The target-setting process in the CO2 Performance Ladder: does it lead to ambitious goals for carbon dioxide emission reduction?

Abstract Energy management and carbon accounting schemes are increasingly being adopted as a corporate response to climate change. These schemes often demand the setting of ambitious targets for the reduction of corporate greenhouse gas emissions. However, only limited empirical insight is available regarding the companies' target-setting process and the auditing practice of certification agencies that evaluate ambition levels of greenhouse gas reduction targets. We studied the target-setting process of firms participating in the CO2 Performance Ladder. The CO2 Performance Ladder is a new certifiable scheme for energy management and carbon accounting that is used as a tool for green public procurement in the Netherlands. This study aimed at answering the question ‘To what extent does the current target-setting process in the CO2 Performance Ladder lead to ambitious CO2 emission reduction goals?’. An exploratory research design was used as the main research approach for this study. Data were collected through interviews with relevant stakeholders (companies, consultants, auditors and scheme owner), document reviews of the certification scheme, and monitoring reports. The research findings indicated that several certification requirements for setting CO2 emission reduction targets were interpreted differently by the various actors. Conformity checks by the auditors did not always include a full assessment of all certification requirements because of the lack of well-defined assessment criteria. The research results also indicated that corporate CO2 emission reduction targets were not ambitious. The analysis of the target-setting process revealed that there was a semi-structured bottom-up auditing practice for evaluating the corporate CO2 emission reduction targets, but the final assessments of whether target levels were sufficiently ambitious were not very well defined. The main conclusion is that the current target-setting process in the CO2 Performance Ladder did not necessarily lead to the establishment of the most ambitious goals for CO2 emission reduction. Other approaches for setting target levels, such as minimum performance levels, must be considered to maintain the CO2 Performance Ladder as a valid tool for green public procurement.