You can’t reduce your carbon footprint without setting actionable, measurable and impactful targets. And you can’t set actionable, measurable and impactful targets without accurate emissions data. Simple.

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Companies, rightly so, are under pressure from governments and regulators to reduce their emissions to make sure we stay under the target set in the Paris Agreement of 1.5 Celcius. Currently, the global temperature has risen by 1.1 Celcius pre-industrial times, which is a cause for alarm. 

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In this article, we’ll discuss the importance of target-setting and how to go about it to ensure you’re setting achievable targets that make a real impact and help you reduce your carbon footprint.

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Understanding the importance of target-setting

The global consensus is that the temperature rise must be limited to 1.5 Celcius by 2050. Almost all nations have agreed to this goal in the Paris Agreement. It’s also agreed upon that the world needs to achieve net-zero status by 2050 to prevent temperature rise beyond that red line. This undertaking by nations is critical because these objectives essentially guide target-setting. 

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As a result of the Paris Agreement, governments worldwide are adopting frameworks and regulations to target industries, especially those notorious for greenhouse gas (GHG) emissions. To comply with those regulations, companies must set targets and achieve them by the stipulated deadline. Whether mandated or voluntary, efforts to reduce carbon footprint must be based on targets. It’s simple – you can’t take the right actions without a clear target. 

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Setting climate targets offers a way to measure progress and adjust if needed. Those targets set the benchmarks for climate policies and actions. For companies and their stakeholders, climate targets also clarify where they stand and where they aim to reach regarding their environmental impact. This is particularly important for investors. 44% of investors believe climate change should be among the top five priorities of a company, according to a PWC survey. 

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Target-setting and carbon accounting: Two halves make a whole

It’s essential to know your current carbon footprint when setting climate targets for the future. Those numbers serve as the baseline and help measure the progress made. Here’s the showstopper: You need accurate emissions data to set impactful targets. 

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Unfortunately, carbon accounting and the calculation of emission data has its fair share of challenges. While most companies have accurate data on direct emissions (Scope 1 and 2), they fail to achieve the same level of accuracy with indirect emissions (Scope 3). And that’s a big problem. 

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As with many companies, Scope 3 or value chain emissions form the largest share of overall emissions. So, companies need to target value chain emissions to reduce the majority of their carbon footprint. That, in turn, requires accurate data, which is understandably hard to acquire given the complexity of the modern supply chain. 

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The good news is that Scope 3 accounting is improving through more stringent legislation and better technology. For instance, the Corporate Sustainability Reporting Directive (CSRD) requires large companies operating in the European Union to report Scope 3 emissions. Such regulations are expected to encourage more accurate reporting for downstream and upstream emissions. 

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Setting science-based targets

For climate targets to have the most impact, they have to be science-based. They have to align with the scientific research and knowledge that considers the ultimate target, limiting global temperature rise to 1.5 degrees Celsius. 

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The Science-based Targets Initiative (SBTi), a collaboration between several organisations, has created detailed guidelines for target-setting. These industry-specific guidelines cater to key industries responsible for considerable GHG emissions worldwide. These sectors include: 

• Aluminium 
• Apparel and footwear
• Aviation
• Buildings 
• Cement
• Chemicals
• Financial institutions
• Forest, land, and agriculture
• Information and communication technology 
• Land transport
• Maritime
• Oil and gas
• Power 
• Steel

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The sector-specific science-based target guidelines are designed using data from those sectors, which makes them credible and reliable. 

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More importantly, the SBTi regularly updates these guidelines to adopt new technologies and incorporate direct feedback from stakeholders from those sectors. As a result, the SBTi guidelines are currently the most credible resource for target-setting, regardless of the industry, niche, or business size. 

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Additionally, the SBTi Corporate Net-Zero Standard is a unique framework for target-setting for large corporations that offers a clear pathway to the 2050 objective. It can be used to set both near-term and long-term targets. Companies can also work directly with SBTi to set their science-based targets. 

Near-term vs. long-term targets

While the 2050 net-zero targets are important, reducing one's carbon footprint requires setting interim goals as well. According to the SBTi, near-term targets are those that are to be achieved within a decade of the baseline year. So, if your baseline year is, say 2020, any targets for 2030 or earlier are near-term targets.  Many companies, cities, and countries have ambitious short-term targets that set the precedent for long-term targets. For instance, Denmark aims to reduce GHG emissions by 70% by 2030. Such short-term goals are important as they can help create more accountability and clear the vision for the future. 

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Both near-term and long-term targets should be science-based and align with business objectives. SBTi’s corporate and sector-specific guidelines provide valuable information for both types of target-setting. 

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The one big benefit of short-term targets is that once you achieve them, you have a better understanding of ways to reduce carbon footprint that work. Based on that, you can adjust your long-term targets. Similarly, if you fail to achieve your targets in the near term, you can scrutinise existing policies and take more drastic measures. You can also analyse why the policies or their efforts fell short, so adjustments can be made before it’s too late. 

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Reducing vs. offsetting: Making the most impact

Minimising your carbon footprint requires emissions reductions, which is what your climate targets should focus on. Per the SBTi guidelines, targets should primarily focus on mitigating emissions before considering offsets. Ideally, carbon offsets should be the last resort and only used to offset unavoidable emissions. They are not the most helpful strategy for reducing your carbon footprint. 

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And sadly, they’ve enabled greenwashing, with companies continuing to release emissions and buying carbon offsets that fail to reduce them. As one study showed, 90% of carbon offsets offered by a leading verifier were useless in creating any real impact. 

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Certain companies may need offsets to reach net-zero targets by 2050. SBTi terms this ‘beyond value chain mitigation.’ Neutralising carbon emissions may be necessary, as they may not be able to fully eliminate their emissions. For others, such efforts are encouraged to ensure a better chance of global net-zero status. 

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5 tips to reduce your carbon footprint

Setting targets is one thing; achieving them is another. Your climate policies and programs should be based on your industry, business, and actual carbon accounting data. Regardless of the actual targets, the following best practices can help reduce your GHG emissions.

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Strive for energy efficiency

Adopt systems and practices that increase energy efficiency throughout your operations. For example, you could switch to motion-sensor lighting, set the thermostat to 26 degrees Celsius, and cycle or take public transport to the office instead of driving. 

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Embrace renewable energy 

Invest as much as possible in clean energy to reduce direct emissions. As energy consumption accounts for a significant chunk of direct emissions, switching to renewable resources will bring you closer to net zero. 

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Limit resource usage 

It’s incredibly important to minimise resource usage, especially those that directly lead to climate warming. One way to do this is to go paperless or reduce plastic use on your business premises. 

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Comply with climate regulations and standards 

The environmental, social, and governance (ESG) regulations are designed to increase accountability and encourage initiatives for emissions reduction. Complying with them can pave a path to net zero and showcase your commitment to the cause of climate change. 

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Improve value chain emissions reporting 

You can’t reduce your carbon footprint without targeting Scope 3 emissions. And to do that, value chain emissions must be reported accurately. Work with your suppliers, distributors, and partners to attain credible, accurate data on their emissions. 

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FAQs

What is a good carbon footprint?

A good carbon footprint represents a low level of greenhouse gas emissions relative to a specific benchmark, such as the global average or a target set by scientific consensus to mitigate climate change. Minimising emissions from energy use, transportation, waste generation, and other activities can help achieve a low carbon footprint.

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Which industries have the highest carbon footprint?

The industries with the highest carbon footprints typically include oil and gas, energy production, transportation, manufacturing (especially heavy industries like steel and cement production), agriculture (particularly livestock farming), and construction. These sectors often rely heavily on fossil fuels for energy, transportation, and production processes, emitting significant amounts of greenhouse gases.

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