Checking the scope of a retailer's environmental target

An environmental target is interpretable only when its measure, business boundary, base period and deadline are known. Before asking whether a retailer is “on track”, establish what the target includes and compare progress on the same basis. A future target is an objective, not evidence that the outcome has occurred.

Write down the target in full

Start with the retailer’s wording and disclosure date. Record whether the target covers emissions, electricity, water, packaging or waste. Identify the unit: total tonnes, a percentage of packaging, emissions per unit of sales, or another measure. A percentage without its denominator can conceal the scale of the activity behind it.

A retailer may change its store network, acquire another business or revise its measurement method during a target period. Ask whether earlier figures were restated or the change explained. Otherwise an apparent improvement may partly reflect a changed boundary.

Apply an extra check to emissions targets

For a greenhouse gas target, identify whether it covers Scope 1, Scope 2 and Scope 3 emissions and which Scope 3 categories are included if reported. A target for direct operations and purchased energy should not be described as a target for the entire value chain.

Distinguish an absolute target, which concerns a total amount, from an intensity target, which concerns emissions relative to another business measure. Lower intensity does not by itself establish a lower absolute total.

Separate gross reductions from net targets that rely on carbon credits. Ask how much of the intended result comes from changes in gross measured emissions and how much depends on credits.

For entities applying it, AASB S2 addresses climate-related disclosure requirements relating to governance, strategy, risk management, and metrics and targets, including scenario analysis and Scope 1, Scope 2 and Scope 3 emissions. The standard’s reporting obligations should not be assumed to cover every retailer.

Absolute vs Intensity Emissions Targets: Implications for Retailers

Compare progress with the promised measure

A target announcement and progress update may use different units or reporting periods. Match the base and current figures before calculating a change. Check whether the update reports measured performance, a projection or an activity expected to improve future performance. Installing more efficient equipment is progress on an action plan; the emissions or energy result still needs its own measure.

For aspirational objectives, look for named actions, milestones, dependencies and revisions. An absent progress measure leaves achievement unverified; it does not establish that the target has failed.

A sound summary names the measure and boundary, reports progress for a defined period and keeps exclusions beside the result. It should not turn a narrow target into a whole-business verdict.

Key Metrics for Evaluating Retail Environmental Progress