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Net zero under the Science Based Target Initiative (SBTi): Reforming the scope-3 setting and implementation as an urgent imperative
By Ir Dr Alex GBAGUIDI

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SBTi’s scope-3 includes indirect emissions (excluding emissions from purchased or acquired electricity, steam, heat and cooling that are included in scope-2) across a company’s value chain. According to SBTi, scope-3 emission reduction serves as a powerful mechanism to integrate the global net-zero target into the core of the economy—corporate procurement and revenue generation specifically. Scope-3 target-setting catalyses a seismic shift towards net zero by extending the responsibility for climate impacts beyond direct operations, and fostering comprehensive decarbonisation throughout the entire value chain.

 

However, persistent challenges have been observed in implementing scope-3 target, including aggregated emissions metric (due to variability in carbon accounting methods), target-setting methods (given the dynamic nature of value chain emissions and variability of activities), target-setting boundaries (the requirement of minimum percentage of scope-3 emissions—67% near-term, 90% long-term—leads to misleading target formulation, exclusion of critical emissions, and ambiguity about the transition from near- to long-term target boundaries), levels of influence (given the corporate variable capacity in influencing and mitigating different emissions sources), and the progress measurement (data limitations, emissions volatility and challenge of linking mitigation actions directly to greenhouse gas inventory changes).

 

Given the above challenges, the increasing urgency for climate action, and the scale and importance of scope-3 target in leveraging effective transformative changes, reforming the scope-3 target-setting framework appears as an urgent imperative. Several methods should be explored to enhance the effectiveness and credibility of the scope-3 target.

 

These methods include a comprehensive set of tools to manage emissions (outcome-based metrics that measure the alignment of an organisation’s upstream (procurement) and downstream (revenue generation) activities with global climate goals), a more nuanced approach to target-setting boundaries (prioritising actions on the most climate-relevant activities), and an enhancement of corporate influence over an emission source in determining appropriate interventions.

 

Moreover, some key actions should be explored: They include determining benchmarks for outcome-based metrics aligned with global climate goals, introducing and standardising the concept of influence in target-setting, and using different tools (such as certification and taxonomies) to define science-based benchmarks. They should be implemented to effectively drive the SBTi towards the net-zero goal.

 

 

This article is contributed by Ir Dr Alex Gbaguidi with the coordination of the Environmental Division.

 

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