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Science-based Target Setting

Situation

Top Form International is an original equipment manufacturer (OEM) of bras, recognized as one of the leading OEM brassiere manufacturers in the world. With its corporate office based in Hong Kong, the company has manufacturing sites across China, Thailand and Cambodia. Facing increasingly stringent ESG disclosure requirements, and to strengthen competitive advantages by setting a carbon reduction target, the company believes there is a huge upside for establishing its science-based targets (SBT), which are essential for instilling confidence in investors.

Challenge

According to Science-based Target Initiative (SBTi), if a company has over 40% of its total GHG emissions coming from Scope 3, then a target on Scope 3 must be set. One of the challenges would be to ascertain if Top Form meets the threshold. Besides, given the multiple manufacturing locations, emission data for each region have to be compiled so as to analyze the sources and levels of emissions. With that said, the biggest challenge would be to set an appropriate SBT to follow and commit to, taking into consideration the constantly changing compliance regulations, alongside immense pressure from various parties urging Top Form to further enhance sustainability of its operations. On one hand, investors are becoming increasingly wary of sustainability, demanding better practices and more transparent disclosures; on the other hand, competitors are continuously enhancing their ESG performances. Nonetheless, difficulties in communicating the company’s commitment to clients and stakeholders may also lead to its efforts going unnoticed.  

Solution

Top Form commissioned Alaya Consulting to advise on SBT setting due to its solid track record in setting and tracking SBT. Alaya has taken the four-step process in setting targets. First, by collecting GHG emission data including a Scope 3 screening, Alaya would be able to get hold of the full picture of GHG inventory. This is followed by the selection of baseline and target years, according to the company’s projected growth rate. The third step entails setting an appropriate target in line with Absolute Emissions Contraction. Lastly, Alaya would determine a SBTi target for Top Form’s approval. Throughout the entire target-setting process, Alaya would provide consistent support and maintain regular updates with Top Form, ensuring that a SMART (specific, measurable, attainable, relevant and timely) SBT is being set.