SDG AMBITION B E N C H M A R K R E F E R E N C E C O N S U LTAT I O N D R A F T

In partnership with:

BENCHMARK

SCIENCE BASED EMISSIONS REDUCTION

IN LINE WITH A 1.5°C PATHWAY
SDG IMPACT TIMELINE SCOPE Operations Products & Services Value Chain
3, 9, 12, 14, 15 5–10 Years

Benchmark Information BUSINESS IMPACT

Adopting this benchmark helps business assess their operations against
the latest climate science, validated by the Science Based Targets
initiative (SBTi).1 The SDG Ambition Benchmark on science-based
emissions reduction in line with a 1.5°C pathway provides business critical
strategic knowledge in setting a science-based emissions reduction target
and the technical know-how in understanding the role systems play in
measuring progress and performance. The SBTi has established a range of
criteria to ensure alignment with scientific consensus on what is needed to
halt global warming at 1.5°C. A science-based target is inclusive of Scope
1 and Scope 2 GHG emissions. Scope 3 emissions must be included when
ON CLIMATE CHANGE
The private sector plays a key role in reducing
emissions in line with climate science as 73 per
cent of GHGs are produced by the energy sector
alone, inclusive of manufacturing, transportation,
generation and fugitive emissions.7 According to the
2021 UN Global Compact-Accenture CEO Study on
Sustainability, 55 per cent of companies presently
report their Scope 3 GHG emissions.8
35% of cumulative global emissions come
from just 20 companies9

a company's relevant scope 3 emissions exceed more than 40 per cent

of total Scope 1, 2, and 3 emissions, or if a company is involved in the sale 80m jobs are projected to be lost due to global
warming by 203010

or distribution of natural gas and or other fossil fuels.2 Near-term (5-10)

year timelines are required3 and the long-term target of reaching net-zero
emissions in every sector and industry by 2050 helps businesses manage
20% increase in renewables for top
multinationals would save 1 billion metric
tons of GHG emissions (equivalent to the
2020 emissions of the United States)11
long-term risks and opportunities.4

>50% of global emissions come from only 8

supply chains12

Assessing Against the Benchmark ILLUSTRATIVE INDUSTRY IMPACT

Performance on the benchmark — achieving an emissions reduction in line
with a 1.5°C pathway — performance on the benchmark can be assessed
in line with the Paris Agreement's goal to halve annual greenhouse
gas emissions over the next 8 years.5 However, most companies today
establish their own baseline reduction goals consistent with their strategy
and operations. Today, only 2 per cent of CEOs who believe the have taken
sufficient climate action have validated their targets with the SBTi. In
order to meet the SDG Ambition benchmark, businesses must reduce
emissions in line with a 1.5 degree celcius pathway and validate that their
targets are consistent with SBTi criteria.6
Energy: Decarbonization of the energy sector
is essential to reducing energy-related carbon
emissions.13 One study found that 71 per cent of global
emissions can be linked to 100 energy companies.14
Increased efficiency, adoption of renewables, carbon
pricing, and carbon capture are among the many ways
in which companies can contribute to the low-carbon
energy transition.15
Industrial Goods: GHG emissions related to
industrial processes account for about 5.5 per cent
of global emissions, growing by 174 per cent between
1990–2020, primarily due to increased refrigeration
and production of Hydrofluorocarbons (HFCs).16
Switching to low-carbon alternatives for use in
industrial application could slow this growth trend.

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COMPANIES TAKING ACTION

The Science Based Targets initiative (CDP, UN Global Compact, WRI and WWF) has
been driving ambitious corporate climate action since 2015. As of December 2021, over
2000 companies are taking climate action aligned with the Paris Agreement, of which
over 1000 with science-based targets.17 The Business Ambition for 1.5°C campaign
invites the most visionary leaders to commit their companies to set science-based
targets aligned with a 1.5°C pathway in the lead up to COP 26. The Business Ambition
for 1.5 C campaign calls on companies to set long-term net-zero targets in addition to
their near-term SBTs. Over 800 companies are committed to net-zero to date.18

ØRSTED
set a science-based target to reduce its near-term GHG
emission intensity from energy production by 96 per cent
by 2023, while also committing to reach net-zero GHG
emissions across the value chain by 2040.19 Their approach
focuses on building offshore windfarms and converting
their power plants to biomass. They have reduced their coal
consumption by 82 per cent since 2006 and their power
plants will be coal-free by 2023.20
CVS
set a science-based target to reach net-zero greenhouse
gas emissions across the value chain by 2050. In the near-
term, CVS has committed to reduce Scope 1, 2 and 3 GHG
emissions 47 per cent by 2030. Their environmental policy is
focused on ensuring that emissions from purchased goods
and services, business travel, and downstream transporta-
tion are all systematically reduced.21

Business Value PRELIMINARY ACTIONS

By cutting emissions, switching to renewable energy, and enhancing Understand your GHG inventory:
Undertaking a GHG inventory will help
energy management, companies can lower operational costs, as prices identify the emissions caused by a given
for fossil fuel alternatives continue to decline.22 29 per cent of CEOs who business process. The most commonly used
international tool for quantifying emissions
report to have set science-based targets say it has enhanced bottom-line
is the GHG Protocol.
savings.23 Moreover, by investing in low-carbon products and services,
companies can spur growth within their operations and help identify new Disclose your emissions: Disclosure in an-
nual reporting or to cross-industry disclosure
product categories: 63 per cent of CEOs who report to have set science- organizations like CDP holds companies and
based targets say it is driving innovation in their companies.24 industries accountable to climate science.

Support low-carbon policy: Policies

that advance low-carbon technology and
the cessation of fossil fuel subsides will
be essential in moving the needle towards
KEY RESOURCES zero carbon. Making these efforts part of your
advocacy work underscores commitment
to science-based targets and can support
Science Based Target initiative UNGC Academy SBTi Course
implementation.
Business Ambition for 1.5°C UNGC Academy Scope
Emissions Course Learn SBTi Criteria: the SBTi maintains
IPCC
criteria on emissions reductions in line with
GHG Protocol a 1.5 degree Celsius pathway, and provides
specific industry guidance. Remaining up to
date with this criteria helps ensure effective
emissions reductions.

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INTEGRATION COMPLEXITY* C-SUITE OWNERSHIP

Chief Executive Officer

Understanding Integration Journey towards Integration

Pursuing visibility over greenhouse gas (GHG) emissions
across the value chain is key to informing low-carbon
business models and product innovation. By leveraging
digital technologies, such as the internet of things (IoT)
and artificial intelligence (AI), companies can move
from manual data entry to real-time monitoring and
management of emissions sources. The World Economic
Forum estimates that, when combined with other
technologies such as 5G and AI, IoT could help cut global
emissions by 15 per cent.25
SBTi provides guidance and criteria for setting targets
aligned with a 1.5°C pathway, as well as support for
businesses to implement their target and report against
it. SDG Ambition seeks to complement this guidance with
a focus on designing business systems to advance the
measurement and management of progress against a
1.5°C pathway.
The advancement of digital technologies has encour-
aged a growing market of solutions to support richer
insights on a company’s GHG emissions. Companies can
work together with their technology partners to achieve
outcomes such as:
Automated carbon accounting and
real-time action
Leveraging digital tools to measure energy consumption
across production in real-time and feeding that into
carbon accounting calculations using advanced tools
and algorithms. Software companies are coming
forward with products for carbon footprint analysis
that help customers understand their carbon footprint
and provides a foundation for analyzing and optimizing
greenhouse gas emissions.**

Engagement and influence

over suppliers and customers
Illustrations of Integration
Hardwiring GHG emissions reduction into material
management and product innovation.
MANUFACTURING
Monitoring the energy consumption of equipment
using IoT and sensors pinpoints inefficiencies to reduce Real-time carbon pathway analysis
the energy intensity of the production process. Smart
Creating analytics tools to intelligently and efficiently
manufacturing, for example, is estimated to enable $11.9
measure the business’ carbon pathway to identify
billion in cost savings in 2030.26
changing investment requirements and possible carbon
reduction opportunities.
PRODUCT USE
A deeper understanding of GHG emissions during the
use phase enables product innovation to reduce lifecycle
emissions. Unilever, after identifying 60 per cent of
laundry detergent’s emissions occur in use phase,
launched new products which enable people to wash
their clothes at lower temperatures reducing associated
<30%
of companies report incor-
67%
of companies reporting to
porating climate policy into CDP as having an emissions
GHG emissions by up to 50 per cent per load.27 overall company strategy 28 reduction target disclosed
sufficient data29
* See more in SDG Ambition Integration Guide chapter on Preparing for Integration
** This technology is presented as an example and is not endorsed by SBTi.

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SDG AMBITION APPROACH

Example detail below follows the approach outlined in the SDG Ambition Integration Guide and VIEW THE
supports ideation for benchmark integration. It does not present criteria for setting an SBT. INTEGRATION GUIDE

RAISING AMBITION
SCIENCE BASED EMISSIONS REDUCTION IN LINE WITH A 1.5°C PATHWAY

NEW GOAL IN LINE WITH BENCHMARK’S LEVEL OF AMBITION

PATHWAYS

GHG COMPENSATION
GHG REDUCTION
Abstract carbon from atmosphere through natural GHG
Reduce GHG emissions produced by business activity through
removals and technologies to compensate for business
the value chain In line with a 1.5 Degree celcius pathway
emissions (excluding offsets)

Assign Identify and Implement and Increase share Identify oppor- Mandate investment and Mandate investment and
EXAMPLE ACTIONS

financial value target energy track supplier of low-carbon tunities to drive strategies to scale natural strategies to scale use
to emissions consumption GHG reduction and renewable GHG reductions carbon dioxide removal (e.g. of carbon capture and
from business savings and strategies energy through products afforestation, reforestation, sequestration technology,
activity, to drive efficiency and services and soil carbon sequestration) and track volumes of carbon
reductions e.g. opportunities innovate low- removed, stored and/or
Internal Carbon across the value carbon offerings recycled
Price (ICP) chain
GOALS

Reduction in scope 1 Reduction in scope 2 Reduction in scope 3 Increase in GHG Net carbon
SUB

emissions emissions emissions removal impact

Fundamental: Fundamental: Fundamental: Fundamental: Fundamental:

Energy consumption (by fuel Market-based & location- Estimated upstream & GHG removal by removal Annual carbon emissions
METRICS*

type, emissions type) based emissions downstream emissions technology; Cost per tonne vs. annual removals
of GHG removed
Aspirational: Aspirational: Aspirational: Aspirational:
Energy consumption by BU; Electricity by BU; Product; Subdivided by Scope 3 Aspirational: Historical carbon emissions
Product; Activity Activity, Market instrument activity (e.g. employee travel) Certification of removals & historical net impact
PROCESSES
BUSINESS

MANUFACTURING PROCUREMENT LOGISTICS, WASTE SALES & ENVIRONMENTAL

OPERATIONS & & SUPPLY CHAIN TRANSPORTATION MANAGEMENT DISTRIBUTION MANAGEMENT
SAFETY & DISTRIBUTION MANAGEMENT

STREAMLINING DIRECT MANAGING SUPPLIER LEVERAGE EXISTING DATA FORECASTING & SCENARIO
OPPORTUNITIES

EMISSIONS TRACKING PERFORMANCE AND PROCESSES FOR SCOPE MODELLING FOR REMOVAL
SYSTEM

Business systems can Greater engagement & transpar- 3 EMISSIONS STRATEGY

ultimately be automated in order ency with suppliers through supply Use existing data (e.g. product Leveraging tech such as
to calculate direct emissions in chain management tools and use log) to appraise scope 3 predictive analytics to map
real-time, rather than relying on technologies. emissions and build carbon existing pathway, informing
manual data entry. intensity into data design. removal strategies & timing.

KDD1 KDD2 KDD3 KDD4

KEY DESIGN DECISIONS (KDD)

How might you automate
data collection for emissions
calculations?
Existing meters and data
available in data historians can
be leveraged to automate inputs
into your emissions calculations.
These data inputs will also
inform how you configure your
emissions calculations.
How might you integrate with
suppliers to improve visibility
and emissions performance?
Defining processes for visibility of
supplier emissions data, moving
towards automation. This can be
done with third-party integration
(e..g sustainability rating agencies),
or through direct data sharing
from suppliers.
How might you accurately
measure scope 3 emissions?
For a complete view of scope
3 emissions, it is important to
understand the energy intensity
of the materials used in product
design, consumer use, and of
your own internal operations (e.g.
employee travel).
How might you effectively
forecast emissions to opti-
mize removal investment?
Setting up an ongoing, real time
model for forecasting emissions
helps identify gaps in achieving
the 1.5°C pathway. This insight
can help decision making on
removal strategy based on the
required GHG compensation.

BUSINESS INTEGRATION
* All KPIs and metrics listed are directional, drawing on existing reporting standards.
Each organization should adopt goal-setting measures aligned to their reporting
methodologies and business context.
** Reductions in Scope 1, 2, and 3 emissions must be in line with SBTi Criteria, provided here:
https://sciencebasedtargets.org/resources/files/SBTi-criteria.pdf"
Note: Approach under consultation with Science Based Targets initiative to ensure alignment

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BUSINESS SYSTEMS DESIGN

How might you How might you
automate data KDD1 accurately KDD3
collection for measure scope
emissions 3 emissions?
INTEGRATION COMPLEXITY INTEGRATION COMPLEXITY
PEOPLE PEOPLE
calculations? Calculating non-direct carbon
PROCESS PROCESS
emissions, such as product use and
Technologies such as IoT and sensors
treatment at end of life, remains a
can be used to monitor GHG emissions TECHNOLOGY TECHNOLOGY
complex task for companies. A first
in more efficient and impactful ways,
step involves defining the calculation
from office energy use to smart
method to estimate emissions, such as by leveraging
manufacturing. Ericsson, in an effort to boost production
sales records and survey data on consumer behaviors.
efficiency at their Tallinn manufacturing site, implemented IoT,
5G and augmented reality to monitor the work environment Companies should strive for more intelligent data collection
and equipment. Not only did this enable a detailed sustainability and calculation by increasing data flows between businesses,
impact analysis of the site, but also opened opportunities to products and customers. For example, one technology company
increase efficiency by 25 per cent.30 uses IoT-connected printers to monitor customer consumption
and automatically send ink when they are running low,
Intermediary steps can be taken to streamline emissions
illustrating the opportunities for deeper customer interaction.
tracking, such as designing financial system to track energy
consumption invoices and moving to smart energy meters.

How might you How might you

integrate with KDD2 effectively forecast KDD4
suppliers to improve emissions to optimize
visibility and emissions removal investment?
INTEGRATION COMPLEXITY INTEGRATION COMPLEXITY
PEOPLE PEOPLE
performance? Companies can calculate their GHG
PROCESS PROCESS
Leading supplier management software emissions pathway to 2030 today using
tools support supplier emissions TECHNOLOGY
excel-based modelling tools provided TECHNOLOGY
compliance and are able to integrate by the SBTi (e.g. target-setting tool).
with third-party tools to collect, analyze Understanding the level of reductions
and manage supplier sustainability data. Walmart, working to needed to 2030 to align with a
reduce one gigaton of greenhouse gases from their supply chain by 1.5°C pathway is critical to strategic planning to achieve the
2030, encourages suppliers to participate in THESIS, a third-party benchmark. Scenario analysis, for example, enables companies
program that benchmarks suppliers, tracks performance and to understand the risks associated with various GHG reduction
identifies opportunities for improvement.31 scenarios, and test its investment opportunities against these
scenarios to support capital allocation prioritization.32
Companies of all sizes can embed requirements in the
procurement process, striving for a chain of custody over These tools often rely on manual data entry. Companies
carbon emissions where supplies you buy come with carbon should engage their technology partners on the optimization
data associated that can then be provided to customers. In the and automation of scenario analysis, leveraging advanced
long-term, large organizations can strive to leverage blockchain analytics tools to provide real-time forecasts and
or cloud technologies to automate this process. opportunity identification.

1 Science Based Targets, SBTi 10 Heat Related Job Losses, UNFCCC 19 Case study: Orsted, SBTi 28 UN Global Compact 2020 Progress
2 SBTi Criteria and Recommendations 11 Supply chains hold the key to one 20 Ibid. Report. UN Global Compact, 2020.
SBTi, 2021 gigaton of emissions savings, finds 21 Case study: CVS, SBTi 29 CDP Reports Record Number of
3 Ibid. new report, CDP, 2019 Disclosures, CDP 2021
22 Renewable Power Generation Costs in
4 Science-Based Target Setting Manual, 12 Net-Zero Challenge: The supply chain 2020, International Renewable Power 30 Wireless Factory Sustainability and
SBTi opportunity, 2021 Agency (IRENA) Connectivity, Ericsson

5 UNEP Emissions Gap Report 2021
6 2021 CEO Study. UN Global Compact,
2021.
7 Global Emissions, Center for Climate
and Energy Solutions
8 2021 CEO Study. UN Global Compact,
2021.
9 Carbon majors, Climate Account-
ability Institute, 2019
13 Greenhouse Gas Emissions by
Country Sector, WRI
14 Ways Businesses Can Lead the
Transition to a Low-Carbon Economy,
WRI
15 Energy transition, IRENA
16 Companies Taking Action, SBTi
17 Ibid.
18 Ibid.
23 Six benefits of setting science-based
targets, SBTi
24 Ibid.
25 World Economic Forum
26 ICT solutions for 21st Century
Challenges, Global e-Sustainability
Initiative
27 Climate Transition Action Plan,
Unilever
31 THESIS Index, Walmart Sustainability
Hub
32 The Use of Scenario Analysis in
Disclosure of Climate-Related
Risks and Opportunities, The Task
Force on Climate-Related Financial
Disclosures (TCFD)

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