When you look at reports showing how the earth is heating fast, loss of diversity, and extensive droughts, what runs through your mind? Climate change is real, and we are now being warned that the world is heading to a serious crisis. The biggest cause of global warming is the greenhouse gasses (GHG), especially carbon dioxide that traps heat in the lower levels of the atmosphere. To address this challenge, the solution is cutting down emissions to neutral or negative rates.
Businesses have a bigger role to play in cutting down emissions, but they cannot be left to simply do it on their own. This is why new laws, frameworks, and initiatives are being developed to guide the process of emission reduction. Some of these initiatives include the Task Force on Climate-Related Disclosures (TCFD), Global Reporting Initiatives (GRI) and The Science Based Targets initiative (SBTi).
In this post, we take a closer look at the Science Based Targets initiative (SBTi), to answer the main question, “how does it work?”
What is Science Based Targets initiative (SBTi)?
Before we can look at the main steps to follow with SBTi, let's start by understanding what it is? Science Based Targets initiative (SBTi) is a clearly defined pathway that businesses and financial organizations can use to cut down greenhouse gasses. The targets' primary objectives are helping to wrestle down the threat of global warming & climate change and supporting business growth.
The targets are built in line with the best practices, factoring in the causes of failure for precious networks, especially the Kyoto Protocol. Therefore, these targets are science-based and in line with the Paris Agreement, which aims to keep the global temperatures below 2°C above pre-industrial levels. They also focus on further pulling down warming towards the 1.5°C. Here are the main objectives of the Science Based Targets initiative (SBTi).
- Promoting the adoption of scientific target setting in addressing the problem of global warming.
- Offering technical assistance and professional resources to businesses and financial organizations.
- Helping to bring together professionals to provide independent evaluation for emission reduction.
Special Benefits of Using the Science Based Targets initiative (SBTi)
As we indicated earlier, there are many initiatives and frameworks that you can pick to help you in cutting down carbon footprint. However, Science Based Targets initiative (SBTi) stands out from the pack because it comes with the following benefits.
- Improving Brand Reputation
Consumers, investors, and other business stakeholders are now wiser and focused on making responsible decisions. Before getting involved with a company, whether buying its stock or products, they check back to ensure it is sustainable. Using the Science Based Targets initiative (SBTi) gives stakeholders the assurance that your company is committed to sustainability, especially in helping to cut down emission rates. 79%of company managers believe that committing a company to the Science Based Targets initiative (SBTi) can help to strengthen its brand reputation.
- Improving Investor Confidence
Today, investors are taking a lot of interest in environmental policies. They hold the view that only the brands with focus on sustainability can yield long-term results. When using the Science Based Targets initiative (SBTi), companies start with reviews of their operations to identify opportunities, not just the short-term but also the long-term ones. 52% of company executives hold the view that SBTi helps to boost investor confidence.
- Compliance with Regulations
To address the problem of global warming and sustainability-related challenges, governments and other authorities have set out regulations for all businesses to follow. Today, most governments are working hard to align their policies with the Paris Agreement. For example, the EU has passed the Taxonomy regulation that is used to determine if an activity is sustainable or not.
Stock markets, such as Hong Kong Stock Exchange (HKEX) and New York Stock Exchange (NYSE), require all listed companies to prepare regular ESG reports.
The Science Based Targets initiative (SBTi) is one of the frameworks that your company can use to comply with different regulations and policies.
We have only scratched the surface to reveal the benefits above. The list can be way longer, including an increase in innovation, bottom-line savings and building greater competitiveness.
The Main Steps Used for Science Based Targets initiative (SBTi)
Now that you know the main benefits that come with using the Science Based Targets initiative (SBTi), how can you use it? Here are the main steps to follow:
- Laying solid foundations: This is the first, and we must say, the most important step when implementing Science Based Targets initiative (SBTi). Consider setting out a budget and determining those who will be involved at this stage. This might be a good idea to bring on board an expert.
- Identifying your target-setting approach: The second step requires you to comprehensively review your company and craft a strategy that is in line with your brand’s mission. Again, an expert would come in handy to help with strategy development and its implementation.
- Setting the target: You can set to reduce emissions within a specific level depending on the nature of the enterprise. It will be a good idea to set a zero or negative carbon footprint target.
- Mapping your reduction trajectory: Having already set the emission reduction target, you need to pinpoint key performance indicators to be able to follow progress. You should also work with appropriate sustainability management software to map the trajectory. This will help you to know when to make changes along the way so that the main target remains in sight.
- Gaining SBTi validation: Finally, you need to create the report that captures the details of the entire process and the results achieved. Make sure the report is readable and information presented therein verifiable. When the process is executed well and the report created correctly, a Science Based Targets initiative (SBTi) validation will be provided.
Use the Best Sustainability Reporting Software when Using SBTi
As you can see, the Science Based Targets initiative (SBTi) is a very effective sustainability reporting model, but we must say that a lot of companies find it challenging to implement. New entrepreneurs and executive managers find it tough not just because of the complex design, but also the multiple tasks that require their attention. The process of data gathering, analysis and presentation can be pretty challenging.
If you try to implement the program manually, there is a risk of the report getting labeled greenwashed.
The best way to handle the process is to work with advanced sustainability reporting software. A good app not only simplifies the process of data collection but also the analysis so that information is clear, accurate, and verifiable. Other reasons for using a sustainability management app include:
- It simplifies the process of following the Science Based Targets initiative (SBTi).
- You can automate some parts of data gathering to simplify the process.
- It makes it easy to adhere to the sustainability reporting principles.
- You can produce mini reports for assessing the progress of your sustainability efforts.
- Scaling your sustainability efforts, perhaps when your company expands to the neighboring countries, is easy when using good software.
If you want your business to succeed, make sustainability part of its long-term objective. Using the Science Based Targets initiative (SBTi), it is possible to set targets for cutting down emissions and achieve them.
Make sure to have an appropriate sustainability reporting program for simplifying the data collection and analysis. Again, you should consider bringing on board a professional in sustainability. At Diginex.com, we have the best programs and professionals to provide all the assistance you need.