Climate Mitigation Targets and GHG Benchmarks
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What is the primary rationale for selecting 2017 as the common base year (BY) for this study?

  • 2017 was the year with the highest total emissions reported across all companies, providing a robust baseline for comparison.
  • 2017 was the latest year with complete data available for all companies, enabling comprehensive analysis. (correct)
  • 2017 marked the year when the CDP (Carbon Disclosure Project) first gathered emissions data from all participating companies.
  • 2017 represented a significant turning point in greenhouse gas (GHG) emissions trends across the companies studied.

    • According to the provided information, what is the primary reason that 2017 has the highest data availability compared to 2016?

  • Companies were more willing to disclose their emissions data in 2017, leading to a higher reporting rate.
  • 2017 saw a significant increase in the number of companies participating in the CDP, leading to a higher data collection rate.
  • The dataset used for the study included more companies that reported emissions data for 2017 than 2016. (correct)
  • The study's methodology specifically focused on 2017, incentivizing companies to provide data for that year.

    • What is the significance of the statement "The presented harmonization procedure can also be applied to more recent and future datasets and to different target scopes"?

  • The study's methodology is scalable and adaptable to accommodate future changes in the data landscape. (correct)
  • The study's methodology is limited in its applicability and requires further development to handle future datasets and target scopes.
  • The study's results are applicable only to the dataset analyzed and cannot be generalized to other contexts or future years.
  • The study acknowledges limitations regarding its application to future datasets and suggests potential future research directions.

    • Based on the provided information, what is the minimum period required to derive sectorial benchmarks?

    <p>The data must cover a complete year, and the BY and TY should be within the same calendar year.</p> Signup and view all the answers

    What does the term "%RSC" refer to in the equation provided?

    <p>The percentage reduction in emissions targeted from the BY for a given scope of emissions.</p> Signup and view all the answers

    How does the study ensure that the derived benchmarks are robust and reliable?

    <p>By using a rigorous methodological framework that harmonizes data and addresses inconsistencies.</p> Signup and view all the answers

    What is the primary focus of this study, as evidenced by the provided content?

    <p>Developing a methodology for deriving robust and reliable benchmarks for GHG emissions.</p> Signup and view all the answers

    What does the term "εTY" represent in the equation provided for deriving sectorial benchmarks?

    <p>The total annual greenhouse gas emissions for scope 1 and scope 2 in tons of CO2 equivalent (tCO2e) for the target year.</p> Signup and view all the answers

    Which sector has the highest percentage among the given data for the 6th entry?

    <p>Mineral extraction</p> Signup and view all the answers

    In the provided data, which sector shows the least percentage increase from the 1st to the 6th entry?

    <p>Apparel</p> Signup and view all the answers

    Which sector has its highest value listed in the 3rd entry?

    <p>Mineral extraction</p> Signup and view all the answers

    Which sector consistently has values above 50% from the 4th entry to the 6th entry?

    <p>Fossil Fuels</p> Signup and view all the answers

    What is the percentage value of Services in the 5th entry?

    <p>48%</p> Signup and view all the answers

    Identify the sector with the lowest percentage in the 10th entry.

    <p>Fossil Fuels</p> Signup and view all the answers

    In the overall percentages, which sector has the highest value in the 5th entry?

    <p>Materials</p> Signup and view all the answers

    What is the value for Apparel in the 12th entry?

    <p>29%</p> Signup and view all the answers

    What is a common characteristic associated with intensity targets in performance improvement?

    <p>They focus on target determinants without emphasizing results.</p> Signup and view all the answers

    Which financial measures are commonly recommended for assessing corporate performance towards climate mitigation?

    <p>Revenue and enterprise value</p> Signup and view all the answers

    What is a critical limitation found in previous studies regarding corporate climate targets?

    <p>Insufficient harmonization of scopes and timeframes.</p> Signup and view all the answers

    Which intensity metric is recommended for homogenous sectors to mitigate price volatility effects?

    <p>Physical intensity metrics</p> Signup and view all the answers

    What is the primary objective of the study mentioned in terms of GHG benchmarks?

    <p>To develop benchmarks with a wide sectoral representation.</p> Signup and view all the answers

    What gap did previous studies reveal when analyzing corporate climate mitigation targets?

    <p>Only a few companies were studied per sector.</p> Signup and view all the answers

    Which study is noted for focusing specifically on the retail sector in relation to corporate climate targets?

    <p>Sullivan and Gouldson (2016)</p> Signup and view all the answers

    Which of the following best describes economic intensity metrics?

    <p>They are less effective in diversified sectors.</p> Signup and view all the answers

    What percentage of targets share the same base year (BY) and start year?

    <p>36%</p> Signup and view all the answers

    What is the median annualized absolute emission reduction across all sectors from the reported base year to 2017?

    <p>1.76%</p> Signup and view all the answers

    What share of companies did not report a climate mitigation target?

    <p>27%</p> Signup and view all the answers

    How many companies achieved their most long-term target by 2017 among the studied companies?

    <p>22%</p> Signup and view all the answers

    What percentage of the assessed targets were deemed complete and accurate?

    <p>44%</p> Signup and view all the answers

    Which sectors had more than 30% of their companies achieving climate mitigation targets?

    <p>Hospitality, Fossil Fuels, and Infrastructure</p> Signup and view all the answers

    What compliance credits or offsets amount did companies report purchasing?

    <p>10.5 MtCO2e</p> Signup and view all the answers

    How many companies were assessed in the discussed study, marking a substantial increase from previous studies?

    <p>2607 companies</p> Signup and view all the answers

    Which of the following is NOT a type of corporate climate mitigation target?

    <p>Absolute targeted percentage reductions without passing by absolute GHG emissions</p> Signup and view all the answers

    What is the significance of the 'global carbon equivalent budget' in relation to absolute GHG metrics?

    <p>It defines the maximum amount of GHG emissions allowed to achieve a specific climate goal.</p> Signup and view all the answers

    Which of the following is a major concern with using intensity metrics (e.g., GHG intensity per revenue) when measuring companies' GHG emissions?

    <p>They may be influenced by changes in revenue or other factors unrelated to climate initiatives.</p> Signup and view all the answers

    Which of the following best describes the purpose of 'Scope 3' emissions under the Greenhouse Gas Protocol?

    <p>Emissions from the company's upstream and downstream value chain.</p> Signup and view all the answers

    The text proposes a second objective for the study, which is to assess companies' progress towards their GHG reduction targets. What is the main methodology used to determine this progress?

    <p>Analyzing industry-specific benchmarks to assess companies' target ambition.</p> Signup and view all the answers

    What is the primary reason for analyzing companies' progress towards their GHG reduction targets?

    <p>To set more ambitious and realistic targets for future reductions.</p> Signup and view all the answers

    What is the main benefit of using harmonized metrics for assessing corporate climate mitigation targets?

    <p>It allows for accurate comparisons of targets across different companies.</p> Signup and view all the answers

    What is the key distinction between the default case and the sensitivity analysis in the absolute benchmarks scenario?

    <p>The default case uses a conditional interpolation, while the sensitivity analysis uses a linear interpolation.</p> Signup and view all the answers

    What does the sensitivity analysis in the absolute benchmarks scenario aim to do?

    <p>Evaluate the impact of different interpolation methods on the results.</p> Signup and view all the answers

    How are the absolute benchmarks scenario results harmonized?

    <p>By encompassing both scope 1 and 2 emissions, using 2017 as a common base year.</p> Signup and view all the answers

    What is the basis for the financial extrapolation in the default case of the revenue-based intensity benchmarks?

    <p>A linear regression model.</p> Signup and view all the answers

    What does the sensitivity analysis in the revenue-based intensity benchmarks rely on?

    <p>A discontinuous piecewise linear regression model.</p> Signup and view all the answers

    How do the revenue-based intensity benchmarks differ from the absolute benchmarks?

    <p>Revenue-based benchmarks focus on emissions per unit of revenue, while absolute benchmarks consider total emissions.</p> Signup and view all the answers

    Why might there be differences in sector ranking between the benchmarks?

    <p>The consideration of economic parameters in the absolute benchmarks but not in the revenue-based benchmarks.</p> Signup and view all the answers

    Study Notes

    Sectoral GHG Benchmarks

    • Sector-level prospective GHG benchmarks are needed to assess corporate climate mitigation targets.
    • Existing benchmarks lack sectoral coverage or harmonization of target metrics, scope, and timeframes.
    • A harmonization process was developed. This allows for calculation of sector-level GHG benchmarks using absolute or intensity metrics.
    • 1697 companies reporting in 2018 CDP questionnaires, across 13 sectors, were harmonized using 2017 as a common reference year.

    Climate Mitigation Targets

    • Climate change is recognized as a financial risk.
    • Shareholders demand benchmarks for future climate risks based on corporate climate mitigation targets.
    • Existing studies focus on target determinants, target setting, and science-based targets.
    • Corporate climate mitigation targets are usually expressed as percentage reductions in GHG emissions in a specific scope (1,2,3) between a base year and a target year.

    Methodology

    • The process involves harmonizing scopes, metrics, and timeframes of targets.

    • The study used 2017 as a common base year for all targets.

    • Linear interpolation was used to estimate emissions in each year between the base year and the target year if no trajectory information was provided by the company.

    • If a company's emissions were already reduced below the target level by 2017 a constant emission level was assumed until the target year.

    • Intensity benchmarks were calculated for physical and economic metrics.

      • Physical intensity calculated per unit of production (e.g., kWh, tonnes of steel).
      • Economic intensity was calculated per financial measure (e.g., revenue, enterprise value).

    • Absolute emissions and intensity reductions were compared. Harmonization of target scopes and timeframes is crucial to compare targets across companies.

    Results

    • Comparing sectoral absolute reductions in 2030, the lowest and highest medians are -9% (fossil fuels) and -36% (power generation).
    • Target progress was also assessed to identify potential instances of greenwashing or lack of ambition.
    • In 14% of the cases, targets were already achieved by the time the company announced the target.

    Funding

    • The research did not receive any external grant funding from public, commercial, or non-profit agencies.

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    Related Documents

    Prospective Sectoral GHG Benchmarks (PDF)

    Description

    Explore the essential aspects of sectoral greenhouse gas (GHG) benchmarks and corporate climate mitigation targets. This quiz delves into harmonization processes and methodologies used to assess climate risks and corporate performance. Understand how benchmarks can influence corporate strategies in combating climate change.

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