Four years ago, a group of nonprofits launched the Science Based Targets Initiative, a project designed to convince corporations to set targets to cut emissions in line with the goals of the Paris climate agreement. Nine companies had targets approved by the end of the first year after the launch. As of today, more than 700 large companies have signed on, and more than 300 of those—from Ikea and Microsoft to the meat giant Tyson Foods and McDonald’s—have targets that have been approved by the organization.
A new report looks at the growth and scale of the initiative, which aims to make this type of science-based goal-setting standard business practice. “There’s some really great signs of the private sector taking leadership on climate ambition,” says Alexander Farsan, global lead for science-based targets at World Wildlife Fund, one of the nonprofits behind the initiative. Right now, global leaders at a UN climate conference are discussing how governments can take more action. The report highlights some of what’s happening in the world of business.
Governments and regulators need to step up their ambition to then enable companies to set up the ambition as well and really create what we call an ‘ambition loop.’”
As of the end of October, 285 companies had set hard targets. Those companies produce 752 million metric tons of annual direct emissions—as much as 193 coal power plants. Their commitments will eliminate 265 million metric tons and put $18 billion into mitigation. Roughly a quarter of the companies have adopted targets in line with the most ambitious part of the Paris agreement—limiting warming to 1.5 degrees Celsius. Several companies plan to cut emissions not just at their companies but throughout their supply chains, which are responsible for another 3.9 billion metric tons of climate pollution.
In some sectors, the targets have become common. Nestlé, Coca-Cola, PepsiCo., and other large food and beverage companies have set targets. (Of the largest food, beverage, and agriculture companies by market capitalization, eight out of 10 have committed or set targets.) There are early adopters in other industries, including Heidelberg Cement and Enel, a multinational energy company.
Since businesses are responsible for the majority of the world’s emissions and can often deploy solutions more quickly than governments, getting companies to commit to ambitious targets is critical. But for these commitments to become ubiquitous, Farsan says, governments need to also take action to create a level playing field. “I think that the number one thing that we’re hearing is that governments and regulators need to step up their ambition to then enable companies to set up the ambition as well and really create what we call an ‘ambition loop’—a virtuous cycle where companies and governments are reinforcing each other’s ambition by demonstrating to each other that the higher level of emission [cuts] is indeed possible.”
As investors become more concerned about climate risk, that pressure will also likely convince more companies to set targets. And as more large companies set targets that involve their whole supply chain, the companies that they work with will continue to follow. “There’s a long way to go, but we’re seeing positive signs that systemic effects are taking place,” he says.