Over the first two entries this month, we’ve discussed the rising pressures on firms to develop a climate risk strategy and how to get started measuring emissions. Target setting is the next logical step to discuss. Firms that put a stake in the ground and decide to commit to reducing emissions find numerous positive outcomes as a result of this strategic decision.
Emission reduction targets help to achieve our goals, many of which result in product/service differentiation and increased customer goodwill. But don’t overlook the substantial cost savings involved in lowering emissions. According to a joint report published by the World Wildlife Fund (WWF) and CDP (formerly Carbon Disclosure Project), U.S. businesses that commit to annually cutting their greenhouse gas (GHG) emissions can collectively reap as much as $190 billion in annual savings from reduced energy bills, increased productivity, and other associated benefits.
What type of emissions reduction goal(s) should your company set? While the current global standard for goal-setting is the Science-Based Target Initiative, your goal should reflect the maturity of your company’s sustainability program.
For example, you could commit to:
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Cut carbon intensity per revenue in half by 2030.
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Achieve a 20 percent absolute reduction in emissions by 2030.
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Achieve a science-based target by reducing absolute emissions by 35 percent by 2030 and 80 percent by 2050.
The examples above may or may not fit your climate strategy. Each individual firm needs to determine the scope, timeline, and type of goal that makes sense for your company and products.
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