World Wildlife Fund’s (WWF) mission is to stop the degradation of the earth’s natural environment and to build a future in which humans live in harmony with nature. With over 5 million active members and offices in more than 100 countries, WWF is one of the largest conservation organizations in the world. WWF’s work is organized into six areas: food, climate, fresh water, wildlife, forest and oceans. Programs in these areas focus on conserving the world’s biological diversity, ensuring the use of renewable natural resources, and promoting the reduction of pollution and wasteful consumption.
The Science Based Targets initiative (SBTi) is a partnership established in 2015 by WWF, CDP, the United Nations Global Compact (UNGC), and World Resources Institute (WRI). The initiative was launched in the lead up to COP21 in Paris in an effort to inspire countries to action by demonstrating the willingness of companies to set greenhouse gas emission reductions targets in line with leading climate science from the UN’s Intergovernmental Panel on Climate Change (IPCC).
SBTi recently celebrated the 1,000th company formally taking action by either setting a science-based target (SBT) or committing to develop one over the next two years. These companies represent a combined market capitalization of over $10.8 trillion USD and together account for more operational emissions than the annual emissions of France and Spain combined.
Tim Letts is the Deputy Director of Climate & Energy at WWF and is part of the team working to help companies develop and commit to SBTs and was kind enough to sit down with me to talk about his work with SBTi.
Before we begin, let’s start with an overview of science-based targets
Through the 2015 Paris Agreement, the nations of the world committed to holding the “increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels.” In 2018, an IPCC special report on the impacts of global warming of 1.5 °C dramatically emphasized the importance of achieving this higher ambition. A company that sets an SBT is committing to doing its calculated fair share to reduce its greenhouse gas emissions in line with the global reductions needed to achieve either of those temperature goals.
- SBT tools are currently only available for businesses
- SBTs must include commitments to reduce Scope 1 and Scope 2 emissions, and in most cases must address Scope 3 emissions as well
- A company’s scope 1 &2 emissions reduction target must be ambitious enough to at least support the well-below 2°C scenario, but companies are encouraged to set more ambitious targets to support the 1.5°C scenario
- Companies must commit to disclose their GHG emissions inventory annually
Here’s an example of how a company might go about setting an SBT:
Step 1: Determine if your company can use a sectoral approach (officially known as the Sectoral Decarbonization Approach or SDA)
The International Energy Agency (IEA) produces a report called the Energy Technology Perspectives report which establishes budgets for emissions of CO2 for several specific sectors such as power generation, iron, steel, and cement production, and commercial buildings. Companies in these sectors produce a relatively homogenous product or service, and their outputs can be compared across the sector.
Targets using the sectoral approach are calculated based on the company’s size and projected growth within its specific industry and are often written in terms of emissions relative to a business metric:
- Our cement manufacturing company commits to reduce Scope 1 & 2 GHG emissions 11% per ton of cementitious materials produced by 2025 from a 2015 base year
Step 2: If not using the sectoral approach, use the absolute approach (officially known as Absolute Emissions Contraction)
The IPCC special report also established absolute reductions targets that would support the global warming scenarios if every organization in the world committed to them. These targets are easier to calculate as they apply the same percentage reductions to all companies independent of sector or anticipated growth.
Using the absolute approach, companies commit to reducing absolute Scope 1 and Scope 2 emissions by:
- At least 2.5% per year to support the well-below 2°C scenario
- At least to 4.2% per year to support the 1.5°C scenario
An absolute Scope 1 and Scope 2 reduction target of 4.2% per year is considered very ambitious.
An example of an SBT that uses the absolute approach and supports the well-below 2°C scenario:
- Our telecommunications company commits to reduce absolute Scope 1 and Scope 2 GHG emissions 12.5% by 2025 from a baseline year of 2020
An example of an SBT that uses the absolute approach and supports the 1.5°C scenario:
- Our telecommunications company commits to reduce absolute Scope 1 and Scope 2 GHG emissions 21% by 2025 from a baseline year of 2020
Step 3: Determine if you must set a Scope 3 target
Each company that would like to set an SBT must evaluate their Scope 3 emissions. If Scope 3 emissions account for 40% or more of a company’s total emissions, then the company must also set a target for reducing Scope 3 emissions. Most companies meet the criteria for requiring a Scope 3 target and for many companies, the majority of Scope 3 emissions come from purchased goods and services and/or the use of their sold products.
Scope 3 emissions targets generally fall into one of two categories:
- An emissions reduction target such as:
- Our snack food company commits to reduce absolute value chain emissions by 20% by 2030 from a 2015 baseline
- Our restaurant company commits to a 31% reduction in emissions intensity (per metric ton of food and packaging) across our supply chain by 2030 from 2015 levels
- A supplier engagement target such as:
- Our pharmaceutical company commits that suppliers representing 70% of overall spend will set science-based targets by 2024.
Step 4: Validate your SBT with SBTi and communicate your goals with stakeholders
Once a company has internally agreed upon an SBT, they submit the target to SBTi for validation. Once the target has been validated, the company is able to begin communicating the SBT to external stakeholders.
Below are a few examples of completed public SBTs:
- American multinational confectionery, food, and beverage holding company Mondelēz International commits to reduce absolute scope 1, 2, and 3 (purchased goods and services and waste generated in operations) GHG emissions 10% by 2025 from a 2018 base year.
- American multinational consumer electronics retailer Best Buy commits to reduce absolute Scope 1 and Scope 2 GHG emissions 50% by 2030 from a 2017 base-year. Best Buy also commits to reduce absolute Scope 3 GHG emissions from Use of Sold Products 20% by 2030 from a 2017 base-year.
- Natural household products retailer Seventh Generation commits to reduce absolute Scope 1 and 2 GHG emissions 100% by 2030 from a 2012 base-year. The company also commits to reduce absolute Scope 3 GHG emissions from the use of sold products 90% by 2030 and reduce total scope 3 emissions from remaining categories 80% by 2030, from a 2012 base-year.
What do you actually do all day?
I split my time between helping companies who are interested in understanding and implementing science-based target setting and working with our corporate partners on their broader climate action plans. These partners are developing comprehensive climate plans that include SBTs but also implementation work, value chain engagement, renewable energy strategies, and policy solutions.
SBTi currently has a number of projects developing sector specific guidance and tools and WWF is leading the SBTi Forest, Land and Agriculture (FLAG) project. Agriculture, Forestry and Other Land Use (AFOLU) emissions represent nearly a quarter of global GHG emissions but very few companies include AFOLU in their GHG reports or reduction targets. WRI is in the process of developing new accounting standards for land sector emissions, removals, and bio energy, and WWF is working on developing the related target setting guidance.
WWF is also working to further refine the sector approach for transportation by developing science-based reduction pathways for aviation and ocean-going transport. We’re hoping the updated guidance will enable logistics heavy organizations to make better choices not only among transportation providers but also among the different modes of transportation.
And our partners are leading on other new sector specific approaches like the just launched pilot SBT criteria for financial institutions.
What do you wish more people knew about SBTs?
The target setting process can seem daunting at first, but it can be much easier than most people think. Oftentimes when companies approach us, they already have a good understanding of their Scope 1, 2 & 3 emissions so they’ve already gathered the relevant data. From that point, identifying the targets can be relatively straightforward. But building internal buy-in for these ambitious targets can be a sticking point.
Many corporate leaders want to have a complete emission reduction strategy in place before publicly setting a target, and that can be challenging today, especially given uncertainties in business strategy and technological developments. It’s important for companies to remember that target setting isn’t about doing what they know they can achieve easily; we’re encouraging them to set targets based on what climate science says we need to achieve in order to limit the worst impact of global warming, and then align the entire company to find innovative ways to meet or exceed those goals.
You also don’t have to be a large corporation in order to set an SBT. We have a new streamlined target setting pathway for companies with fewer than 500 employees. This new process makes it much easier for small and medium sized companies to take part in the initiative.
It’s also really important for companies to know how significant a signal setting an SBT is to the investor community. Initiatives such as Climate Action 100+ are focusing investor attention on climate related risk and related action, and are pointing to SBTs as a key metric to look for in a company that is actively mitigating that risk.
What are some of the key skills for success in this role?
I think a deep understanding of the WRI Greenhouse Gas Protocolis one important place to start. If folks are interested in learning more about GHG accounting, there are some good trainings from WRI and the Greenhouse Gas Management Institute. It’s helpful to be familiar with the key concepts of the science underlying IPCC reports. Also, the FSB Task Force on Climate-related Financial Disclosures (TCFD) 2017 recommendations report gives a great overview of how companies should assess and disclose climate-related risks and opportunities. It’s good to be conversant in the challenges of climate change through the lenses of climate science, business risk, accounting, and emission reduction strategies.
What is your favorite part of your job?
I really enjoy making a contribution to tackling a systemic issue like climate change, whether through a powerful platform like SBTi or through one-on-one engagements with companies. SBTi is a great example of what NGOs can do collaboratively to bring businesses and other stakeholders together to drive climate action. The initiative has made positive and effective contributions to the narrative on climate change during some very challenging times.
I also enjoy meeting sustainability professionals and learning about their roles. It always fascinates me to learn how specialized each company can be within their market and the resulting unique sustainability challenges and solutions.
And I have to say that I’m incredibly lucky to be working with such a great group of people at WWF. It’s wonderful to work at an organization that attracts such intelligent, motivated people who are focused on making a positive impact in the world.
What is the hardest part of your job?
Climate change in general can be a really daunting subject to work on. At times it can feel insurmountable, it’s a crisis that will affect every aspect of the economy and what you do on any given day can feel like such a small drop in the bucket. It’s important to remember that it’s a crisis that doesn’t have a silver bullet solution, the answer will be a roll up of thousands of changes at scale, and all of us doing our best to achieve impact and change.
What is your proudest professional achievement?
Contributing to WWF’s support of the We Are Still In campaign. It was an incredible experience to work in collaboration with a broad coalition of NGOs to leverage the commitment of our partner companies and to link corporate voices with calls for action from other subnational stakeholders. Being a part of bringing together such a diverse group of voices all saying that the US will still contribute to the Paris agreement is something that I will always be proud of.
What are the game changers in your world?
WWF and our partners publish a report series called Power Forward which analyzes climate and energy target setting in the Fortune 500. The overall trend has been an increasing number of companies with at least one climate or energy related target. While it’s encouraging to see more voluntary actions like these happening, it’s not happening across the board. A real game changer will be consistent and ambitious policy solutions that help to level the playing field, drive more progress from the laggards, and complement the voluntary corporate action we’ve already seen. That policy action can accelerate positive trends were already seeing, like the cost-competitiveness of renewable energy solutions. I hope the work that WWF and others are doing and the examples of corporate leadership we’re seeing in the voluntary space are strengthening the case for effective climate policies.
What was your path to this role?
I served in the military after earning my engineering degree from the US Naval Academy. I took pride in that work, and when I decided to transition careers, I knew I wanted to find another field I would be passionate about. I attended NYU Stern for my MBA, and I was an Environmental Defense Fund Climate Corps fellow which was a great primer on climate and energy strategies. After school, I started at WWF as an intern and have been lucky to learn, grow, and advance within a great organization.
What’s your advice to someone interested in a role like this?
If you’re unsure of what type of organization you want to work in within the broader field of sustainability, consider whether you want to be working on something that’s very tangible and has a direct impact at a smaller scale or work in a role that addresses the biggest pieces of the puzzle but can be harder to realize immediate progress. That’s an important distinction and can help you decide if you’d rather do more hands-on, in-house work at a particular company, or engage with a broader vantage point through a consulting or NGO role.
What are your favorite resources?
The Climate Leadership Conferenceis a really wonderful place to meet other professionals in the space.
SBTi has a Tools & Resources page that includes a lot of core and sector specific information that’s helpful if you want to learn more about SBTs. Taking time to stay up-to-date on broader sustainability themes and advancements through resources like GreenBiz is also critical to maintaining a holistic view of corporate sustainability.