Carbon Farming

Embracing Scope 3 Opportunities in the Agrifood Sector — Part 2

How to Set Scope 3 SBTi Targets

In the previous article, I discussed the steps a company can take to start their journey of scope 3 GHG emissions accounting, including performing the initial screening of emission categories and engaging suppliers to get more granular data on material scope 3 categories. If you would like to learn more about these steps, you can find it here.

If your company is considering setting scope 3 SBTi targets, you may be asking yourself whether or not you need to set targets for scope 3 emissions. Here are some high-level guidelines so you can better understand if this is right for you:

  • Who should set scope 3 targets?
    SBTi guidance
    , a regulatory document used across industries, states that companies whose relevant scope 3 GHG emissions amount to more than 40% of overall emissions (scope 1,2, and 3 combined) should set scope 3 targets.
  • What are the boundaries and ambitions of scope 3 targets?
    Two-thirds, or 67%, of a company’s scope 3 emissions need to be covered by targets for efficient near-term target setting. For net-zero targets, companies are encouraged to review and address emissions across their full value chain. The ambition of the target needs to align with established pathways that will keep global warming well below the 2°C  pathway for scope 3 emissions, and under 1.5°C for scope 1 and 2 emissions.

SBTi Offers Multiple Approaches for Setting Targets

1. Percentage-based emission reductions by target year from the base year. Here, there are two paths toward effective targets:

  • Absolute emissions reduction 
  • Intensity-based emissions reduction (estimated as % reduction of tCO2e/ton of product)

2. Supplier engagement targets
The focus here is on engaging a company’s suppliers with the goal of driving the suppliers’ adoption of SBTis. In these scenarios, engagement targets must be fulfilled within five years of validation of the company’s own target.

Once a company performs its scope 3 measurement and accounting, it will submit materials for validation of the company's target to SBTi. Following this, the process of reviewing the submitted materials for validation will take a few months.

How Do You Set a Good Target?

Setting a good SBTi target requires knowledge of the potential reductions that are achievable in your supply chain.

Many companies engage and collaborate with their suppliers to understand their specific, achievable level of emissions reduction and how much progress can be made by the target year. While it is important to set ambitious targets that will help accelerate the transition to a net-zero economy, there are also ways to help ground those targets in science-based evidence and data. 

For example, companies can access industry-specific tools, like Regrow’s Sustainability Insights, for the agrifood industry, to evaluate the abatement potential of climate solutions. These tools can also enable companies to evaluate the potential that solutions (such as regenerative agriculture for the agrifood industry) may hold for decarbonization and scope 3 emissions reduction, and therefore inform their company’s scope 3 target setting. 

In the next article, I’ll focus on the next step on the path to embracing your company’s scope 3 emissions reductions opportunities: How to develop strategies that make an impact.

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