Whilst basking in the glow of the ratification of the Paris Agreement by China and the US last week, the Edelman Cleantech team attended a thought provoking event on ‘science-based targets’, held by one of our clients, the Carbon Trust.
Science-based targets (SBT) is the new buzzword in sustainability circles, describing the equitable sharing out amongst business of the carbon emissions reductions needed to limit global warming to no more than 2°C, helping to place the economy on a safe, low carbon trajectory. 179 trailblazing organisations have signed-up to the international Science Based Targets Initiative to date. The list reads like a “who’s who” of enlightened businesses, including BT Group and Land Securities, which have been consistently decoupling their growth from emissions over many years.
But what’s new is the narrative that SBTs sparks. Aligning targets with science moves the boardroom discussion from, “what percentage of our carbon footprint should we reduce?” – to “what target must we set, to stay in step with science and the sustainability leaders in my sector?”
The SBT cohort are well aware, aligning sustainability over a longer term, science-based horizon increases resilience to climate-related events and policy, spurs innovation and enhances reputation. Setting a transparent, long term business strategy, delivered through the prism of science, and including regular checks and balances to drive progress sounds rational, especially against the context of frequent corporate scandals. Plus, SBTs could potentially move entire sectors out of the operational space and into a far more strategic role, focused on future innovation and acquisitions. If Artificial Intelligence (AI) governed the business world, it would probably use SBTs…
Yet, whilst the rational SBT approach may sound appealing, without the necessary handholding the reconfiguration of business models that SBTs require could concern investors still battling nerves following the Brexit vote. The swathe of businesses producing and using virtual assets, have a clear head-start in reducing their carbon intensity in line with SBTs. However, a large international organisation wishing to do their part in maintaining a 2°C ceiling to global warming will need to make wholesale changes over the coming decades, for example, moving to EV fleets, 100% renewable energy, and carbon zero heating. And later in the century, the use of carbon negative electricity, using nascent technologies, such as Bio Energy with Carbon Capture & Storage (BECCS) will need to be deployed. Those that want to help achieve the more ambitious goal of 1.5°C will need to achieve a similar transition over a much shorter timescale.
Corporates wishing to win buy-in from internal and external stakeholders on SBTs must demonstrate their progress with data-led narratives, showing how the target is compatible with strong returns. For example, working with Imperial College and the Financial Times we employed a powerful data modelling tool, the Global Calculator, to co-create the COP21 Calculator, a powerful interactive visualisation showing the effectiveness of nation’s pledges at the COP21 climate summit.
And the message must be tailored well beyond financial audiences alone. Since everyone with a smartphone is now a stakeholder to some degree, visual storytelling plays a crucial role in winning trust for purpose-led initiatives, especially for consumer brands. As the Brexit vote showed, the heart now wins over the head in terms of engaging audiences, the emotional over the rational.
With science giving a clear line of how the economic system must evolve to the end of this century – and setting the pace for action, the terms of engagement must be couched within the social and cultural norms of stakeholders and customers. A set of strategic narratives – a story, or system of stories, that explain the low carbon transition strategy in a persuasive way – will be the most effective mechanism to provide relevance, ensure engagement with stakeholders, and motivate action to realise a science-based strategy.