A description of four science-based corporate GHG target-setting methods

Abstract

Purpose

Amidst a growing interest in greenhouse gas (GHG) science-based target setting by businesses, it is becoming increasingly urgent to understand how these are set in theory and in practice.

Design/methodology/approach

Using a model framework for science-based methods, the authors compare four different science-based target-setting methods: sectoral decarbonization approach, linear emission reduction to target year, GHG emissions per unit of value added and corporate finance approach to climate stabilizing targets. Input and output variables, GHG scopes, allocation principles and mathematical formulations are described, followed by a discussion of the differences and similarities between methods.

Findings

The authors show GHG emission mitigation scenarios are as important in the determination of targets as the allocation principle.

Practical implications

For this reason, businesses should apply well-bellow 2ºC scenarios with robust sectoral and regional granularity and the science community should consider the needs of these groups of stakeholders.

Social implications

Policymakers should actively support efforts by corporations to set science-based targets and ensure that the research they commission can be translated into practical action by non-party stakeholders.

Originality/value

This paper contributes to the understanding of the theory and practice of science-based targets.

Citation

Faria, P.C.S. and Labutong, N. (2020), "A description of four science-based corporate GHG target-setting methods", Sustainability Accounting, Management and Policy Journal, Vol. 11 No. 3, pp. 591-612. https://doi.org/10.1108/SAMPJ-03-2017-0031