Principles for setting climate targets: A guide for Australian boards

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