16 April 2020
Streamlined Science-based targets for small and medium enterprises
Science-based targets (SBTs) have been used by large companies since 2015 when the Science Based Targets initiative (SBTi) was set up in the run-up to the Paris climate change conference. The process of setting a science-based target involves committing to a reduction of Scope 1, 2 and 3 GHG emissions in line with climate science, limiting global warming to well below 2 degrees above pre-industrial levels. Once a company commits to setting an SBT it must be validated by the SBTi and published within 24 months.
As reported by the WWF (see article here), a streamlined route for small and medium sized enterprises has recently been developed (“SMEs” are defined as a non-subsidiary, independent company which employs fewer than 500 employees). This streamlined reporting enables SMEs to select an SBT for scope 1 and 2 emissions from a set of several predefined target options, which reduces the burden of setting and validating a target. The SME route also eliminates the requirement to set targets for scope 3 emissions (though a commitment to measure and reduce scope 3 emissions is still required). This enables smaller companies who may not have the capacity and resources to participate in setting SBTs without the burden of the full large company process.
According to the World Bank, SMEs make up about 90% of businesses. In our view, SME contributions to committing to a lower carbon future will significantly impact the overall carbon picture going forwards, and making reporting initiatives easier for smaller companies that do not have dedicated sustainability teams is a welcome change to encourage wider adoption.