Chapter 3

Set target

  1. Introduction
  2. Step 1: Understand the fundamentals of net zero target
    1. Understand key concepts around Net Zero
    2. Understand the concept of Net Zero and what it means for your business
    3. Make your net zero targets credible
    4. Set bold, achievable net-zero targets
    5. Examples of well-defined net zero targets
  3. Step 2: Shape short and long-term targets to define your net zero commitment
  4. Step 3: Turn your targets into action
  5. Learn more
WBCSD
Explained byWBCSD

Set bold, achievable net-zero targets

Discover business benefits of setting bold targets

Opportunities in being bold

In addition to doing your part in preventing the destructive scenarios projected in a world that exceeds 1.5°C of warming, there are business benefits to having a bold net zero target. Decarbonization can yield concrete business advantages.

Like other major business decisions, in setting a target you should consider the potential for differentiation. Organizations that find one or more attributes of their ambition which enable them to stand out from their peers (e.g, least reliance on removals, fastest to achieve target), can gain a competitive advantage on their net zero journey.

Business benefit

Conviction to be bold

Implication for ambition setting

Build resilience & competitiveness

Cost savings in energy and material efficiencies

Reduced risk of stranded assets caused by physical and transitional implications of climate change

Include cost savings and stranded asset risk assessment in assessing ambitions to ensure targets capture these benefits

Drive innovation

Development of new products and solutions to respond to near-term objectives

New technologies and financing options structurally transforming business practices to approach long-term goals

Prioritize ambitions that help your organization become an innovator in areas that align with your business strategy, unlocking potential through decarbonization transition

Improve credibility and reputation

Reputational gains from increased transparency on GHG reporting and emission reduction initiatives

Increased credibility from investors and stakeholders with improved ESG scoring

Pursue ambitions that align with best-in-class frameworks (e.g. SBTI)

Define an ambition centered on high credibility attributes (e.g. front loaded targets, over reliance on offsets)

Prepare for regulatory uncertainty

Positive signal sent to policymakers regarding commitment to climate change

Reduced exposure to policy changes and better positioning to outperform peers as climate regulations evolve

Use leading frameworks (e.g. SBTI) developed by leading voluntary initiatives and ISO which are referenced in emerging net zero policy to ensure your ambitions are proactive not reactive to future regulation

Key parameters to consider when defining ambition

Declaring a target which is beyond your organization’s appetite or ability to pursue can result in a significant loss of stakeholder trust (e.g. customers, regulators, investors). As a result, you should assess parameters that could present challenges in meeting your net zero targets, and consider this assessment in your target setting.

*Note on the implicit unknowns of a net zero trajectory

While it is important to address the parameters listed below to ensure targets are credible, setting net zero targets for before 2050 will require commitments with unknown implications. Decarbonizing to the extent needed to avoid the most harmful impacts of climate change will require significant shifts in how businesses are operated, many of which cannot be fully imagined today. This uncertainty cannot prevent the global business community from going forward with net zero targets.

Nature of your industry

  • Consideration: The absolute abatement target of your organization will be influenced by your industry. Certain industries are much more GHG emission intensive (e.g. aviation), or have much more complicated pathways for abatement (e.g. cement manufacturing), resulting in different ambitions

  • Action: In assessing ambition, look to industry peers already taking action and/or pledge frameworks that have resources specific to your industry. This will help ensure your ambition is appropriate to your industry. The SBTi provides sector specific guidance for a number of industries, and offers different methodologies for targets beyond absolute abatement (e.g. physical and economic emission intensity improvement)

Size of your organization

  • Consideration: The size of your organization may also influence your ambition setting. Large organizations may be more complex to adapt but may have more resources to drive the ambition. Small groups may find adhering to complex framework standards too expensive. It is important to identify an ambition that is suitable for your organization's size and capacity

  • Action: The SBTi has developed a separate standard for SMEs (under 500 employees) that is more catered to smaller organizations’ capacities than its large enterprise frameworks. You should identify climate pledges or frameworks that are catered to your management resources. The SME Climate Hub also has resources and guidance for SMEs as they set out their net zero ambition

Appetite for transition

  • Consideration: Organizations enter ambition setting with different levels of conviction for net zero across stakeholder groups. Depending on the stakeholder groups (e.g. investors, employees, customers, management), your organization may not be in a position to set bold targets

  • Action: Ambition must be set without alienating key stakeholder groups essential for running your organization. Bringing stakeholders along on your ambition setting journey through awareness-raising, co-creation and communication will help to engage them, helping to remove barriers to progress