Carbon targets

How modern businesses are setting carbon targets

Samuel Wrest

Every company has a carbon footprint - and need to commit to action

Almost equally important is the more tangible nature of setting carbon goals. For their targets to be classified as science-based, organisations know they must keep their impact on global warming to below 2°C, making the initial goal setting process easier than some of the other SDGs. As the Sustainability Director at a consumer company said on a recent conference call with Sustainability Leaders: “With carbon, we already knew what we had to achieve, which makes establishing targets much simpler.”

But while companies may understand what to achieve with carbon, how they do so remains a challenge. Many organisations have a good grasp of their emissions from controlled sources and purchased energy (or scope 1 and 2), but there are huge quantities of CO2 in their value chains that they have historically had little visibility or control over. This includes upstream in their supply chains, and downstream in their consumer bases (or scope 3 emissions).

It is for this reason that, when choosing their targets, many companies separate their scope 1 and 2 goals from Scope 3. Targets in the former are often more ambitious than the latter because of the complexities and quantities associated with Scope 3 emissions.

The Senior Sustainability Analyst at a technology multinational explains how this plays out in their company. “5% of our footprint is in our own operations (Scope 1 and 2),” they say. “10% is in our supply chain and the remaining 85% occurs with consumers during the use of our products. Scope 1 and 2 are therefore more within our direct span of control, which means we can make faster progress there.”

This has resulted in the company setting two targets:

  • Reduce absolute scope 1 and scope 2 emissions by 75% by 2025 and 90% by 2040.
  • Reduce absolute scope 3 emissions by 4% by 2025 and 11% by 2040.

The amount of CO2 in each scope affects how much needs to be reduced. For example, while the percentage reductions are higher in Scope 1 and 2, the overall CO2 being reduced in Scope 3 is greater because of the higher CO2 levels there. A similar approach is being taking across multiple industries to ensure contributions to global warming are kept below 2°C.

How are targets being achieved?

Reducing emissions requires the support of multiple functions around the business. For companies with footprints concentrated upstream in their supply chains, for instance, involving procurement and changing sourcing practices is essential to make progress. “You must understand the business’s end-to-end footprint,” the Sustainable Sourcing Director at a confectionary company explained to Sustainability Leaders. “And when it comes to working upstream in the value chain on this topic, procurement can make a significant impact.”

In the example of the technology company, a lot of work focuses on improving the energy efficiency of its products because of its large consumer footprint. R&D now follows an eco-design process where products must enhance environmental performance in at least one of five ways: on energy, packaging, substances, weight & materials, or circularity. There is currently a goal that all product introductions meet this eco-design requirement by 2025.

Understanding which functions are necessary for the company’s carbon targets to be met is essential. While corporate sustainability teams may have a clear understanding of what needs to be achieved, doing so requires that multiple parts of the business contribute. Leaders must ensure that different functions are aligned and work together on the business’s targets.

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