How to set a good reduction target
How to set a good reduction target
How do you set a good emission reduction target or know that the target you're about to set is achievable? This is a common question organization ask after developing their GHG inventory or while implementing their climate strategy. Emission reduction targets are not just aspirational goals; they are commitments that reflect an organization’s dedication to mitigating climate change. Without a clear roadmap, or if targets are too ambitious, organizations risk missing goals, damaging their reputation and losing opportunities for meaningful impact. This article aims to provide clarity on how to set robust and realistic emission reduction targets aligned with the Science Based Targets initiative (SBTi).
A good emission reduction target should always be specific, clearly defining what is being reduced and by how much. This includes identifying the relevant geographies and emissions scopes (Scope 1, 2, and 3), ensuring alignment with global science-based targets (1.5°C goal of the Paris Agreement) and specifying the operational boundaries to which the target applies.
In addition to being specific, targets must be measurable. Targets should be expressed in quantitative terms, typically using metric tons of CO₂ equivalent (tCO₂e). Include a baseline year and target year and specify whether the reduction is absolute (total emissions) or intensity-based (emissions per unit of output or revenue).
While ambition is important, targets must also be achievable. SBTi encourages integrating targets into core business strategies, ensuring resources and capabilities are in place to meet them.
Relevance is equally important; targets must address the correct emissions sources. For near-term targets, Scope 1 and 2 should cover at least 95% of the footprint. If Scope 3 emissions exceed 40% of the organization’s total footprint, then at least 67% of those must be included. For long-term net-zero targets, organizations should reduce emissions by at least 90% across all scopes before neutralizing residual emissions.
Finally, targets must be time-bound. A target without a deadline lacks urgency. Define a timeframe, near-term (5–10 years) or long-term (up to 2050), to drive momentum and integrate climate goals into business planning.
Want to learn more? Contact us to discover how BDO can support your organization.
Principles of good emission reduction targets
Strong principles are essential to ensure targets lead to measurable climate impact. A useful framework is SMART: Specific, Measurable, Achievable, Relevant, and Time-bound.A good emission reduction target should always be specific, clearly defining what is being reduced and by how much. This includes identifying the relevant geographies and emissions scopes (Scope 1, 2, and 3), ensuring alignment with global science-based targets (1.5°C goal of the Paris Agreement) and specifying the operational boundaries to which the target applies.
In addition to being specific, targets must be measurable. Targets should be expressed in quantitative terms, typically using metric tons of CO₂ equivalent (tCO₂e). Include a baseline year and target year and specify whether the reduction is absolute (total emissions) or intensity-based (emissions per unit of output or revenue).
While ambition is important, targets must also be achievable. SBTi encourages integrating targets into core business strategies, ensuring resources and capabilities are in place to meet them.
Relevance is equally important; targets must address the correct emissions sources. For near-term targets, Scope 1 and 2 should cover at least 95% of the footprint. If Scope 3 emissions exceed 40% of the organization’s total footprint, then at least 67% of those must be included. For long-term net-zero targets, organizations should reduce emissions by at least 90% across all scopes before neutralizing residual emissions.
Finally, targets must be time-bound. A target without a deadline lacks urgency. Define a timeframe, near-term (5–10 years) or long-term (up to 2050), to drive momentum and integrate climate goals into business planning.
Importance of a target base year and baseline value
A well-defined baseline is critical for measuring progress. It should reflect the most recent representative year with complete and verifiable data under normal operating conditions, avoiding years with unusual disruptions. Once set, the baseline should remain consistent unless structural changes require recalculation.Pitfalls to avoid
Even with sound principles and a solid baseline, common missteps can undermine credibility and effectiveness:- Lack of senior management buy-in: Without leadership commitment, targets may be deprioritized. Senior management drives the organizational change needed to meet targets.
- Choosing the wrong target type: Absolute targets are straightforward but harder to achieve during growth. Intensity targets offer flexibility but depend on consistent metrics. Choose based on your organization’s structure and growth expectations.
- Failing to track and report progress: Setting a target is just the beginning. Regular monitoring allows for early corrective actions and increases the likelihood of success.
Putting it into practice
Now that you understand the principles, the importance of a baseline, and the pitfalls to avoid, don’t set targets just for the sake of it. Make them robust, realistic, and aligned with global climate goals. Use a clearly defined baseline to track progress and apply the SMART framework.How BDO can assist you in setting a good target
BDO’s Climate and Decarbonization team offers the expertise and support needed to set or refine reduction targets. Whether you're starting out or refining your strategy, we help ensure your targets are credible, achievable and aligned with global standards.Want to learn more? Contact us to discover how BDO can support your organization.
