What is the issue?
Science Based Targets, an environmental initiative, could go a long way in driving companies to contribute to tackling climate change.
What is 'Science Based Targets'?
- Science Based Targets is a joint initiative of CDP, the UN Global Compact (UNGC), the World Resources Institute (WRI) and WWF.
- It is an initiative to drive corporate climate actions globally.
- It sets emissions reduction targets to ensure that the transformational action is aligned with current climate science.
- It is 'science-based' as it is in line with the scale required to keep global temperature increase below 2°C compared to pre-industrial temperatures.
- ‘Science-based target setting’ is a way of boosting companies’ competitive advantage in transition to a low-carbon economy.
What is the rationale?
- In 2015 Climate Conference, 195 countries signed the Paris Agreement.
- The goal is to limit global temperature rise to below two degrees Celsius.
- This signalled an acceleration in the transition to a low carbon economy.
- However, the private sector needs to take the lead towards this transition.
- Science Based Targets is an effort at this front.
What is the significance?
- India - India has committed to generate at least 40% of its electricity from non-fossil fuel sources.
- A decrease in carbon emission intensity of GDP by 33 to 35% by 2030 has also been committed.
- Indian companies and multinationals operating in India have a major role in this.
- Sixteen Indian companies have committed to set science-based targets.
- They have secured themselves competitive advantage in the transition.
- Some of the world’s biggest companies with significant supply chains in India have also committed.
- These include Kering, Walmart and others.
- Global - Unique to the initiative is the criterion that companies need to commit to setting supply chain or ‘scope 3’ targets.
- If more than 40% of a company’s emissions occur in its supply chain, then it has to commit to reducing those emissions as well as its direct emissions.
- Notably all companies operate within a value chain.
- This has the potential to rapidly escalate the impact of science-based target setting on global emissions.
Source: Business Line
