Applying SBTi Framework for Emission Reduction Business

The IPCC AR6 synthesis report from early 2023 has been confirming that widespread and rapid changes in the climate have occurred, with human-caused climate change already affecting many weather and climate extremes in every region across the globe. Decisive mitigation actions are necessary to limit warming below 1.5°C, and there are currently gaps between projected emissions from implemented policies and those from nationally determined contributions (NDCs); the report urges policymakers to move faster with the adaptation actions.

 

Despite the delays from these gaps in policy making, we see in Indonesia and other countries that an increasingly strong drive comes from the financial sector, which wants to mitigate risks inherent to climate change. Indeed a significant part of our clients is requested by their investors to develop a climate change mitigation strategy, often shortened as “net-zero strategy”. However, without reporting their greenhouse gas emissions, let alone having any emission reduction strategy in place this is a challenge. 

 

The first step of all our clients in the journey towards their net-zero strategy is to set a robust reporting of their emissions that will be the basis to track progress in emission reductions in the future. Once their emission baseline is set, we can evaluate which actions can be implemented to reduce these emissions. Emission reductions are currently a very trendy topic that is increasingly scrutinised by civil society, calling for greenwashing claims. A company needs to set their goals in a structured and externally reviewed way to instil trust in its clients and investors.

 

Recognition via an international initiative can advance our clients’ claims. The science-based targets initiative (SBTi) has defined a framework for emission reduction pathways for both the near-term and long term. The near-term target aims to reduce the company’s emissions in line with warming below 1.5°C, with completion within 5 to 10 years after the targets have been validated. All scopes are covered by the target (for scope 3 emissions, only if they are significant), and offsetting is not permitted. The long-term target aims to reach net zero by no later than 2050. These targets need to be validated by the SBTi team. 

 

Tri Hita Consulting is happy to work & help companies who want to comply & apply SBTi in their operations. Contact info@trihita-consulting.com for more information!

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