Setting Science-Based Targets for Growth Companies
November 2, 2022
States, regions and cities are scaling up efforts to decarbonize the economy. National emissions reduction pledges now cover 90% of global emissions and 80% of the world’s population1. Furthermore, more than one-third of the largest publicly traded companies have committed to reaching net zero by 20502. However, despite these public commitments, most companies today do not have a clear plan for the decarbonization of their operations. Setting emissions reduction targets is the first step in bridging the gap between the present and the future.
At BeyondNetZero, we are investing in companies delivering climate solutions. We decided from the outset that our portfolio companies must themselves be on a pathway to net zero emissions — irrespective of the positive climate impact of their products and services. Credibility is threatened when companies claim “avoided emissions”3 without decarbonizing their own footprint at the same time. That is why we require all portfolio companies to set Science-Based Targets using the respected and widely applicable roadmap laid out by the Science-Based Target initiative (SBTi). Companies without existing targets are given a year from investment to signal their commitment and begin the journey, with assistance from BeyondNetZero and our strategic partner, Systemiq.
Over the past year, we have worked with five portfolio companies at different stages in their decarbonization journeys. This has provided insight into how the SBTi’s approach can be applied to high-growth companies, all of which face the same challenge: how to achieve sustained growth while reducing their greenhouse gas emissions.