By Monica Richter, Senior Manager-Low Carbon Futures, WWF-Australia
Humanity is at a crossroads to create a climate safe future for current and future generations. This is a call to action requiring all hands-on deck to do everything we can to keep warming as close to 1.5°C as we possibly can. Every tenth of a degree matters!
With the United Nations Framework Convention on Climate Change Conference of Parties (COP) coming up next week (1-12 November), all eyes will be on our governments to demonstrate the seriousness of their commitments to set and drive ambitious climate plans. Business leaders around the world are also stepping up to demonstrate that they can and will help society deliver a carbon safe future.
At WWF-Australia, we support companies that recognise the benefits of acting on climate change and are prepared to take the steps needed to cut emissions throughout their value chain. The Science Based Targets Initiative (SBTi) helps businesses on their path to align with a 1.5°C world and achieve net-zero emissions before 2050. With the launch of the Net-Zero Standard, this will harmonise the language and expectations around companies’ net-zero commitments. It will also set clear expectations on what is a science-aligned long term Net Zero Standard.
We are delighted to see that the SBTi is gaining momentum as the gold standard and becoming mainstream for companies wanting to demonstrate their climate ambition and aligning their business to a 1.5°C pathway. Business sentiment has shifted from “why do it” to “how to do it” to drive transformational opportunities.
Since its inception in 2015, we have now over 35 Australian companies that have committed to the journey of setting Science Based Targets and 2,000 companies globally. Uptake has accelerated in the last 12 months alone, with 17 Australian companies beginning their journey through the SBTi. This includes six ASX50 companies such as Brambles, Dexus, Stockland, Telstra, Transurban and Woolworths.
The SBTi is unique for several reasons. For the first time companies have had to grapple with new concepts such as aligning their targets with the climate science and a carbon budget, setting a medium term target within a 10-year timeframe, and considering Scope 3 and value chain emissions. Scope 3 emissions are the result of activities from assets not owned or controlled by the reporting organisation. It’s important to note the complexities of Scope 3 emissions where companies can influence but not control. Collaboration with supply chains is fundamental to success.
The finance sector is also mainstreaming the setting of Science Based Targets by setting greater expectations for publicly listed companies to drive down their emissions including their supply chain with meaningful science aligned medium term targets and actions.
In collaboration with Griffith University and Global Company Network Australia, we are launching our report to showcase the early adopters and share sustainability managers’ experiences in setting the Science Based Targets. We interviewed sustainability managers from 15 Australian companies. Their role as agents of change is fundamental to getting companies over the line to adopt ambitious science aligned targets.
Some key findings are as follows:
- New skills are required to understand the methodologies, the tracking and engagement of scope 3 supply chains, and appropriate carbon accounting frameworks.
- The need to build the internal business case and socialise the opportunities and nature of the transformational change to board directors, upper management, and staff, in particular when the pathways and technologies are not fully known; and
- The use of external influences is vital to help build a business case such as understanding business risk through a climate risk frame, growing customer demand for carbon-friendly products and services, increasing stakeholder expectations, accessing lower cost finance, directors’ duties, and growing reporting demands through e.g., Task Force on Climate-related Financial Disclosures.
The early adopters we have highlighted in the research launched today have proven that net zero and science aligned emissions target setting can be done and makes business sense. The next era for net zero emissions for companies will see Science Based Targets as standard business practice across the globe.
To learn more read the full report.