GHG emissions reduction targets and progress

Disclosure focus

Disclosure 102-4 requires an organization to report short-, medium- and long-term gross Scope 1, Scope 2 and Scope 3 greenhouse gas emissions reduction targets and its progress toward each target. Each target must be reported in metric tons of CO₂ equivalent and as a percentage of base-year emissions. Scope 1 and Scope 2 targets can be reported separately or as a combined target, while Scope 3 targets should identify the categories covered.

Gross Scope 1 and Scope 2 targets must cover the total Scope 1 and Scope 2 emissions reported under Disclosures 102-5 and 102-6. Where a reported target does not yet cover the total, the organization should explain why, report the percentage covered and describe the timeline and steps for achieving full coverage.

GHG removals, GHG trades — including carbon credits — and avoided GHG emissions must be excluded from both the gross targets and the calculation of progress. The term “certificates” should not be used as a general substitute for GHG trades because contractual instruments can form part of market-based Scope 2 accounting.

For each target, the organization must state whether biogenic CO₂ emissions are included, identify the greenhouse gases covered and, for Scope 2 targets, state whether the location-based or market-based method is used. Where a market-based Scope 2 target is reported, the organization should separately report a location-based Scope 2 target.

For each Scope 3 target, the organization must list the Scope 3 categories covered. Where the target does not cover all Scope 3 categories, the organization should report the percentage of Scope 3 emissions covered, explain the exclusions and describe the steps taken to expand coverage.

The organization must explain how its targets align with the latest scientific evidence on the effort needed to limit global warming to 1.5°C. It should identify the applicable sector-specific science-based pathway, target-setting framework and underlying climate and policy scenarios and explain how future developments and transition risks and opportunities were considered.

The organization must describe its target revision policy. It should also report how frequently targets are reviewed and the main reasons for revising them. Target revision should be distinguished from recalculation of base-year emissions and from restatement of previously reported information under Disclosure 2-4.

For each target, the organization must report the base year, the rationale for selecting it, base-year emissions in metric tons of CO₂ equivalent, the context for any significant change that triggered a recalculation and the previously reported base-year emissions where a recalculation occurred.

Progress must be calculated using the inventory method and reported in metric tons of CO₂ equivalent and as a percentage of base-year emissions. The organization should report current-year emissions and explain whether progress resulted from its own initiatives, other factors or a combination of both. It should also describe known barriers to target achievement and, where applicable, the role of locked-in GHG emissions.

The organization must report the standards, methodologies, assumptions and calculation tools used. It should also state whether the targets and related progress have been validated by an independent third party and, if so, identify the validating party and the standard or methodology used.

The targets reported under Disclosure 102-4 are used to report the GHG emissions reduction targets within the transition plan under Disclosure 102-1. The underlying Scope 1, Scope 2 and Scope 3 information should reconcile to Disclosures 102-5, 102-6 and 102-7 respectively.

This LRA educational guidance supports disclosure preparation. For the exact requirements, always refer to the official Global Reporting Initiative source.