Carbon target-setting for small business

What are carbon targets?

Setting a carbon target is one of the most powerful steps an SME can take on its sustainability journey. A target that's credible, honest, and grounded in your actual business creates real momentum: it focuses your team, strengthens your position with customers and procurement teams, and gives you something meaningful to report on year after year.

A carbon target is a specific goal to reduce your greenhouse gas emissions by a set amount within a set timeframe. There are several types to choose from, and many businesses use a combination:

• Absolute - a commitment to cut your total emissions by a fixed percentage from a baseline year. For example, reducing total emissions by 30% by 2030 from a 2022 baseline.

• Intensity based - a reduction relative to a business metric, such as revenue. For example, reducing emissions per £m revenue by 20% by 2028. Particularly useful if your business is growing.

• Maintenance - a commitment to keep emissions at or near zero where you already operate at very low levels. For example, maintaining near-zero Scope 1 and 2 where you run on 100% renewable electricity with no fuel use.

• Category specific - a target focused on a particular emissions source. For example, halving business travel emissions by 2027, or transitioning 80% of your top suppliers to lower-carbon alternatives by 2029.

Not sure which type is right for your business? MIT Sloan's research on setting ambitious but realistic environmental goals is a useful starting point, and we cover this in more detail in the section on how SMEs should approach target-setting below.

How do carbon targets help raise ambition?

Targets can help turn a broad intention into a clear goal that drives change. They can:

• Focus attention on the most important sources of emissions in a business.

• Create permission for people to try new ways of working that cut carbon.

• Align leaders and managers behind clear milestones that can be resourced and measured.

• Invite participation from employees and stakeholders, which strengthens delivery.

Management research shows that well-defined environmental goals concentrate attention and resources but also that they must be set in the right way.

How do carbon targets generate business value?

Targets are increasingly part of how customers and funders judge suppliers. The right targets help you:

• Win and keep public sector work - Carbon Reduction Plans require the setting of a Net Zero and the higher maturity levels of the Evergreen Sustainable Supplier Assessment (used by the NHS) are reserved for those with an SBTi-validated Net Zero target.

• Strengthen CDP scores - targets, governance and verified data support higher CDP results that many corporates see during screening.

• Improve EcoVadis ratings - EcoVadis's carbon scorecard looks at commitments, actions and reporting across Scopes 1, 2 and 3. Clear, evidenced targets help improve scores.

• Prepare for B Corp - the new standards expect a Climate Action or Transition Plan with Specific, Measurable, Achievable, Relevant, and Time-bound (SMART) targets and progress updates.

Why is setting carbon targets risky?

Targets build credibility, but they also create accountability. There are risks if you set targets that are unrealistic or unclear:

• Reputation risk if you later have to dilute or delay goals.

• Procurement risk if missed targets undermine buyer confidence or create extra scrutiny.

• Market-wide trust risk - when companies row back from target commitments, this can make all claims look weaker.

A useful example of the scrutiny that businesses face is the Corporate climate scorecard. It reviews companies that have missed or softened commitments, and contrasts them with firms still delivering. Stakeholders are watching so targets need to be honest and realistic.

How should SMEs set carbon targets?

We use a balanced method that combines science-based pathways with business realities.

1. Start with science. Use the SBTi framework to understand what a 1.5°C-aligned pathway implies for your footprint. This sets a credible level of ambition for buyers and auditors.

2. Model your reality. Build a bottom-up view of what you can deliver given growth, budgets, leased assets, landlord constraints and supplier readiness. Be clear about the gap between the science-aligned pathway and what you can deliver today. That gap is where innovation, collaboration and advocacy are needed.

3. Choose target types that fit:

   • Intensity targets may be more appropriate in the short-term, particularly where there is significant planned business growth.

   • Maintenance targets for Scope 1 & 2 where you already operate at very low emissions.

   • Category targets for big sources like business travel, logistics or purchased goods & services.

4. Tell your carbon story. Publish your baseline year, scopes, methods, assumptions and data quality notes. Explain what is inside and outside your control, and how you will improve the data next year.

5. Review and adjust. Set an annual target check. If conditions change, explain the update to your target and what you learned.

How can we help?

If you want targets that are ambitious, honest and practical for a growing SME, we can support you at every step.

1. Build a reliable carbon baseline. We create a clear, GHG Protocol-aligned footprint that covers the scopes relevant to your business. This gives you the dependable baseline your targets must sit on.

2. Model a realistic pathway. We combine top-down science with bottom-up modelling to show what's achievable for your business in the real world. You'll see the gap between what science requires and what you can deliver today.

3. Set credible, defensible targets. We help you choose near-term and long-term targets that reflect growth, constraints, supply-chain realities and data quality. Targets will be measurable, transparent and ready for scrutiny from buyers, investors and certification bodies.

4. Create clear, plain-English documentation. We can advise on the wording you need for websites, tenders, reports, B Corp submissions and stakeholder communications. If you need more hands-on communications support, we can help with that too.

5. Prepare for SBTi validation. If you need science-aligned targets, we can prepare the evidence, documentation and modelling required for SBTi submission. We take care of the complexity so you can stay focused on running the business.

6. Align with CDP, EcoVadis and NHS Evergreen. We help you map your targets and evidence to the requirements that affect revenue. This includes Carbon Reduction Plans, Evergreen readiness and the documentation CDP and EcoVadis expect to see.

7. Build an action plan your team can actually deliver. We create a simple, practical plan that assigns responsibilities, timelines and next steps so progress becomes part of everyday operations rather than an annual scramble.

If you'd like this support, we can tailor a package for your business and walk you through the process step by step.