Target Setting
For years, forward thinking organizations have recognized the benefits of setting public greenhouse gas (GHG) reduction targets. Setting aggressive GHG reduction targets can:
- Galvanize reduction efforts at an organization and often leads to the identification of additional reduction opportunities.
- Help garner senior management attention and increase funding for internal GHG reduction projects.
- Encourage innovation, improve employee morale, and help in the recruiting and retention of qualified employees.
These organizations are responding by setting increasingly aggressive targets. Many are associating aggressive targets as those that are in line with science. For example, as of May 2023, more than 3,200 companies have set targets based on guidance and resources provided by the Science Based Targets initiative (SBTi). According to SBTi, "Science-based targets provide a clearly-defined pathway for companies to reduce greenhouse gas (GHG) emissions, helping prevent the worst impacts of climate change and future-proof business growth." SBTi considers targets as "science-based" if they are in line with limiting global warming to 1.5°C above pre-industrial levels.
Target Setting Best Practices
Declaring GHG reduction targets publicly is best practice. Publicly reported GHG targets provide transparency, accountability, and credibility to the target setting process. It is recommended that reported targets adhere to the following best practices:
- Targets should include a base year and the target year. The base year is the year against which GHG reductions are tracked.
- The year in which the target will be met should be 5 to 10 years from the base year.
- Targets should be aggressive. An aggressive level of reduction is one that is beyond business as usual in an organization’s sector. To determine whether the target is sufficiently aggressive, a good rule of thumb is to align it with the criteria of the SBTi. Those criteria require emissions reductions of 4.2% per year for targets that cover scope 1 and 2 emissions and emissions reductions of 2.5% per year for targets that cover scope 1, 2, and 3 emissions.
- Targets should be for an absolute reduction in GHG emissions. Targets should be a clearly defined, absolute GHG reduction to be achieved over a specified period of time (e.g., 25% reduction over 10 years).
- Targets should cover global operations in their geographic boundaries. Targets should cover emissions generated in all countries, not just in one or several locations.
- Targets should address all three emission scopes. Targets should include all scope 1 and 2 emissions and at least a portion of scope 3 emissions. For scope 3, good practice is to start with targets for just one or two scope 3 categories and progress to additional categories over time.
- Publicly declared targets should include all of the above information. For example, “ACME commits to a 35% absolute reduction of scope 1, 2, and 3 global emissions by 2030 from 2020 levels.”
Target setting activities may vary depending on whether an organization is just beginning to address emissions, or they are more advanced. Table 1 presents common target-setting activities at various phases of organizational engagement. Many organizations start by setting modest targets and incrementally improve their targets as they gain insights and develop organizational capacity for inventorying and reducing emissions.
| Stage | Has your organization set a combined scope 1 and scope 2 emissions reduction target? | Has your organization set a scope 3 reduction target? | Has your organization established a 100% renewable energy (green power) use target? |
|---|---|---|---|
| No activity | Organization does not have a GHG emission reductions target for full scope 1 and 2 emissions. | Organization has not set a scope 3 reduction target. | Organization does not have a renewable energy use target. |
| Entry-level | Organization has an absolute reduction target that covers all scope 1 and 2 emissions. | Organization has developed a scope 3 reduction target and/or supplier engagement target for at least one relevant source of scope 3 GHG emissions. | Organization has established a renewable energy use target of less than 50% renewable energy. |
| Intermediate | Organization has an absolute reduction target that covers all scope 1 and 2 emissions. Reduction target is consistent with the level of decarbonization required to keep global temperature increase to 1.5°C compared to preindustrial temperatures. |
Organization has developed a scope 3 reduction target and/or supplier engagement target for more than two relevant scope 3 categories. | Organization has established at least a 50% renewable energy use target. |
| Advanced | Organization has an absolute reduction target that covers all scope 1 and 2 emissions. Reduction target is consistent with the level of decarbonization required to keep global temperature increase to 1.5°C compared to preindustrial temperatures or exceeds this ambition (e.g., net zero). Target may also be third-party approved. |
Organization has developed a scope 3 reduction target and/or supplier engagement target that collectively covers at least two-thirds of its total scope 3 emissions. Reduction targets are consistent with the level of decarbonization required to keep global temperature increase to 2.0°C compared to preindustrial temperatures. |
Organization has set a 100% renewable energy use target. |
Target Setting Resources
Chapter 10 of the GHG Protocol Corporate Standard (Setting a GHG Target) (pdf) contains more information about setting aggressive GHG targets.
In addition, EPA has developed an Annual GHG Inventory Summary and Target Tracking Form (xls) . This form provides a format to summarize GHG emissions and track emissions over time against a GHG reduction target. This form describes emissions in terms of total CO2-equivalent at an organization level, broken out by emission source type—scope 1 direct (e.g., stationary combustion, process, mobile sources), scope 2 indirect (e.g., electricity, steam purchases), and scope 3 indirect (e.g., employee commuting, business travel, product transport)—for both domestic and international sources. The form also includes historical totals, a performance indicator (if applicable) that is used to track progress toward a reduction target, data on reduction sources such as offset projects (e.g., sequestration), and green power or renewable energy certificate (REC) purchases.
- Please note, this Excel file contains macros that improve the usability of the form. To take full advantage of the enhanced features on this form you must enable the macros when opening the file in Excel.