In less simple terms, science-based targets are based on the concept of a global carbon budget. By accounting for the greenhouse gas emissions that have been put into in the atmosphere since the industrial revolution began, and having a good understanding of how these affect the climate, it is possible to estimate the level of further emissions that can still be put into the atmosphere and have a good chance of maintaining global warming levels below 2°C.

Once you understand the global carbon budget and have a good grasp of the different sources of greenhouse gas emissions from across the economy, society and natural sources, then you can plot necessary reduction pathways in a fair and transparent way. When this is done at an organisational level, then this is considered to be a science-based target.

When considering what will be required to meet the 2°C goal at a global level, we are often thinking about timescales out to 2050 and 2100 and it can be logical to use these timeframes for setting long-term targets. But points along these trajectories can be more useful for setting organisational targets over a shorter time horizon, such as 2025 or 2030. These more immediate targets offer advantages, as they increase the sense of urgency for achieving reductions and have fewer uncertainties, putting the climate challenge onto the priority list for management and boards today.

However, setting these targets requires some serious thinking, as there are a range of factors that must be considered. There is a need to navigate through considerable uncertainty in a company’s future development, particularly over a 10 or 15 year time horizon. Although some of the most important questions are ones that large corporates will already have thought about in detail, such as predicting their own future growth, market share, asset portfolio and geographic locations.

Other questions can be more challenging. What will the low carbon transition mean for the growth or contraction of different sectors of the economy between now and 2050? How do you account for the impact of disruptive technologies or unexpected events? Should a company that has already taken action to lower carbon emissions today have to make the same level of reductions as those that haven’t started yet?

Fortunately, there are several methodologies to assist with setting science-based targets, which can provide useful frameworks for going through the process.

Perhaps the most detailed methodology released to date – and also the most commonly used –  is known as the Sectoral Decarbonisation Approach (SDA). This was published in 2015 by the Science-Based Targets initiative (SBTi), a partnership between CDP, UN Global Compact, the World Resources Institute and WWF. The methodological development was supported by a technical advisory group of international experts, which included the Carbon Trust.

This methodology enables companies to set a science-based target based on the required decarbonisation trajectory of their sector, or the sectors in which they each operate. This builds upon robust climate change mitigation scenarios developed by the Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA), which are based on the best available science and analysis from around the world. These same scenarios underpin national and international climate change policy decisions.

The SDA takes into account the potential for sectors to reduce emissions through improved efficiency and new technology, factoring in future growth projections and market share for different geographies. Based on this companies can then calculate the level of emissions reductions that they themselves will need to achieve to put their sector on track for a below 2°C pathway.

However, the SDA can only be applied in certain sectors at present, so some companies choose to use different approaches (of which several are available and published on the SBTi’s website). But the SDA is increasingly becoming ever more flexible to meet varying business needs, and sector-specific guidance is continually being developed to help overcome barriers to adoption.

In essence, science-based targets build upon the expertise and rigor used to build international scientific consensus, combining it with a transparent approach to allocate a fair share of reductions to a company. This means that a business is now able to credibly demonstrate that it is doing its fair share in efforts to achieve the ambitions of the Paris Agreement.

This is the second in a series of five articles on science-based targets, first published in 2016 and updated with the latest developments:

Part 1: Why do we need science-based targets on climate change?
Part 2: What exactly is a science-based target?
Part 3: Why should a company set a science-based target?
Part 4: How do you make the internal business case to set a science-based target?
Part 5: How does setting a science based target fit in with your wider sustainability strategy?