Global pressure to reduce greenhouse gas (GHG) emissions is creating challenges and opportunities across regions and sectors, with governments and companies alike making public emission reduction targets.

Some of them are pursuing a net zero strategy to ensure that emissions from their value-chain activities create no net climate impact. Growth in the number of national net zero targets has slowed (149 countries have such targets, up from 124 in late 2020), but company net zero target-setting momentum is increasing rapidly. The share of large, publicly listed companies with net zero targets more than doubled over the last two years, from 417 to 929, according a June 2023 report compiled by four independent research organizations. Other companies are setting targets that stop short of net zero but still aim for significant reductions on their journey toward decarbonization.

The process of setting GHG targets can help focus your organization’s attention on climate change, sustainability, and ESG performance. Having clear, quantifiable goals can also help you align your climate strategy with operational steps to reduce your carbon footprint.

A few key steps can help smooth the process of target-setting for your organization.

• • Take a practical, bottom-up approach to target-setting: We typically see organizations taking one of two general approaches to target-setting:
    • Top down: Executives or the board of directors set ambitious, aspirational targets, for example a 50% reduction by 2030 or net zero by 2050. These targets are often chosen based on what competitors or customers are striving for, and employees are charged with figuring out how to achieve them.
    • Bottom up: A group of internal stakeholders, from operations to maintenance and more, work together to determine what’s achievable. This involves a methodical process of evaluating the technical and economic feasibility of individual measures to estimate the potential GHG emission reductions that could be realized by implementing them across the company.

    While each of these are common ways of setting GHG targets, we recommend the bottom-up approach to achieve real, measurable reductions and avoid accusations of greenwashing. By systematically thinking through each option and its potential impact and identifying ways to bridge the gap between current operations and plans for the future, you can gain buy-in and commit to something you can deliver on.

• • Ensure that targets are science-based: The Science Based Targets initiative (SBTi), which is the predominant standard most companies align with, considers targets to be science-based if they are in line with limiting global warming to 1.5°C above pre-industrial levels. SBTi is not the only pathway for pursuing science-based targets, though, and for many companies, it may not be the best one. While the SBTi provides guidance for developing science-based targets, not all sectors are currently covered by SBTi, such as oil and gas and other fossil fuels.

There are other ways of setting targets that align with science and the Paris Agreement. Depending on the size of your organization and the expertise you have in-house, you may need external support to come up with your own science-based targets, including ensuring that your targets are credible, developing your own internal cost of carbon framework to evaluate capital projects, and aligning targets with performance metrics and compensation for executives.

• Set short-term as well as long-term goals: The danger of focusing on a goal a couple of decades into the future is that you run the risk of overlooking the immediate action necessary to reach your ambitious long-term targets. Breaking a long-term goal into smaller action items helps you plan (and assess the ROI of) reduction measures over time. By considering practical solutions that can be implemented in the near term, you can lower your GHG emissions sooner.

Setting the right GHG reduction targets is a critical component of creating a multifaceted decarbonization strategy to lower your organization’s carbon footprint and climate risk. It’s a complex process, however, one that requires deep industry expertise and insights into the wide range of decision-drivers involved. By bringing environmental consultants into the process, you can leverage highly experienced industry experts who can help you take a technical approach to establishing GHG reduction targets and translate a net zero vision into tangible actions your organization can implement today.

For more in-depth discussion on decarbonization strategies, join our complimentary on-demand webinar, From Ambition to Action: Overcoming Decarbonization Hurdles in Construction Materials, as our panel of experts provides a deep dive perspective on Trinity’s latest commissioned research on sustainable decarbonization outcomes and challenges when implementing decarbonization strategies.