Quick guide: Setting an emission reduction target for an agri-food company.
In this quick guide, we explore why agri-food companies need an emission reduction target and how to set one in line with global climate goals.
Short summary:
An emission reduction target is a defined goal for mitigating the company’s climate impact.
Agri-food companies need one for brand and stakeholder management and for legislative compliance.
Large EU companies (+250 employees) are soon obliged to have a target, due to a new EU directive CSRD.
Best practice for setting an emission reduction target is to follow SBTi’s guidelines.
SBTi’s process: 1) Commit 2) Develop 3) Submit 4) Communicate 5) Disclose.
Emission reduction target - What is it?
A greenhouse gas emission reduction target is a defined goal for reducing a company’s climate impact, including all emission scopes (Scope 1-3).
The reduction target includes a reference point; base year and emissions baseline; and a target year with a clearly defined reduction goal. Both the emissions baseline as well as the emission target should cover all emissions that are produced by the company’s operations.
Why do agri-food companies need an emission reduction target?
The food industry is one of the most polluting industries producing 1/4th of all global emissions. Consumers and stakeholders demand agri-food companies take action on climate change and mitigate their climate impact.
A public commitment to an emission reduction target is one of the best ways to communicate the organization's attention to climate change mitigation. It provides credibility, transparency and accountability toward customers and stakeholders. Internally, it provides cohesion and a clear long-term trajectory for the company.
Additionally, new legislation has entered force in Europe.
The Corporate Sustainability Reporting Directive will require all European companies to expand their environmental reporting, including setting an emission reduction target and reporting their current emissions and emission reductions.
First companies will be obliged to report under CSRD already in January 2024.
This implies that all agri-food companies should urgently prepare their processes for setting an emission reduction target and calculating and reporting their baseline: the full scope of their emissions.
What is the best practice for setting an emission reduction target?
There are many options for setting a reduction target, but the global standard is to follow Science Based Targets Initiative’s guidelines.
Their guidelines define and promote best practices and provide a clearly-defined pathway for companies to reduce their emissions in a way that is aligned with climate goals set in the Paris agreement.
All agri-food companies should follow SBTi’s general guidance (depending on their business size) and ensure they comply with the food-industry-specific guidance: Forest, Land and Agriculture Guidance (FLAG).
Corporates (>500 employees) are obliged to set a near-future target and have the option to set a net-zero target.
What does the process for setting a target look like?
The process for setting a Science Based Target is straight-forward:
Commit: submit a letter establishing your intent to set a target.
Develop: work on an emissions reduction target in line with the SBTi’s criteria.
Submit: present your target to the SBTi for official validation.
Communicate: announce your target and inform your stakeholders.
Disclose: report company-wide emissions and track target progress annually.
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Setting a reduction target is part of a 3-step framework for getting started with calculating the impact your company has on the climate.
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