330+ target-setting firms reduce emissions by a quarter in five years

Posted on 26 January 2021

Analysis of 338 companies shows companies with ambitious science-based targets are delivering on Paris-aligned ambition, with emissions reductions at scale.
  • SBTi companies deliver on emissions cuts: companies with science-based targets have reduced their combined emissions by 25% since 2015, contrasting with an increase of 3.4% in global emissions from energy and industrial processes over the same period. 
  • Target-setters are ahead of schedule: since setting a science-based target, a typical SBTi company[1] is reducing annual emissions at a rate that exceeds the rate needed to limit warming to 1.°5C according to pathways derived from climate scenarios. 
  • A milestone year for climate commitments: the rate of adoption of science-based climate commitments doubled in 2020[2] versus 2015-2019.
26 January 2020, London: As global leaders gather for the UN’s Climate Adaptation Summit on climate resilience, new data published by the Science Based Targets initiative (SBTi) shows that companies with science-based targets are delivering on large-scale emissions reductions. Target-setting companies have successfully reduced their emissions by 25% since 2015, a difference of 302 million tonnes of CO2 equivalent, the same as the annual emissions from 78 coal-fired power plants. 
Five years on from the Paris Agreement, the SBTi, of which WWF is a partner, analysed the emissions of a group of 338 companies[3] (including Enel, Mastercard and Tesco) whose climate targets have been approved by the SBTi as aligned with climate science and the goals of the Paris Agreement. This is the first ever study to look at how setting science-based targets correlates with corporate emissions reductions and the extent to which companies are actually delivering on those targets.
SBTi finds that the typical company[4] with SBTs actually slashed direct (scope 1 and 2) emissions at a linear annual rate (6.4%) that exceeds the rate required under the SBTi’s criteria to meet 1.5°C-aligned warming scenarios (4.2%). This shows companies with SBTs are taking climate action at rates that not only meet, but are faster than, the pace of action required by the Paris Agreement. These figures compare to an average increase of around 0.85% per year in global emissions for energy and industrial processes over the same period (see Fig.1 graph below).
New research from the SBTi today suggests that the planned emissions savings of companies with science-based targets are also set to generate US$25.9 billion of new investment into climate mitigation initiatives in the next decade.
Alexander Farsan, Global Lead on Science Based Targets at WWF, one of the SBTi partners said:
“Today’s findings are a mark of progress at the beginning of a critical year for climate action. It shows that companies setting science-based targets are backing these commitments up with action -  delivering the emissions reductions we know are vital if we want to meet the goals of the Paris Agreement. SBTi companies have cut their emissions by a quarter over the last five years - and we need more companies to follow in their footsteps. With COP26 on the horizon, now is the time for the private sector to step up to the plate and follow the science. If a company is genuine about protecting the climate, then it should be setting science-based targets.”

Today’s research also shows that, despite the challenges of COVID-19, 2020 was a milestone year for corporate climate commitments. Over 1,000 companies, making up 20% of global market capitalization, have now set, or committed to set, a science-based target. Companies that joined the SBTi in 2020 included Amazon, Facebook and Ford. The SBTi’s analysis finds that the rate of adoption of science-based targets doubled in 2020 versus the period 2015-2019, with over 370 companies joining the SBTi in 2020[5] at an average rate of 31 per month in 2020.
Additionally, more companies are now setting targets aligned with limiting global warming to 1.5°C than, for instance, a 2°C pathway or other type of target: 41% of all companies with science based targets have 1.5°C-aligned scope 1 and 2 targets.
Progress has been particularly strong in developed economies: in 16 OECD countries, a critical mass of 20% of high-emitting companies setting science-based targets has now been reached. In 2020, this 20% threshold was also reached in six new sectors, including the high-emitting and hard to abate cement and concrete sector. However, there is huge potential to further scale up ambition and improve progress in high-emitting sectors such as construction and automotives.
The global picture also shows commitments are lagging in some regions. In Europe, a critical mass of corporates with Paris-aligned climate commitments has been reached: 34% of all companies with the greatest climate impact have committed to, or set, SBTs in contrast to just 16% in North America and 12% in Asia.
Lila Karbassi, Chief of Programmes at the United Nations Global Compact, one of the SBTi partners, said:
“It is encouraging that, even in the midst of a global pandemic, corporate climate action soared in 2020. COVID-19 has revealed the vulnerability of our current economic model, and showed us that a coordinated global effort led by science is the only way out of such crises. We must channel these learnings into our collective response to the climate crisis. In many sectors and regions, we have reached a ‘critical mass’ of companies making meaningful commitments to reduce emissions, but this needs to be a global and sector-wide effort, supported by ambitious government policy, to truly build back better.”

Figure1: SBTi companies’ scope 1 and 2 emissions have fallen while global emissions from energy and industrial processes have risen.

Notes to editor
For more information, contact Mandy Woods (mwoods@wwfint.org)

About the Science Based Targets initiative 
The Science Based Targets initiative mobilizes companies to set science-based targets and boost their competitive advantage in the transition to the low-carbon economy. It is a collaboration between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF) and one of the We Mean Business Coalition commitments. The initiative defines and promotes best practice in science-based target setting, offers resources and guidance to reduce barriers to adoption, and independently assesses and approves companies’ targets.

www.sciencebasedtargets.org @sciencetargets
[1] ‘Typical SBTi company’ refers to the median percentage among companies in the SBTi at a time.
[2] The 2020 reporting period here refers to November 2019 - October 2020.
[3] 338 companies out of 478 total SBTi companies with targets (SMEs using the streamlined route were excluded) are included in this analysis. Companies that were missing any emissions data between 2015-2019 were excluded. Emissions data was derived from public and private disclosures through CDP, as well as public sources such as sustainability reports. In all cases, emissions data was reported by companies. The reported emissions reductions may be due to any number of factors including concerted emissions reduction efforts, changes in activity levels or types, and changes in business structure.
[4] ‘Typical SBTi company’ refers to the median percentage among companies in the SBTi at a time.
[5] Note that this refers to the reporting period of Nov-2019 to October 2020 and doesn’t include companies that joined SBTi between October 2020-December 2020.
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