How to set targets & reduce emissions: a practical beginner's guide

Businesses are increasingly expected to understand, manage, and reduce their greenhouse gas emissions. Measuring your emissions to a recognised quality standard like ISO is an important first step, but the real value comes from using that information to drive reductions. This is often what improves your commercial resilience, provides operational efficiencies, reduces regulatory or market risk and provides a competitive edge.

If you're wondering where to start, setting an emissions reduction target can help provide direction, focus efforts, and demonstrate your commitment to continuous improvement.

Here's a simple five-step approach to getting started on setting a target and reducing your emissions profile towards your goal.

Step 1: Understand your baseline

Before you can reduce emissions, you need to know where you're starting from.

Your baseline year is a snapshot of your organisation's greenhouse gas emissions during a specific reporting period. It provides the reference point against which future reductions will be measured.

Emissions are often grouped into different categories, commonly referred to as Scope 1, Scope 2, and Scope 3 emissions. These cover direct emissions from sources you own or control, indirect emissions from purchased energy, and other indirect emissions that occur across your value chain. Understanding which categories contribute most to your overall profile can help focus your reduction efforts.

When reviewing your baseline, consider what makes up your profile:

• Which sources or categories contribute the most emissions.
• Where emissions occur across your organisation, such as business unit, site, region, product, or service.
• How emissions have changed over time (where historical data is available).
• Factors that may have influenced emissions in the baseline year, such as business changes, economic conditions, weather events, policy changes, or supply chain disruptions.

A well-defined baseline gives you confidence that future reductions can be measured consistently and accurately.

Tip: Choose a baseline year that reflects typical business operations and for which you have reliable data.

Step 2: Identify your biggest emissions sources

Not all emissions sources have the same impact.

Reviewing your emissions profile can help identify hotspots, or the activities responsible for the largest share of your emissions profile.

Common examples include:

• Fuel use in vehicles and equipment
• Purchased electricity
• Air travel and business travel
• Freight and logistics
• Purchased goods and services
• Waste generated through operations
• Supply chain or value chain

Focusing on the largest emissions sources often provides the greatest opportunity for meaningful reductions.

In many organisations, a small number of emissions sources account for a large proportion of the total profile. Prioritising these hotspots can often deliver greater results than trying to tackle every source at once.

When identifying priority areas, ask yourself:

• Which sources contribute the most emissions?
• Which sources can we have significant influence on?
• Where could improvements be implemented relatively quickly?
• Which improvements require longer-term planning or investment?
• What budget, time, and resources are available?

Understanding these opportunities will help inform realistic and effective target setting.

Step 3: Set a realistic but ambitious target

Effective emissions reduction targets are typically ‘SMART’:

• Specific
• Measurable
• Ambitious
• Realistic
• Time-bound

The target should be as ambitious as possible (science-aligned target levels are best practice), yet still realistic to achieve.Developing and implementing an action plan, which we cover in Step 4, is essential to give confidence the target is achievable.

Targets can be expressed in different ways.

An absolute target aims to reduce total emissions, such as reducing all organisation emissions by 20% by 2030.

An intensity target measures emissions relative to a business metric, such as emissions per employee, kilometre travelled, tonne of product produced, or dollar of revenue. This approach can be useful for growing organisations that want to improve efficiency while continuing to expand.

Examples might include:

• Reduce operational emissions per m² building floor area by 20% by 2030.
• Reduce fuel-related vehicle fleet emissions per km travelled by 30% over the next five years.
• Reduce emissions per employee by 15% by 2028.

The appropriate level of ambition will depend on your organisation characteristics, profile, industry sector, and available reduction opportunities.

When setting a target, consider:

• Available technologies and solutions
• Business growth plans
• Financial investment requirements
• Industry expectations
• Stakeholder expectations

Remember that a target does not need to be perfect from day one. In fact, it should be reviewed regularly as circumstances change. The most important thing is having a clear direction and committing to progress your reduction plan.

Step 4: Turn your target into action

A target on its own will not reduce emissions. Success comes from identifying and implementing practical actions. Developing a reduction plan with clear responsibilities, timeframes, and expected outcomes can help turn ambition into measurable results.

Depending on your organisation's emissions profile, actions may include:

Buildings

• Implementing energy efficiency options such as lighting or equipment upgrades
• Switching to renewable electricity

Transport

• Transitioning to lower-emissions vehicles
• Reducing business travel
• Encouraging active or public transport options

Procurement

• Engaging with suppliers to identify emission reduction opportunities
• Considering lower-emissions products and services
• Incorporating sustainability criteria into purchasing decisions

Operations

• Reducing waste
• Improving resource efficiency
• Embedding sustainability into business decision-making

While high-integrity carbon offsetting can play a role in supporting credible climate action, the primary focus should be on reducing emissions at the source wherever practical.

Direct reductions often deliver additional business benefits, such as improved efficiency, reduced costs, and reduced exposure to future regulatory or market risk.

Step 5: Monitor, measure, and review progress

Emissions reduction is an ongoing journey rather than a one-off project.

Regular monitoring helps you understand what is working, identify challenges, and adjust your approach as needed.

Consider reviewing:

• Total emissions reduction performance
• Progress against targets
• Changes in key emissions sources
• Success of reduction initiatives
• New opportunities for improvement

As your organisation's understanding of emissions management grows, your targets and action plans may evolve too.

In some cases, significant organisational changes, such as acquisitions, divestments, or substantial changes in methodology, may require a baseline review to ensure progress continues to be measured consistently over time.

Continuous improvement is often more valuable than aiming for perfection.

A simple example

Imagine an organisation with annual emissions of 1,000 tCO₂e.

After reviewing its profile, it identifies:

• 50% from fuel use
• 25% from electricity
• 15% from business travel
• 10% from waste and other sources

The organisation sets a target to reduce emissions by 25% over five years.

To achieve this, it:

• Transitions part of its vehicle fleet to lower-emissions alternatives
• Improves energy efficiency in its buildings
• Introduces a travel policy favouring virtual meetings where appropriate

Each year, the organisation tracks progress and updates its action plan based on results.

This approach helps ensure that reduction efforts remain focused, measurable, and aligned with business objectives.

In summary

Setting an emissions reduction target does not require having all the answers upfront. The key is to start with a clear understanding of your emissions baseline, focus on the areas where you can make the biggest impact, and commit to taking action over time.

Every organisation's journey will look different, but those that move from measurement to action are often best positioned to realise both environmental and commercial benefits. By setting a clear target, prioritising meaningful reductions, and regularly reviewing progress, organisations can build momentum and create lasting value for their business, stakeholders, and the climate.

Support with target setting

For clients interested in setting emissions reduction targets that are science-based, practical and achievable, reach out to your dedicated Programme Lead or our Client Support Team at support@toitu.co.nz, or call 0800 366 275 (option 2) at any time.

Toitū can help you navigate our Climate Impact Guidance so you can approach target setting and reductions with confidence.