SBT4utilities and SDG Sector Roadmap · SBT4utilities and SDG Sector Roadmap Global Opportunities for Utilities 3 April 2019 Liaison Delegate Meeting 1. ... Purchase of fossil fuels

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SBT4utilities and SDG Sector RoadmapGlobal Opportunities for Utilities

3 April 2019Liaison Delegate Meeting

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SBT4utilitiesHelping electric utilities to set science-based targets

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1) Introduction

2) Presentation• The SBT4utilities project• Science-based targets and the SBT initiative • Experiences and challenges with Scope 3 targets

3) Facilitated group discussion• 1.5°C SBTi targets• Scope 3: electricity and gas trading

4) Next steps

SBT4utilities: session outline

38%Total:

33.1 Gt CO2

The electric utilities sector

= 13 Gt CO2

- 95%

Energy-related CO2 emissions Carbon intensity reduction

Electricity sector

Source: IEA, GECO 2019

Electricity production

Source: IEA, 2014

Total emissions

Carbon intensity

SBT4utilities (Science-based targets for utilities)

ValueUtilities have a stronger

understanding of science-based

targets and develop methods for

setting Scope 3 emissions targets

ImpactEngagement with peers and

the guidance document will

enable utilities to set ambitious

emission reduction targets

VoiceUtilities exchange

experiences and create a

common voice in external

engagement

Ambition: Helping electric utilities set science-based targets, in particular addressing

Scope 3 emission targets

Enhance understanding about SBT Scope 3 emissions targets Alignment within the sector

Objectives of the guidance

Objectives:

• Provide a better understanding of science-

based targets

• Collect sector experience and challenges

about target setting and Scope 3 emissions

Target audience:

• Electric utilities an any stage of their

SBT journey

• SBT initiative and reviewers

• Consultants to electric utilities

Guidance reviewers:

• First draft: SBT4utilities project members

• Second draft: broader utilities and SBTi

1 Executive summary2 Project introduction

3 Science-based targets (SBTs)4 Approaches to setting SBTs

5 Electric utility sector experience with SBT

6 Addressing Scope 3 emissions7 Sector experience with Scope 3

8 Suggested approaches for setting Scope 3 targets

9 Recommendations

Guidance outline

Background

Findings

Suggestions

Benefits of setting SBT

“Setting an SBT is a strategic decision that future-proofs the company, mitigating risksand setting a clear path to capture low-carbon transition opportunities”

Science Based Targets - Overview

What are science-based targets?

“GHG emissions reduction targets

that are consistent with the level

ambition that, according to climate

science, is required to meet the

long-term temperature goals set in

the Paris Agreement”.

Consistent with the long-term vision of

reaching net-zero emissions in the 2nd

half of the century;

Covering the most relevant sources of

emissions within the corporate boundary

(95% of direct and electricity-related

emissions; 2/3 of value-chain emissions);

Timeframe that drives short-term action

and enables accountability (5 to 15

years).

Science Based Targets - Overview

1.5ºC

Well-below 2ºC

From To

Global goalCompany specific

target

Temperature goalGHG emission

reduction target

Long-term

Timeframe that

enables action and

accountability

Science Based Targets - Overview

550+• More than 550 companies in nearly 40 countries

around the world are developing new business

strategies that are aligned with climate science.

• Directly responsible for nearly 1,000

MT CO2e, roughly equal to Brazil’s

annual emissions.

• US$10+ trillion in market value,

comparable to the value of the

second largest stock exchange in

the world, NASDAQ.

• Nearly a fifth of Fortune Global 500

companies are committing to set science-

based emissions reduction targets.

• 21 electric utilities have committed to

SBTi. Of these, 10 have had their targets

approved.

Science Based Targets – Ambition update

◥ Raising ambition: Minimum level of ambition for

new targets will be raised from 2°C to well-below

2°C.

◥ Disclosing ambition: SBTi will publish levels of

ambition of all approved targets against

temperature goals on the website: 1,5°C, well-

below 2°C and 2°C.

◥ Target revalidation: Companies will be required to

review, and if necessary revalidate, their targets

every five years from the date of target approval

(starting in 2025).

Science Based Targets – Ambition update

Science Based Targets – Ambition update

Science Based Targets – Ambition update

Science Based Targets – Ambition update

2020-2035 linear reduction

Final scenario envelope (n=17,

including hybrid scenarios):

Minimum: 4.1%

Median: 4.4%

Maximum: 5.1%

For comparison:

S1: 4.2%

S2: 3.3%

Implications for utilities

Implications for utilities

Implications for utilities

Implications for utilities

Implications for utilities

Local context

• Energy trilemma(Security, equity, sustainability)

• Public mandate

Structural challenges

• Long-term assets• Ownership vs Shared

Low-carbon

• Recognize improvement but not current low-carbon

Frequent updates

• SBTi criteria updates• Understanding the criteria

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Related to business

Related to SBTi

SBT: recurrent challenges

Preliminary information based on the first draft of the guidance

Equity in fossil

fuel plants

Gas trading

Electricity

trading

Construction

of new plants

Purchase of

fossil fuels

Scope 3 emissions

Scope 1 priority

• Central for economy decarbonization

Screening and reporting

• Full screening• Consistent reporting

SBTi for Gas

• Methodology not available

Meaningful impact

• Limited capacity to change

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Related to measurement and reporting

Related to Scope 3

emissions

Use of reporting

• Qualitative and not mandatory

Suppliers

• Limited suppliers• GHG information

Scope 3: recurrent challenges

Preliminary information based on the first draft of the guidance

1.5°C targets for utilities Scope 3 challenges

Facilitated discussion

Guidance:

first draft

CM19

LisbonCOP24

Sept Oct Dec

End

April

End

May

Outreach

Deadline

member

feedback

MarchEnd

June

UNSG

Engage wider stakeholders

Integrate feedback

Guidance:

second

draft

Integrate feedback & finalize document

Deadline

broader

feedback

Early

Sept

Guidance:

publication

Timeline

Provide feedback

WBCSD actions

Member actions OutreachProvide feedback

Our contact

Luca De Giovanetti Manager, Science-based Targets

E-mail: degiovanetti@wbcsd.org

Main: +41 (0)22 839 31 61

World Business Council for Sustainable Development (WBCSD)

Maison de la Paix l Chemin Eugène-Rigot 2B

CP 2075 l 1211 Geneva 1 l Switzerland

Mariana HeinrichManager, Climate & Energy

E-mail: heinrich@wbcsd.org

Main: +41 (0)22 839 31 40

SDG Sector Roadmaps

Engagement Proposal

Utilities Sector

As global business faces new and complex challenges and opportunities, our science-based approach and targeted business solutions aim to scale up business impact.

WBCSD’s Approach

We target the realization of the Sustainable Development Goals (SDGs) through six work programs to achieve systems transformation.

WBCSD’s Targeted Solutions

James GommeDirector, SDGs

Filippo VeglioManaging Director

Uta JungermannManager, SDGs

WBCSD & the Sustainable Development Goals

WBCSD’s SDG Team

Provides platforms to showcase progress and advance dialogues.

Bring companies together to explore ways to

maximize SDG impact.

Provide timely updates on latest trends, insight and

best practice.

SDGs Program Area

VoiceVoiceValue Impact Voice

SDGs will not be delivered

without business

Technology & Innovation

Engine of Employment

Source of Finance

Sustainable Development Goals

The Critical Role of Business

Implications for Business

Collaboration

Opportunities

Governance & Transparency

Cost of inaction

Importance of appropriate partnerships to realizing transformation

Company Action

Business & the SDGs

Collaboration at different levels

Strategic Partnerships

Sector-level Partnerships

Systemic Partnerships

Background

Recommendations of the BSDC

• In April 2018 WBCSD launched

a framework for SDG road-

mapping which is applicable

across industries and

geographies

• Collaborative effort with ERM,

and piloted by WBCSD chemical

sector members.

Background

SDG Sector Roadmap Guidelines

Players in all sectors will benefit

from developing detailed

“roadmaps” to guide their

sector’s shift to sustainable

development in line with the

Global Goals.

“

”Business & Sustainable Development Commission

SETS A

COMMON

VISION

MAPS

CURRENT

SDG IMPACT

EXPLORES

OPPORTUNITIES

FOR IMPACT

IDENTIFIES

ACTIONS

Enhances license to operate Helps to manage risks Opens up new growth markets

Background

SDG Sector Roadmap Guidelines

SDG Sector Roadmap Guidelines

Three step framework

• Map SDG impacts across the value chain

• Prioritize SDGs for the sector

• Identify key opportunities to impact the SDGs

• Assess sector apportionment

• Identify barriers, potential solutions and impact accelerators

• Identify short-, medium- and long-term actions to advance SDG impactopportunities

• Monitor, measure and report progress

Implementation

Chemical Sector SDG Roadmap

Explores most substantial

opportunities for impact across the

priority SDGs.

Includes SDG prioritization where

the sector can minimize negative

and maximize positive impact.

Chemical Sector SDG Roadmap

SDG Prioritization & Impact Opportunities

23 actions identified across 18 impact opportunities and five systemic themes

Chemical Sector SDG Roadmap

Impact Pathways

• Launched 17 July 2018 at the SDG Business Forum.

• Highlighted by CEO of Solvay during high-level plenary panel in front of 800 business, UN and government representatives.

• Details provided during WBCSD / UNDESA side event for 130 sustainability professionals.

Chemical Sector SDG Roadmap

Roadmap Launch: High-Level Events at UN

• Chemical sector group are now continuing efforts to advance specific actions identified.

• The group continue to convene regularly.

• The group have also set up a roadmap microsite where they can report monitor and report on implementation progress.

Chemical Sector SDG Roadmap

Roadmap Implementation: Ongoing Efforts

Implementation

Forest Sector SDG Roadmap

Implementation

Indian Cement Sector SDG Roadmap

A Utilities Sector SDG Roadmap

Why undertake an SDG Roadmap?

An initiative undertaken by a selection of leading utility companies (and potentially industry associations or additional stakeholders) to illustrate the potential of the sector to leverage its influence and innovation to significantly contribute to the realization of the SDGs agenda. The project will focus in on areas where the sector can have the most impact and explore key opportunities and pathways to accelerate and optimize this impact on the road to 2030, while also presenting a strong business case.

What would the project

be?

Who would it be

targeted at?

The Utilities IndustryConversations will help companies involved identify potential opportunities for collaboration but will also benefit the wider sector and inspire action from the industry as a whole.

Wider Stakeholder GroupsThe report will also provide a window into the potential of the sector to contribute to the SDGs for interested groups of stakeholders and will help to start important conversations around new partnerships

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A Utilities Sector SDG Roadmap

What would be the output?

Demonstrate generally how the

utility industry interacts with the

wider SDG agenda and which

Goals it can impact the most

Identify key impact opportunities where

the companies involved believe they can

have the most significant impact in terms

of contributing to realizing the SDGs while

unlocking business opportunities

Explore actions that players within the

sector can begin to take to move towards

advancing these impact opportunities and

make sure potential is fulfilled

Key Output: An accessible roadmap document (of around 30-40 pages) to be released and promoted in 2020.

Report will seek to:

A B C

A Utilities Sector SDG Roadmap

What would it involve?

A series of interviews with each participating company to collect inputs and view points on key SDGs for the sector as

well as most significant impact opportunities

A two-day face-to-face workshop to confirm

priority SDGs for the sector and narrow down a list of impact opportunities for

the sector

An additional workshop, complemented by a series

of calls if necessary to confirm key action points

associated with each impact opportunity.

Phase one

Phase two

Phase three

Ongoing research, drafting and project management (WBCSD and consulting partner)

Project kick-off

Project Sign-off

James GommeDirector, SDGs

gomme@wbcsd.org

Uta JungermannManager, SDGs

jungermann@wbcsd.org