Principles for setting climate targets: A guide for Australian boards
Friday, 16 August 2024
A resource to support directors through the process of climate target setting
The 10 guiding principles for target setting have been created to help Australian boards establish climate targets and manage associated risks. With mandatory climate reporting on the horizon, Australian organisations must be ready to disclose key details of their climate targets.
This resource provides foundational principles to support boards in setting climate targets and includes illustrative examples.
The principles are organised around the four phases of the target-setting process: development, implementation, communication and review. Suggested questions for directors to ask management are also provided for each phase.
Jointly developed by the AICD, Insurance Council of Australia and Herbert Smith Freehills, the resource uses the insurance sector as a case study. However, the principles for climate target setting are broadly applicable to all organisations.
Developing targets
- Principle 1 – Collect reliable baseline data
- Principle 2 – Develop targets that meet ambition and align with strategy, while recognising key dependencies e.g. emerging technology
- Principle 3 – Undertake verification and assurance
- Principle 4 – Establish a record-keeping system
Implementing targets
- Principle 5 – Clarify executive accountability
- Principle 6 – Identify and allocate required resources
- Principle 7 – Develop an implementation plan
Communicating targets
- Principle 8 – Communicate targets clearly and consistently
- Principle 9 – Disclose underpinning assumptions, contingencies, uncertainties and risks
Reviewing targets
- Principle 10 – Establish a monitoring system
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