Each year, Investa Office Management releases its corporate sustainability report.
In 2016, it announced that electricity use was down by 43% since 2004,
gas use had fallen 38% over the same time, and water use had also being
curtailed.
This sounds impressive but how meaningful are those proclamations? And what difference do they make in the wider context? Now an international movement is urging businesses to take an evidence-based approach to their green strategies, by setting emissions reduction goals in line with climate science. The goal is to encourage the business sector to close the emissions gap left by shortfalls in country-level commitments to the Paris climate agreement.
The push is being led by the Science Based Targets initiative – a partnership between CDP (formerly the Carbon Disclosure Project), UN Global Compact, the World Resources Institute and WWF – as well as the We Mean Business coalition. Some of the companies signed up include global behemoths Mars, Kellogg’s, Renault, L’Oréal, AstraZeneca, Sony and Ikea.
“Companies, especially the large multinational companies, have been communicating about their emissions footprint for many years now,” says Vincent Hoen, managing consultant of Corporate Climate Action at Ecofys, a Dutch energy and climate consultancy. But “it wasn’t clear what the contribution of the company would need to be to stay in line with climate science,” he says.
A science-based target is one that limits a business’s global share of greenhouse gas emissions to keep warming to well below 2C above pre-industrial levels. This threshold has been widely adopted in international climate policy, including the Paris climate agreement, which Australia ratified in November last year.
Setting science-based targets “gives a lot of credibility to a [company’s] climate strategy,” says Hoen. Unlike previous programs such as the Carbon Disclosure Project, the SBT initiative directly ties corporate emissions goals to the Paris Agreement’s 2C target.
Ecofys, with others, came up with the sectoral decarbonization approach (SDA), the methodology behind the SBT initiative. It works off the global carbon budget of 1tn tonnes, over half of which has already been emitted. Modelling by the International Energy Agency allocates a share of the carbon budget to different industries, and the SDA translates that into company-level targets.
“Globally, it’s been a very popular initiative,” says Monica Richter, climate change business engagement manager at WWF-Australia. “We’ve been overwhelmed by company responses.”
So far, 215 businesses have publically committed to setting science-based targets, seven in Australia. These are Australian Ethical Investment, Westpac, Origin Energy, Bank Australia, Investa, Infigen Energy and Teachers Mutual Bank.
“There’s not a large uptake in Australia yet, but you can see the movement starting to happen,” says Jonas Bengtsson, chief executive and co-founder of Sydney-based environmental consultancy Edge Environment. Edge has partnered with Ecofys to champion the initiative in Australia.
Bengtsson is optimistic that numbers will grow. “It’s a very easy sell for companies to get on board with this,” he says. “With the lack of carbon regulation or mechanisms to drive the agreed and necessary change [at the policy level], I think businesses see that they need this predictability for planning purposes and also they have an opportunity to lobby and influence the direction that government is going to take.”
For most businesses, change usually starts with simple initiatives such as energy efficiency and conservation. This could mean support for telecommuting for office workers, less idling of trucks, or creating incentives for manufacturing managers to run production lines more efficiently. “You really want to do the cheaper or cost-positive options first,” says Bengtsson, so that “you get the best bang for your buck in terms of reducing carbon.”
Risk is another consideration for business. “Climate risk has been identified as a serious business risk, so setting science-based targets is really important from a business risk point of view,” he says. Climate change can directly threaten business operations, through increased extreme weather events for example. But businesses also face risks if they are unprepared for policy changes that limit emissions or favour low-carbon technologies. Reputational risk can also harm a business’s bottom line.
Because targets can be tailored to different business types, the SBT initiative has attracted a broad range of companies. “It’s across all industry sectors, from power generation to the property sector, to manufacturing and food,” says Richter.
The financial sector is taking a lead, with several banks in Australia setting science-based emissions targets, although these don’t currently cover emissions from investment portfolios. “The financial sector has an important role to play in assisting the transition to a low-carbon economy,” says Nicola Murphy, head of environmental sustainability at NAB. NAB’s target is to reduce emissions by 21% from 2015 levels by 2025.
Investa Office Management has also announced a science-based target of net zero carbon emissions by 2040 across its $10bn portfolio of buildings and operations.
Businesses aren’t the only ones getting on-board. In 2016, the City of Melbourne made science-based targets part of its 2016-2021 strategy. A previous target of a 10% cut of 2010 emission levels by 2018 has been replaced by a more ambitious target of 4.5% per year, which will mean a 34% cut in emissions over the 10 years to 2020.
“Cities are leading the charge, where often nations or other levels of government aren’t,” says councillor Cathy Oke, who chairs the city’s environment portfolio.
Street lights are a top priority, accounting for 39% of the city’s operational emissions. Over the next three years, all of the city’s 16,000 street lights will be upgraded to LED.
The SBT initiative’s initial goal is for 250 companies to have set science-based targets by 2020. But ultimately, says Richter, they would like to see science-based targets become standard business practice.
This sounds impressive but how meaningful are those proclamations? And what difference do they make in the wider context? Now an international movement is urging businesses to take an evidence-based approach to their green strategies, by setting emissions reduction goals in line with climate science. The goal is to encourage the business sector to close the emissions gap left by shortfalls in country-level commitments to the Paris climate agreement.
The push is being led by the Science Based Targets initiative – a partnership between CDP (formerly the Carbon Disclosure Project), UN Global Compact, the World Resources Institute and WWF – as well as the We Mean Business coalition. Some of the companies signed up include global behemoths Mars, Kellogg’s, Renault, L’Oréal, AstraZeneca, Sony and Ikea.
“Companies, especially the large multinational companies, have been communicating about their emissions footprint for many years now,” says Vincent Hoen, managing consultant of Corporate Climate Action at Ecofys, a Dutch energy and climate consultancy. But “it wasn’t clear what the contribution of the company would need to be to stay in line with climate science,” he says.
A science-based target is one that limits a business’s global share of greenhouse gas emissions to keep warming to well below 2C above pre-industrial levels. This threshold has been widely adopted in international climate policy, including the Paris climate agreement, which Australia ratified in November last year.
Setting science-based targets “gives a lot of credibility to a [company’s] climate strategy,” says Hoen. Unlike previous programs such as the Carbon Disclosure Project, the SBT initiative directly ties corporate emissions goals to the Paris Agreement’s 2C target.
Ecofys, with others, came up with the sectoral decarbonization approach (SDA), the methodology behind the SBT initiative. It works off the global carbon budget of 1tn tonnes, over half of which has already been emitted. Modelling by the International Energy Agency allocates a share of the carbon budget to different industries, and the SDA translates that into company-level targets.
“Globally, it’s been a very popular initiative,” says Monica Richter, climate change business engagement manager at WWF-Australia. “We’ve been overwhelmed by company responses.”
So far, 215 businesses have publically committed to setting science-based targets, seven in Australia. These are Australian Ethical Investment, Westpac, Origin Energy, Bank Australia, Investa, Infigen Energy and Teachers Mutual Bank.
“There’s not a large uptake in Australia yet, but you can see the movement starting to happen,” says Jonas Bengtsson, chief executive and co-founder of Sydney-based environmental consultancy Edge Environment. Edge has partnered with Ecofys to champion the initiative in Australia.
Bengtsson is optimistic that numbers will grow. “It’s a very easy sell for companies to get on board with this,” he says. “With the lack of carbon regulation or mechanisms to drive the agreed and necessary change [at the policy level], I think businesses see that they need this predictability for planning purposes and also they have an opportunity to lobby and influence the direction that government is going to take.”
For most businesses, change usually starts with simple initiatives such as energy efficiency and conservation. This could mean support for telecommuting for office workers, less idling of trucks, or creating incentives for manufacturing managers to run production lines more efficiently. “You really want to do the cheaper or cost-positive options first,” says Bengtsson, so that “you get the best bang for your buck in terms of reducing carbon.”
Risk is another consideration for business. “Climate risk has been identified as a serious business risk, so setting science-based targets is really important from a business risk point of view,” he says. Climate change can directly threaten business operations, through increased extreme weather events for example. But businesses also face risks if they are unprepared for policy changes that limit emissions or favour low-carbon technologies. Reputational risk can also harm a business’s bottom line.
Because targets can be tailored to different business types, the SBT initiative has attracted a broad range of companies. “It’s across all industry sectors, from power generation to the property sector, to manufacturing and food,” says Richter.
The financial sector is taking a lead, with several banks in Australia setting science-based emissions targets, although these don’t currently cover emissions from investment portfolios. “The financial sector has an important role to play in assisting the transition to a low-carbon economy,” says Nicola Murphy, head of environmental sustainability at NAB. NAB’s target is to reduce emissions by 21% from 2015 levels by 2025.
Investa Office Management has also announced a science-based target of net zero carbon emissions by 2040 across its $10bn portfolio of buildings and operations.
Businesses aren’t the only ones getting on-board. In 2016, the City of Melbourne made science-based targets part of its 2016-2021 strategy. A previous target of a 10% cut of 2010 emission levels by 2018 has been replaced by a more ambitious target of 4.5% per year, which will mean a 34% cut in emissions over the 10 years to 2020.
“Cities are leading the charge, where often nations or other levels of government aren’t,” says councillor Cathy Oke, who chairs the city’s environment portfolio.
Street lights are a top priority, accounting for 39% of the city’s operational emissions. Over the next three years, all of the city’s 16,000 street lights will be upgraded to LED.
The SBT initiative’s initial goal is for 250 companies to have set science-based targets by 2020. But ultimately, says Richter, they would like to see science-based targets become standard business practice.
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