Environmental baselines and targets are critical for effectively managing climate impact, tracking progress toward mitigating carbon emissions, and ensuring continuous improvement towards a more sustainable future.
Table of Contents
- Baselines
- Targets
- Setting Targets in FEM and FDM
- Normalized vs. Absolute Targets
- Why is it important to set reduction targets?
- FAQs
Baselines
A baseline is the reference point against which progress in reducing emissions or achieving other environmental goals is measured. It serves as a starting point from which reductions or improvements are calculated.
Requirements:
- Using stable data: Before setting a baseline, data validation is a critical first step. If your factory has undergone major structural changes such as acquisition or changes in product type, select a baseline after those changes have been completed.
- Normalization: A specific type of reduction target that focuses on reducing energy consumption relative to a certain level of economic activity or output.
- Verified data: Baseline data should be accurate and verifiable. Verified energy data from Higg FEM or from internal audit processes are acceptable sources of baseline data.
- Baseline year: A baseline year indicates the starting year to begin measuring a target. The baseline year and the baseline performance level (e.g. annual energy use, emissions per unit, etc.), should remain unchanged if you plan to set targets for improving your performance.
Example: A facility that produces cotton t-shirts could have a baseline of 10 kWh per pcs starting in 2020. This would mean it’s baseline, or reference point which progress is measured against, is 10 kWh per t-shirt. The baseline year, or starting year to begin measuring a target, is 2020.
Targets
Targets are your facility's specific climate goals or objectives. Targets provide a clear and measurable direction for action, helping to focus efforts and track progress over time.
Furthermore, a target year determines when a business needs to achieve their target.
Target Setting Best Practices:
Even though FDM tracks progress on a monthly basis, baselines and targets are set on an annual basis. When facilities set targets within Facility Data Manager, targets should:
- Include a base year and target year.
- Be aggressive and reach a level of reduction that is beyond business as usual in an organization’s sector. A good rule of thumb to determine whether it is sufficient is to align it with the criteria of the Science-Based Targets Initiative, Greenhouse Gas Protocol, or the Paris Agreement.
- Be clearly defined and achieve an absolute reduction in GHG emissions over a specified period of time. For example, a 25% reduction over 10 years.
- Address scope 1 and 2 emissions of the facility.
Example: If a company commits to reaching net-zero GHG emissions across its value chain by 2040, it's Near-Term Target Year could be 2030, while it's Long-Term Target Year could be 2040.
Setting Targets in FEM and FDM
Both FEM and FDM address target setting in slightly different methods. Since FEM is filled out once a year, facilities have the opportunity to reflect and submit information about their target setting practices on an annual basis. Meanwhile, FDM is filled out on a monthly basis, allowing facilities to continuously monitor their target setting practices on a more frequent basis.
FEM |
FDM |
| Yearly opportunity for facilities to track its performance against targets. | Tracking progress over each month, however, it is limited in scope. Currently FDM target setting is available for energy, scope 1, and scope 2 emissions. |
Target Setting in FEM
Within FEM, target setting happens primarily in Level 2 questions. You can see examples of these questions by going to the How to Higg Guide Table of Contents and clicking on the blue Level 2 hyperlinks.
Generally speaking, you can set targets and baselines in Level 2 questions or wherever quantitative data is tracked (such as in the energy, water, and wastewater sections).
For example, Question 9 of the Energy section (Ref ID - enbaselinesource) asks about energy baselines.
Target Setting in FDM
Facilities can set and track Scope 1 and 2 emissions reduction targets in FDM alongside their Energy Target.
Go to the Facility Data Manager Dashboard by selecting Submission under Facility Data Manager.
Scroll down to the Targets section and click the Set Target button on the right.
Enter your target details. Click the drop-down arrows to learn about each field's definition.
Baseline
-
Baseline Quantity - Enter in your baseline quantity, which is the annual quantity you want to change from.
- For example, if a facility produces cotton t-shirts, an example of a Baseline Quantity could be 10 kWh per pcs. This would mean it's Baseline, or reference point which progress is measured against, is 10 kWh per t-shirt.
-
Baseline Unit of Measure - Enter in your unit of measure that correlates with the Baseline Quantity.
-
Note: If All Emissions (Scope 1 and 2) is selected, the only unit of measure available is kg CO2e per pcs/pairs
-
Note: If All Emissions (Scope 1 and 2) is selected, the only unit of measure available is kg CO2e per pcs/pairs
-
Baseline Year - Enter in the starting year to begin measuring a target.
- For example, if a facility produces cotton t-shirts, an example of a Baseline Year could be 2020 because that is the earliest year the facility has complete data.
Target
-
Target Year - Select the year when your business needs to achieve its target.
- For example, let's say your company commits to reaching net-zero GHG emissions across your value chain by 2040. A near-term target year would be 2030, while a long-term target year would be 2040.
-
Percentage Change - Enter in the value of change you wish to achieve.
-
Note: The unit of measurement underneath Percentage Change will correlate with the Baseline Unit of Measure.
-
Note: The unit of measurement underneath Percentage Change will correlate with the Baseline Unit of Measure.
-
Change Direction - Refers to a reduction or increase in what you want to achieve.
- Decrease example: 10% decrease on a pair of socks that uses 1 kWh to produce, resulting in using 0.90 kWh per pair.
- Increase example: 20% increase in total renewable usage
- Plan to achieve the target - Enter in any details of how you plan to achieve the target.
Lastly, click the Save Target button at the bottom of the page.
The newly created target will appear at the bottom of the FDM Dashboard.
For more information on setting targets in FDM, check out the FDM Targets and Baselines: For Facilities e-learning course.
Normalized vs. Absolute Targets
In Facility Data Manager, facilities can set energy targets. Part of that process includes choosing between normalized and absolute measurement for the target.
A normalized target, also known as emissions intensity target, is a specific type of reduction target that focuses on reducing energy consumption relative to a certain level of economic activity or output. It is recommended to use a normalized target to account for operational fluctuations.
- For example if your facility uses 100 MJ of energy to produce 100 T-shirts, the normalized value/energy intensity would be 1 MJ/piece. If you set a target to reduce this value by 10% your target would be 0.9MJ/piece.
An absolute target focuses on achieving a direct decrease in the total amount of energy usage.
- For example of an absolute target is reducing total energy use for all facility activity by 10% from a 100,00 MJ baseline.
More about Normalization
Your use of energy, water, or other manufacturing inputs can fluctuate due to various factors such as an increase or decline in business. To account for fluctuations we recommend dividing consumption data by a common parameter, such as production units. This provides better year-over-year comparison of data and therefore more useful, and actionable analytics.
Normalization removes some variation in the data set. Consumption of energy for example is typically tracked in kWhs (Kilowatt-hours). For data normalization, a standard parameter, such as square meters of facility space or units of production, is used to divide the absolute energy consumption (in kWh) and allows for meaningful comparisons over time or between entities.
How to calculate normalized data
Calculate using data captured from an absolute scale and divide it by a standard parameter such as units of production, number of employees, or revenue.
Within FDM, if you select a normalized baseline, target, or reduction, it will be normalized against the production units entered into the Site Information section for annual production.
For example, if you selected annual production in “meters”, your normalized baseline will be normalized against meters.
Additional Resources:
United State Environmental Protection Agency
Why is it important to set reduction targets?
Why is it important to set reduction targets? Effective greenhouse gas management involves setting a greenhouse gas target. Target setting is often the next step in a company’s sustainability journey after developing a GHG inventory and ensures that an issue is prioritized and factored into a company’s decision making process.
According to the Greenhouse Gas Protocol, target setting is important for companies due to:
- Minimizing and managing GHG Risks by raising internal awareness about risks and opportunities presented by climate change.
- Achieving cost savings and stimulating innovation by driving improvements in innovation and resource efficiency. If the targets apply to products of a reporting company, it drives research and development, which creates products/services that improve the company’s market share and reduce emissions associated with the use of products.
- Demonstrating leadership and corporate responsibility by improving a company’s overall reputation with customers, employees, investors, business partners, and the public.
- Participating in voluntary programs by resulting in public recognition, facilitating recognition of early action by future regulations, and enhances a company’s GHG accounting and reporting capacity/understanding.