are not acceptable.
• C6 - Level of ambition: At a minimum, the target will be consistent with the level of
decarbonization required to keep global temperature increase to 2°C compared to
pre-industrial temperatures, though we encourage companies to pursue greater
efforts towards a 1.5° trajectory.
Scope 1 and 2 I Call to Action criteria
31
General criteria:
• C7 - Absolute vs. intensity: Intensity targets are only eligible when they lead to
absolute emission reduction targets in line with climate scenarios for keeping global
warming below 2°C or when they are modelled using an approved sector pathway or
method approved by the Science Based Targets initiative (e.g. the Sectoral
Decarbonization Approach).
• C8 - Method validity: Targets must be modelled using the latest version of methods
and tools approved by the initiative. Targets modelled using previous versions of the
tools or methods can only be submitted to the SBTi for an official validation within six
months of the revision.
• C9 - Combined scope targets: Targets that combine scopes (e.g. 1+2 or 1+2+3) are
permitted; however, when a company has a combined scope 1, 2, and 3 target the
scope 1 and 2 portion of the target must be in line with climate science.
Scope 1 and 2 I Call to Action criteria
32
Scope 2 specific criteria:
• C10 - Approaches: Companies shall disclose whether they are using a location or
market-based approaches as per the GHG Protocol Scope 2 Guidance to calculate
base year emissions and to track performance against a science-based target.
Scope 1 and 2 I Call to Action criteria
33
Recommendations and additional guidance – General:
• R1 - Subsidiaries: It is recommended for only the parent company to submit its
targets; however, subsidiaries may submit separate targets if they so wish. In cases
where both parent companies and subsidiaries submit targets, they must make it clear
whether the parent company’s target includes or excludes the target of the subsidiary.
Please see boundary criteria above.
• R2 - Avoided emissions: Avoided emissions fall under a separate accounting system
from corporate inventories and do not count toward science-based targets.
• R7 - Choosing an approach: The SBTi recommends using the most ambitious
decarbonization scenarios that lead to the earliest reductions and the least cumulative
emissions.
• R8 - Offsets: The use of offsets is not counted as reductions toward the progress of
companies’ science based targets. The SBTi requires that companies set targets
based on emission reductions through direct action within their own boundaries or
their value chains. Offsets are only considered to be an option for companies wanting
to contribute to finance additional emission reductions beyond their science-based
targets.
Scope 1 and 2 I Call to Action criteria
34
Recommendations and additional guidance – Scope 2:
• It is recommended that companies model heat and steam related-emissions as if they
were part of their direct (i.e. Scope 1) emissions.
• The rationale is that, in absence of purchased heat or steam, the thermal energy
needs would be met through thermodynamic processes that would take place
within the boundaries of the company.
• It is recommended that electricity-related Scope 2 emissions are modelled taking into
account two factors: (a) efficiency gains projected for the sector based on below 2ºC
scenarios (if available) and; (b) the decarbonization projected for the power sector.
• Any Scope 2 reduction measure should only be applied to the Scope 2 portion of the
science-based target.
• When companies reduce Scope 2 emissions throughout the use of contractual
instruments, it is strongly recommended for companies to ensure that all contractual
instruments used to meet a science-based target are in conformance with the Scope 2
Quality Criteria as listed in Table 7.1 of the GHG Protocol Scope 2 Guidance.
Outline
35
5. Scope 1 and 2
1. Target modelling
2. SBTi Criteria
3. Target analysis
Scope 1 and 2 I Analysis of targets
36
Examples of targets:
• Example 1: The company commits to reduce its S1+S2+S3 emissions 50%
by 2050 compared to emissions in 2010.
• Example 2: The company commits to reduce its S1+S2+S3 emissions
intensity 50% by 2030 compared to its 2010 emissions intensity.
• Example 3: The company commits to reduce S1+S2 emissions by 2050
compared to its 2010 emissions.
Scope 1 and 2 I Analysis of targets
37
Examples of targets:
• Example 1: The company commits to reduce its S1+S2+S3 emissions 50%
by 2050 compared to emissions in 2010.
o Shorter term target missing
o Not possible to figure out the level of ambition in S1+S2 portion of the target
Scope 1 and 2 I Analysis of targets
38
Examples of targets:
• Example 2: The company commits to reduce its S1+S2+S3 emissions
intensity 50% by 2030 compared to its 2010 emissions intensity.
o Not possible to figure out the level of ambition in S1+S2 portion of the target.
o Without activity projections, it is not possible to figure out the impact of the target
in the absolute emissions of the company.
Scope 1 and 2 I Analysis of targets
39
Examples of targets:
• Example 3: The company commits to reduce S1+S2 emissions by 2050
compared to its 2010 emissions.
o Shorter term target missing
o The target could potentially be in line with a 2ºC trajectory… or not...
o Depending on sector
o Depending on S1 / S2 ratio
o If S2 represents a significant a portion of S1+S2 emissions, the target
may not be ambitious enough.
Agenda
40
1. Welcome and Introductions
2. Brief overview of the Science Based Targets initiative and
methodologies available
3. Corporate perspective: Getting a SBT approved
4. Q&A
5. Scope 1 and 2
6. Scope 3 target setting
7. Corporate perspective: Implementing an approved SBT
8. Q&A
9. Closing
Outline
41
6. Scope 3 target setting
1. SBTi criteria
2. Target validation results
3. Draft scope 3 guidance
1. Examples of approved targets
2. Scope 3 category analysis
3. Additional guidance
42
VISION
Science-based GHG emission reduction target setting will become standard practice
and corporations will be contributing to closing the emissions gap left by country
commitments.
• S3 represents the largest impact for most sectors.
• Having a Scope 3 target allows and motivates companies to focus where they can
have the largest impact.
• Upstream Scope 3 targets help build momentum and help multiply the adoption of
science-based targets.
Scope 3 I SBTi vision
43
C11- Boundary: Complete a scope 3
screening. If scope 3 emissions are > 40%
of total emissions, a scope 3 target is
required. The scope 3 target boundary must
include the majority of value chain
emissions.
C12 - Ambition: Targets should clearly
demonstrate how the company is addressing
the main sources of GHG emissions in line
with current best practice.
C13 - Power generators that distribute
fossil fuels: Targets required for the use
of sold products.
C14 – Timeframe: Targets must cover 5 to
15 years from date submitted to SBTi for
an official validation.
R11 - Adapting SBT methods for scope
3 target setting: While current methods
were developed for scope 1 and 2
emissions, companies should consider
using these methods to inform their scope
3 targets when possible.
Scope 3 I SBTi scope 3 criteria summary
Outline
44
6. Scope 3 target setting
1. SBTi criteria
2. Target validation results
3. Draft scope 3 guidance
1. Examples of approved targets
2. Scope 3 category analysis
3. Additional guidance
Most targets are unapproved due to the failure to meet scope 3 criteria
C4 - S1 S2 target year 5 to 15 years from submission
11%
Other8%
C1 - S1 S2 company-wide emissions
covered7%
C6 - S1 S2 level of ambition4%
C5 - S1 S2 progress to date3%
C2 - S1 S2 significance threshold
3%
C12- S3 level of ambition27%
C11 - S3 screening conducted
23%
C11 - S3 boundary covers 2/3 of S3 or top 3 categories
10%
C11 - S3 target required if S3 is significant
4%
Scope 364%
Scope 3 category analysis I Recent target validation results
45
Outline
46
6. Scope 3 target setting
1. SBTi criteria
2. Target validation results
3. Draft scope 3 guidance
1. Examples of approved targets
2. Scope 3 category analysis
3. Additional guidance
47
Percentage-based
emissions
reduction targets
Percentage-based absolute target in
line with 2C pathway when possible or
intensity target based on the SDA
Other percentage-based intensity
target resulting in ambitious reductions
in absolute emissions
Non-emissions-
based targets
Performance-based target expressed
in absolute or intensity terms
Influence the behavior of suppliers or
customers
Most preferred
Least preferred
Scope 3 I Ambition
48
• Target is in line with the absolute contraction approach
• Over 98% of scope 3 covered
• Forward looking ambition
• KPN plans to start addressing the categories it has the most
influence over
• Targets after 2025 will be set using the SDA
KPN will reduce its scope 3 emissions 20%
by 2025 and 50% by 2050 from a 2014
base year
Percentage-based absolute target or
intensity target in line with 2°C pathwaysAnd
Scope 3 I Ambition: examples of approved targets
49
AMD commits to improve the compute
performance per watt of energy consumed
by their mobile APU processors by 2500%
by 2020 from a 2014 base-year
Performance-based target expressed in
absolute or intensity terms
and
and
Scope 3 I Ambition: examples of approved targets
• Target covers sold products, which is 91% of scope 3
• Separate purchased goods and services target covers
additional 8%
• Over the same timeframe, Moore’s Law indicates efficiency
would increase 14.13X, while AMD’s target is a 25X
improvement
Daiichi Sankyo commits that 90% of key
suppliers by purchase value will institute
GHG reduction targets by fiscal year 2020
Influence the behavior of suppliers or
customers
And
Scope 3 I Examples of approved targets
50
• Target covers over 70% of scope 3.
• Suppliers will set GHG reduction targets.
• Earlier target years preferable for engagement targets.
• Best practices would include having suppliers set
science-based GHG reduction targets
Outline
51
6. Scope 3 target setting
1. SBTi criteria
2. Target validation results
3. Draft scope 3 guidance
1. Examples of approved targets
2. Scope 3 category analysis
3. Additional guidance
• Using reported and modelled CDP data, we can determine what scope 3 categories
are likely to be relevant for a given sector
• This will give companies a greater understanding of what may be significant in their
scope 3 inventory
• The SBTi can use this information when assessing targets since it provides reference
points to evaluate self-reported information against
• For each key sector, the objectives are:
1. Identify the main Scope 3 categories
2. Identify the type of targets the sector can set for those categories
3. Develop sector-specific guidance for based on that information
52
Scope 3 I Sector profiles
88%
12%
Most companies have not reported emissions for all relevant scope 3 categories
Incomplete S3 screening
Complete S3 screening
Not all relevant
categories calculated
Relevant categories
calculated
53
Scope 3 I Sector profiles
Source: CDP 2014 data
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Automobiles &Components
Constructionmaterials
Containers &Packaging
Oil & Gas Food & BeveragesProcessing
Percent of scope 3 emissions in each category
Others
End-of-life treatment of soldproducts
Use of sold products
Downstream transportationand distribution
Upstream transportation anddistribution
Fuel- and energy-relatedactivities
Capital goods
Purchased goods andservices
54
Scope 3 I Sector profiles
Outline
55
6. Scope 3 target setting
1. SBTi criteria
2. Target validation results
3. Draft scope 3 guidance
1. Examples of approved targets
2. Scope 3 category analysis
3. Additional guidance
56
Targets not considered relevant/ambitious
• Targets to collect data
• Targets that cover avoided emissions (e.g. emissions
reduced against a BAU baseline)
• Targets already that have already been achieved or
nearly completed
• Targets without a set base or target year
Scope 3 I Additional guidance
57
Sector Progress description
Apparel Launched, in scoping phase
Oil and gasProposed method white paper to be finalized in
Q1 2018
Vehicle manufacturersTool, technical paper and guidance expected
December 2017
Financial institutions Seeking funding
Sector development information now available on www.sciencebasedtargets.org
Scope 3 I Sector guidance in support of scope 3 development
58
SBTi Call to Action Guidelines
GHG Protocol Value Chain (Scope 3)
Standard
CDP Supply Chain Program
Scope 3 Evaluator tool
SBTi Website
Draft SBT Manual
GHG Protocol Scope 3 Calculation
Guidance
Scope 3 I Resources
Agenda
59
1. Welcome and Introductions
2. Brief overview of the Science Based Targets initiative and
methodologies available
3. Corporate perspective: Getting a SBT approved
4. Q&A
5. Scope 1 and 2
6. Scope 3 target setting
7. Corporate perspective: Implementing an approved
SBT
8. Q&A
9. Closing
Agenda
60
1. Welcome and Introductions
2. Brief overview of the Science Based Targets initiative and
methodologies available
3. Corporate perspective: Getting a SBT approved
4. Q&A
5. Scope 1 and 2
6. Scope 3 target setting
7. Corporate perspective: Implementing an approved SBT
8. Q&A
9. Closing
Agenda
61
1. Welcome and Introductions
2. Brief overview of the Science Based Targets initiative and
methodologies available
3. Corporate perspective: Getting a SBT approved
4. Q&A
5. Scope 1 and 2
6. Scope 3 target setting
7. Corporate perspective: Implementing an approved SBT
8. Q&A
9. Closing
www.sciencebasedtargets.org
@sciencetargets
An initiative by In collaboration with