Science-based targets are a solid first step to net zero – then comes implementation

All companies need clear goals and action plans to decarbonize their real estate, yet the range of methods, frameworks and targets available to guide their journey can be overwhelming.

There’s one initiative, however, which increasingly stands out from the crowd. Science-based Targets (SBTs) are fast becoming the gold standard across different countries and sectors.

SBTs show corporates how much and how quickly they need to cut their greenhouse gas emissions to align with the Paris Agreement. The process and methodology for target-setting is determined by the Science-based Targets Initiative (SBTi), which provides guidance and ultimately approves the targets.

Just like the GHG Protocol did for carbon accounting, and the Task Force on Climate-Related Financial Disclosures (TCFD) did for risk disclosure, SBTs could soon reach the critical mass needed to become the global target for reducing greenhouse gas emissions.

This could have big implications for bringing greater transparency to gauging and comparing progress at a company, sector and country level, and ultimately supporting companies in achieving their net zero goals.

Using climate science to reach net zero

Getting the right targets and timeframes in place is critical, yet technically complex. Identifying a baseline to measure against can be resource intensive. If the data is not readily available, particularly for Scope 3, it can be tough to acquire.

Some companies need external support to navigate the complex methodologies and various pathways; we have supported many firms in identifying the best routes to take and the methods to use to have the greatest impact for their business. Then, there are the validation costs from the SBTi.

Growing numbers of companies believe it’s worth the effort. The benefits of adopting SBTs go beyond simply providing credibility and the associated boost in reputation and investor confidence. 

SBTs can drive innovation by changing how a company operates. As the targets cover both direct and indirect emissions, they can support improving energy efficiency and revamping operations through Scopes 1 and 2, as well as driving positive change across supply chains through Scope 3.

There are financial benefits too. Companies using SBTs can see cost savings by becoming more energy efficient. Plus, the rise of green finance means more sustainable organizations can get funding at preferential rates. 

Finally, using SBTs can help future-proof a company’s real estate portfolio by readying it for future regulations and building greater resilience against the physical risks posed by climate change.

Yet while there’s no disputing the rigour of linking targets to climate science, they simply show what needs to be done rather than how to do it. That’s when the hard work really starts.

Retrofitting buildings to meet these targets often involves large capital expenditure that must be accounted for and strategically aligned to longer-term plans to avoiding making commitments which companies then fail to meet ten years down the line.

More companies sign up

Demand for SBTs is growing quickly– especially in the face of incoming, and rapidly tightening legislation at a city, national and supranational level. More than 4,000 companies are working with the SBTi and over 2,100 companies have received approval for their science-based targets, up from about 200 in 2019.

JLL is among them. We were the first real estate company to commit to using SBTs to reduce absolute emissions across Scopes 1, 2 and 3 by 51% by 2030 and 95% by 2040.

For now, SBTs are largely geared towards larger companies. Small and mid-sized companies face particular challenges to get their Scope 3 emissions validated due to a very prescriptive definition of a smaller business. This is something that JLL is pushing to change.

The SBTi also continues to evolve. From July 2022, it will only approve targets with a minimum ambition of limiting global warming to 1.5°C of pre-industrial levels on Scope 1 and 2, and to well below 2ºC on Scope 3. Elsewhere, Science-based Targets for Nature are under development, which will massively expand the scope of available targets setting standards, while more engagement with emerging markets and the heaviest polluter industries can help accelerate overall net zero progress.

As more leaders across different sectors sign up, growing expectations that companies must take tangible action on sustainability – and show proof of the results - are driving others to follow suit.

Every company will take its own route to decarbonize its real estate, but what’s key is taking action sooner rather than later - and doing so in a strategic and transparent way. It’s why SBTs are proving so popular and why they can help companies achieve their net zero goals.

JLL’s sustainability experts can help your business to understand more Science-based Targets and how to set the right ones for your business. Contact us for more information:

Bethany Pomiankowski, Sustainability Analyst at JLL