Sectoral Intensity Target Approach to Corporate Greenhouse-gas Emissions Targets: Aligning corporate climate action with the 2 °C target

Abstract

More and more companies voluntarily reduce their climate impact. To promote sustainability within their organization, companies set greenhouse-gas (GHG) emission targets. These targets are often set rather arbitrarily, without looking at what is needed to avoid catastrophic climate change. In my master thesis I propose a methodology that aligns corporate GHG emissions with the international 2 °C target. It does so by first allocating the allowed emissions to sectors through least-cost optimization in an integrated assessment model. Second, the allowed emissions for each sector are allocated to individual companies based on its share of activities. For homogeneous sectors, physical indicators (such as tonne steel produced) are used. For heterogeneous sectors, value added is used. The sectoral intensity target approach (SITA) significantly improves existing methods, and is a pragmatic tool for corporate target-setting. Furthermore, the method is based on public data. This enables NGOs to use the SITA as a tool to benchmark corporate GHG emission targets and promote voluntary climate action.