Published on September 18th, 2018 | by Joshua S Hill0
More Than 130 Companies Have Made Science-Based Targets This Year Alone
September 18th, 2018 by Joshua S Hill
Since the beginning of the year, more than 130 new companies have joined the Science Based Targets initiative, pushing the total number of companies close to 500 and representative of approximately one-eighth of total global market capitalization.
The Science Based Targets initiative (SBTi) was first launched back in September of 2014 by Carbon Disclosure Project (CDP), the United Nations Global Compact, World Resources Institute, the World Wide Fund for Nature, and now in partnership with the We Mean Business coalition, with the aim of developing “a methodology that will help companies to set targets to cut down on greenhouse gas emissions.”
Over that time, and especially since the landmark Paris Agreement was drafted in 2015 and put into action the following year, the SBTi has grown from strength to strength, and now boasts nearly 500 companies from around the world (from 38 countries) which have committed to enacting science-based targets approved by the initiative.
Even more impressive is that more than 130 new corporations have made science-based emissions reduction commitments this year alone, a 39% increase from the same period last year. Nearly a fifth of Fortune Global 500 companies have committed to set science-based targets, including this year alone big names such as McDonald’s, IKEA, and AB InBev. Altogether, the combined market capitalization of those companies that have joined the Science Based Targets initiative amounts to nearly $10 trillion.
“This is a pivotal year for global climate action. Nearly three years after the world came together for the historic Paris Agreement, the race is on to meet its goal of restricting global temperature rise to below 2°C and heading off the worst effects of climate change,” said Anand Mahindra, CEO of the Mahindra Group and co-chair of the Global Climate Action Summit held California last week at which the news was announced.
“Targets based on science are the only effective way to meet the challenges we face. Around the world, hundreds of businesses are already showing that this is possible with substantial benefits to brand reputation and the bottom line. I urge all other companies to join this initiative immediately; the time for science-based action is now.”
What’s even more important, however, is the belief within the Initiative that the current momentum is not likely to run into a wall anytime soon.
“Yes, the momentum for science-based targets is growing at pace. 130 new companies joined the initiative between January and August 2018, with commitments to set science-based targets within two years,” said Alexander Farsan, Global Lead, Science Based Targets, WWF, one of the Science Based Targets initiative partners. “This is a 39% jump from the same period in 2017, so interest is clearly snowballing. We fully expect this trend to continue. And it’s critical that it does – with global emissions needing to peak by 2020 at the latest and start declining rapidly afterwards.
“So far in 2018, the number of companies committing to set science-based targets is up almost 40% compared to last year, with 130 new commitments,” Farsan added. “In particular we’re seeing huge momentum in India, which has had a four-fold increase in commitments since January 2018 – rising from 6 to 24. Globally, we’ve seen the monthly rate of company commitments go up from an average of 13 per month between February-August 2017, to an average of 18 per month between February-August 2018. We can be confident this trend will continue apace as more and more corporate leaders realise the business imperative of future-proofing their business with a science-based target.”
As for the idea that implementing science-based targets creates unnecessary burdens for companies who choose this direction, nothing could be further from the truth.
“A recent YouGov survey on business executives who have set or committed to set a science-based target showed that, far from viewing it as a burden, they consider it to offer significant business benefits,” said Farsan. “79% of respondents said brand value was a key benefit, 63% said it drives innovation and 29% said it has benefited the bottom line. Science-based targets are not supposed to be easy – they represent a fundamental shift for businesses and the process of setting them is a significant undertaking, requiring buy-in from the very top as with any major business decision. But this is about planning for the future, and going through this process now will help ensure future profitability and viability as the global economy continues in its inevitable and irreversible transition.”