Science Based Targets Initiative (SBTi)-A Scientific Approach to Define and Achieve the Carbon Emissions Reduction Targets
| Case Code: BECG179
Case Length: 20 Pages
Pub Date: 2023
Teaching Note: Available
| Price: Rs.500
Organization: Science Based Targets Initiative (SBTi)
Countries: United Kingdom
Themes: Sustainability, Sustainable Innovation
Abstract Case Intro 1 Case Intro 2 Excerpts
The Paris Agreement
The Paris Agreement was an accord established by both developed and developing nations to curb pollution and safeguard the environment. This agreement served as an all-encompassing framework outlining the policies and procedures to be adhered to by member nations, with the primary objective of safeguarding the environment from climate change and global warming impacts..
SBTi was a step taken by leading non-profit organizations engaged in protecting and sustaining the global environmental systems. They were the Carbon Disclosure Project (CDP), the United Nations Global Compact (UNGC), the World Resources Institute (WRI), the World Wide Fund for Nature Inc. (WWFN)..
SBTi Target Setting Process
SBTi brought together several private sector companies to commit themselves to reducing carbon emissions by following the scientific procedures designed and developed by SBTi. Those companies had to submit a letter of intent to SBTi expressing their commitment to SBT..
SBTi followed a three-stage approach. In the first stage, it provided technical support to companies for setting up the SBTs and then validated and approved the targets for implementation. In the third and final stage, many companies were expected to follow SBTs as a standard practice..
Creating the Critical Mass
To bring the desired change among the corporate entities, SBTi based its approach on the diffusion of innovation theory; SBTi believed that the creation of a critical mass of companies committing to the carbon emissions reduction strategies could affect the other companies to adopt and follow the strategies being followed by the critical mass of companies, industry-wise, economy-wise, and region-wise..
Are the Commitments and Approvals Impactful?
The major challenge for SBTi lay in ensuring that the companies achieved the approved targets. SBTi was yet to develop a framework for reporting and disclosing the approved targets within a time frame. In a survey conducted during the year 2021 among a select number of companies, it was observed that around 76% of the companies were achieving the targets. However, systematic and credible evidence was not available to ensure the actual achievements of the companies..
Challenges and Road Ahead
The Covid-19 pandemic and subsequent lockdowns and operational breakdown of the business entities resulted in a temporary decline of carbon emissions during the calendar years 2020 and 2021. However, after slowly recovering from the pandemic, an increase in carbon emissions was observed. Hence, it was thought high time for all stakeholders, especially business organizations, to commit themselves to formulating carbon emissions reduction strategies and to be a part of net-zero reductions as per the Paris Agreement..
Exhibit I: Representation of Countries and their Commitments and Targets under Paris Agreement
Exhibit II: Commitments and Approvals Trends of SBTs among the Global Private Companies through SBTi(2015-2021)
Exhibit III: Causes and Effects of Climate Change
Exhibit IV: Significant Events at the Global toward Climate Change Initiatives
Exhibit V: Key Components of the Paris Agreement*
Exhibit VI: Profiles of WMB Partner Organizations
Exhibit VII: Organizational Structure Of SBTi
Exhibit VIII: SBTi Target Setting Process
Exhibit IX: Technical Assistance and Resources Provided by SBTi
Exhibit X: Different Sectors Covered under SBTi
Exhibit XI: Region-wise Creation of Critical Mass of Companies*
Exhibit XII: Industry-wise Creation of Critical Mass of Companies*
Exhibit XIII: Trend among Top 10 OECD Countries towards Crossing Threshold Limit of SBTi*
Exhibit XIV: Trend among Top 10 – Non OECD Countries towards Crossing Threshold Limit of SBTi*
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