What Should Companies Do If They Miss Their Scope 3 Targets?

This is a feature, not a bug. Any climate action ambitious enough to make a difference will have the potential to fall short. So, what should companies do when setting targets, or realising they won’t meet them?

The Challenge of Setting and Meeting Targets

Attempts to address this issue by limiting the ambition of scope 3 targets to what is deemed ‘practicable’, such as the Science Based Targets initiative (SBTi)’s 67% coverage or the Voluntary Carbon Markets Integrity Initiative’s (VCMI) Scope 3 ‘flexibility claim’, fall short. These efforts prioritise short term claims over the long term systemic change that is needed. Instead, we need appropriate tools and guidance to enact scope 3 changes without reducing ambition or shoehorning in mitigation actions that are irrelevant to the value chain.

The Reality of Unabated Emissions

Unabated emissions represent the ongoing harm a company contributes to the climate crisis. Taking responsibility for all these emissions is crucial for a robust, credible climate strategy. Even companies with a Science Based Target (SBT), must also take responsibility for their unabated emissions. Without this, they are still contributing to global heating until net zero is achieved. This is an uncomfortable truth, but a truth nonetheless.

So why isn’t this responsibility a requirement in frameworks like SBTi? To achieve organisational net zero requires abating value chain emissions by 90% for most companies, by latest 2050, then neutralising the rest.

Or in layperson’s terms, why are you allowed to keep on harming? We wouldn’t allow companies to dump rubbish in the streets if they have a policy to dump less rubbish in the future.

This logic holds whether a company is succeeding against its targets, failing, or has yet to set any. The right answer is to follow these steps:

1. Do everything you can to get back on track with your science-based reduction trajectory as soon as possible.
2. Take responsibility for 100% of unabated emissions by following Beyond Value Chain Mitigation (BVCM) guidance and good practices: set a carbon fee to fairly price emissions and use the proceeds to fund climate action.
3. Communicate effectively, honestly and accurately that you are off track, what you are doing to get back on track, and how you are taking responsibility for your unabated emissions in the meantime.

Towards Radical Honesty

We need a paradigm shift towards radical honesty. Companies should say, "We are causing damage, here’s how we will act on it," instead of "We’ve resolved our climate issues and are carbon neutral."

This requires companies to move away from presenting a overly optimistic or simplistic picture of their environmental impact and embrace transparency about their current challenges and shortcomings.

By acknowledging the ongoing harm their operations may cause, companies can build trust with stakeholders, including consumers, investors, the media, and regulators. This honesty allows for a genuine dialogue about the limitations they face and fosters a collaborative environment where realistic and effective solutions can be developed within sectors or economy wide. It also provides helpful insights to regulators and investors indicating a greater need for support from other institutions to provide further carrots, sticks, or other tools to drive meaningful decarbonisation.

Adopting this mindset enhances corporate accountability and encourages a culture where continuous improvement is valued over short-term milestones, paving the way for substantial and lasting environmental benefits.

What’s Needed Next

To move forward effectively, companies should follow the three steps listed above and abide by these principles:

• Promote Radical Honesty: Acknowledge that setting up and pursuing net zero goals will inevitably involve some failures. Be honest about these challenges and setbacks.

See ,Funding Beyond Value Chain Mitigation

• Take Responsibility for Unabated Emissions: Always take responsibility for these emissions in line with BVCM good practices. Set a fee, use it to fund meaningful action, and make transparent claims.
• Avoid Conflating Value Chain Targets with Beyond Value Chain Mitigation: Mixing these two can lead to accusations of greenwashing. Ensure that your actions match your claims.
• Make Clear and Measured Claims: Be authentic in your communication. Avoid spending more on marketing your efforts than on actual climate actions.
• Avoid Headline or Binary Claims: Steer clear of making broad or absolute claims about your climate efforts. Instead, focus on specific, measurable actions and progress.

By following these steps, companies can navigate the complexities of Scope 3 emissions and contribute more effectively to the global effort to achieve net zero. Embrace the challenges, take responsibility for unabated emissions, and communicate with a spirit of truthfulness, even at the expense of simplicity, to build credibility and work towards lasting impact.