Building a decarbonisation strategy
As climate action moves from ambition to execution, businesses are under growing pressure to demonstrate credible emissions reductions. The Science Based Targets initiative (SBTi) provides a robust framework for companies to set and achieve decarbonisation goals aligned with the 1.5°C pathway outlined in the Paris Agreement.
A decarbonisation strategy grounded in SBTi principles not only reduces climate risks but also builds resilience, strengthens brand reputation, and unlocks innovation. Here’s how organizations can develop one.
Step 1: Understand the SBTi Framework
The SBTi helps companies align their emissions targets with climate science. To be approved, targets must:
Be consistent with limiting warming to 1.5°C (or well-below 2°C, depending on sector).
Cover all relevant scopes (Scope 1, 2, and, where material, Scope 3).
Follow sector-specific guidance (e.g., power generation, transport, buildings).
Be time-bound, typically 5–15 years into the future.
Step 2: Establish a Robust Baseline
Before setting targets, companies must calculate a baseline emissions inventory in line with the GHG Protocol. This means measuring:
Scope 1: Direct emissions (on-site fuel use, company vehicles).
Scope 2: Purchased electricity, steam, heating, and cooling.
Scope 3: Value chain emissions (business travel, supply chain, product use, waste, etc.).
This baseline becomes the reference point against which progress is measured.
Step 3: Set Science-Based Targets
Using the SBTi methodology, companies choose an emissions reduction pathway. Common approaches include:
Absolute Contraction Approach: Reducing emissions by a set percentage (e.g., 42% by 2030 for 1.5°C alignment).
Sectoral Decarbonisation Approach (SDA): Pathways tailored to specific industries like steel, cement, or aviation.
Intensity Targets: Reducing emissions per unit of output (e.g., kg CO₂e per product), but only acceptable when paired with absolute reductions.
Targets must be submitted to the SBTi for validation before they can be publicly claimed.
Step 4: Develop an Implementation Roadmap
Setting a target is only the beginning. Companies need a clear roadmap that links ambition to action. Key levers include:
Energy efficiency: Retrofitting buildings, upgrading equipment, optimizing processes.
Renewable energy: On-site solar, corporate PPAs, or green power procurement.
Electrification: Switching company fleets and industrial processes from fossil fuels to electricity.
Supply chain engagement: Working with suppliers to reduce upstream Scope 3 emissions.
Product innovation: Designing lower-carbon products and circular business models.
Step 5: Integrate into Business Strategy
Decarbonisation must be embedded into core operations, not treated as a side project. This means:
Linking emissions reductions to capital allocation and investment decisions.
Embedding climate goals into executive KPIs and governance structures.
Training employees and aligning incentives with sustainability performance.
Communicating transparently with stakeholders through sustainability reports and disclosures (CDP, TCFD, CSRD, etc.).
Step 6: Track Progress and Adjust
SBTi requires annual reporting of progress. Companies should:
Monitor actual emissions against the baseline.
Use tools like carbon accounting software to improve accuracy.
Update strategies based on changes in business operations, regulations, and technology availability.
Re-submit targets every 5 years to stay aligned with the latest climate science.
Final Thoughts
A decarbonisation strategy aligned with the Science Based Targets initiative provides a credible, science-based pathway for organizations to thrive in a low-carbon economy. By setting ambitious yet achievable goals, embedding them in strategy, and reporting transparently, businesses can reduce risks, unlock growth opportunities, and play their part in keeping global warming to 1.5°C.