Emission reduction pathways for firms

Businesses have a crucial role to play in the drive to decarbonise the world economy and tame the effects of climate change.

While many firms may be willing to lift their own weight in this drive, most are unsure and have no tools to drive this agenda. They simply lack the roadmap and strategies to get them there. A good place to get them started is by adopting standardised climate targets. These include carbon neutrality, science-based targets, and net zero emissions.

I will shed light on each one of them, starting off with carbon neutral targets. Here, organisations are required to balance man-made greenhouse gas emissions that result from their operations by either sequestering, avoiding, or removing an equivalent amount of emissions with the help of carbon credits. While the concept is fairly understood, there are multiple standards and certifications for carbon neutral commitments that may not be known to corporations.

This means each organisation’s target may differ in a number of ways, including emissions quantification methods and scopes covered by the commitment. Variation may also arise in timelines for achieving the target. Generally, organisations should develop long-term emissions reduction plan.

To hit a carbon neutral target, it is best practice for enterprises to measure their carbon footprint in line with an established methodology and take steps to reduce their internal emissions. They also have the option to purchase carbon credits to net out any unabated emissions on an annual basis.

Some enterprises may place additional criteria or restrictions on their use of carbon credits, such as limiting the type of emissions reductions projects that they support. Carbon credits, also known as carbon offsets or verified emissions reductions (VERs), including nature-based solutions, carbon removals and value chain interventions, can play a key role in meeting these commitments. This is particularly so when it comes to addressing unabated or residual emissions. Residual emissions are the unabated emissions that remain after an organisation has made all “technologically and economically feasible” reductions required to limit temperature rise to 1.5°C.

It is important to understand that carbon neutral claims invite significant scrutiny, which is why careful consideration must be made in terms of the scope, defensibility, and transparency of such claims.

Next is science-based targets. Similar to carbon neutrality and net-zero targets, science targets start with establishing a baseline of the organisation’s carbon inventory over a set timeframe. The term “science-based target” is used to describe targets that reduce emissions in line with the latest climate science, typically pursuing efforts to limit warming to 1.5°C. A science-based target provides companies with near-term direction for internal emissions reductions.

Many companies that pursue a science-based target follow criteria from the Science Based Target Initiative (SBTi), a collaboration between CDP, World Resources Institute, the World Wide Fund for Nature, and the United Nations Global Compact. The SBTi initiative requires an organisation to set targets that look out five to 15 years, and to reassess the targets every five years to make sure they are still aligned with the most recent climate science. It also requires that World Resource Institute’s greenhouse gas protocol – Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard – be used to quantify emissions.

Lastly, we have the net-zero targets.

This has only recently been identified as a commitment that is distinct from carbon neutrality. Net zero as a corporate commitment is still being defined, but there is general agreement that it involves reducing emissions in line with climate science and balancing any residual emissions with an equal amount of emissions removed from the atmosphere. Achieving a state of net zero involves reducing all “technologically and economically feasible” emissions in line with limiting warming to 1.5°C and balancing any residual emissions with carbon removals. Organisations are also encouraged to support projects that reduce and avoid emissions on their pathway to a net zero target, particularly over the next decade.

While 2050 represents the target for global net zero, there are open questions regarding whether certain industries or organisations should be working to achieve this well ahead of that timeline.

Whereas climate change may be viewed as a slow-burn crisis, compared to Covid-19, for instance, which blew up quickly and widely, climate crisis could be more catastrophic if no strategic and sufficient interventions are taken.

The fact that businesses are big emitters, there’s urgency for the private sector to reduce emissions as quickly as possible. Thankfully, various frameworks are continuing to be developed to help these organisations mobilise around strategies and targets to reduce their carbon emissions.

This article was originally published by the Business Daily

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