Voluntary Global

Science Based Targets initiative (SBTi)

The Science Based Targets initiative drives ambitious corporate climate action by enabling organisations to set greenhouse gas reduction targets aligned with the latest climate science. SBTi provides a clearly-defined pathway for companies to reduce emissions in line with the Paris Agreement goals of limiting global warming to 1.5°C above pre-industrial levels.

Overview

The Science Based Targets initiative (SBTi) is a partnership between CDP, the United Nations Global Compact, World Resources Institute (WRI), and the World Wide Fund for Nature (WWF). Since its launch in 2015, SBTi has become the gold standard for corporate climate target-setting. SBTi defines and promotes best practice in science-based target setting, offers resources and guidance to reduce barriers to adoption, and independently assesses and approves companies' targets. With over 4,000 companies committed and more than 2,500 with validated targets, SBTi represents the largest global corporate climate initiative. Targets are considered 'science-based' if they are in line with what the latest climate science deems necessary to meet the goals of the Paris Agreement – limiting global warming to 1.5°C above pre-industrial levels.

Key Points

  • Targets aligned with 1.5°C Paris Agreement pathway
  • Independent validation and approval of corporate targets
  • Covers near-term (5-10 years) and long-term (net-zero) targets
  • Mandatory Scope 3 targets for most companies
  • Sector-specific guidance for high-impact industries
  • Free commitment and validation for SMEs

Disclosure Pillars

Key areas of disclosure required under SBTi

1

Near-Term Targets

Targets that cover a 5-10 year period, focusing on rapid emissions reductions aligned with 1.5°C pathways.

  • Scope 1 and 2 emissions reduction required
  • Scope 3 required if >40% of total emissions
  • Must cover at least 95% of Scope 1 and 2 emissions
  • Linear annual reduction of at least 4.2% for 1.5°C alignment
2

Long-Term Targets (Net-Zero)

The SBTi Net-Zero Standard requires companies to set long-term targets to reach net-zero emissions by 2050 or sooner.

  • Reduce emissions by at least 90% across all scopes
  • Neutralise residual emissions through carbon removal
  • No use of offsets to meet near-term targets
  • Interim targets required every 5 years
3

Scope 3 Requirements

SBTi requires comprehensive Scope 3 target-setting for companies where value chain emissions are significant.

  • Required if Scope 3 is >40% of total emissions
  • Must cover at least 67% of Scope 3 emissions
  • Supplier and customer engagement targets accepted
  • Sector-specific approaches for complex value chains
4

Sector-Specific Pathways

SBTi provides tailored guidance for high-impact sectors with unique decarbonisation challenges.

  • Financial institutions (portfolio alignment)
  • Forest, land and agriculture (FLAG)
  • Power generation
  • Transport (aviation, maritime, road)
  • Buildings and construction

Implementation Timeline

Key dates and milestones for SBTi compliance

1
Step 1

Commit

Submit a commitment letter to set science-based targets within 24 months. Your company will be listed on the SBTi website as 'committed'.

2
Step 2

Develop Targets

Develop near-term and/or long-term science-based targets using SBTi criteria, tools, and sector guidance. Calculate your full emissions inventory including Scope 3.

3
Step 3

Submit for Validation

Submit your targets through the SBTi Target Validation Service. The validation team reviews targets against the latest criteria and provides feedback.

4
Step 4

Communicate

Once validated, announce your targets publicly and report progress annually through CDP or equivalent disclosure platforms.

5
Step 5

Disclose Progress

Track and report progress against targets annually. Targets must be revalidated every 5 years to ensure alignment with evolving climate science.

Key Benefits

Why organisations choose to comply with SBTi

Credibility & Trust

Independent validation provides external assurance that your targets are genuinely aligned with climate science, building stakeholder confidence.

Investor Expectations

Meet growing investor demand for credible climate commitments. Many institutional investors now expect portfolio companies to have science-based targets.

Competitive Advantage

Differentiate your organisation as a climate leader and meet customer expectations for sustainable supply chains.

Future-Proofing

Prepare for tightening regulations and carbon pricing by proactively reducing emissions and building resilience.

Cost Savings

Emissions reduction often drives operational efficiency, energy savings, and reduced exposure to volatile fossil fuel prices.

Supply Chain Engagement

Join a global network of over 4,000 companies working together to decarbonise value chains and share best practices.

Key Stakeholders & Institutions

CDP

Founding partner providing the disclosure platform for progress reporting

UN Global Compact

Founding partner connecting SBTi to the world's largest corporate sustainability initiative

World Resources Institute

Founding partner providing technical expertise and research

WWF

Founding partner ensuring environmental integrity of targets

We Mean Business Coalition

Strategic partner mobilising business leadership on climate

Race to Zero

UN campaign that recognises SBTi as a partner initiative

Frequently Asked Questions

Common questions about SBTi compliance

What makes a target 'science-based'?
A target is science-based if it aligns with what the latest climate science says is necessary to meet the Paris Agreement goals. For SBTi, this means targets must be consistent with limiting global warming to 1.5°C above pre-industrial levels, requiring emissions reductions of approximately 4.2% per year for Scope 1 and 2.
How much does SBTi validation cost?
Validation costs vary by company size. SMEs (fewer than 500 employees) can validate targets for free through the SME route. For larger companies, fees range from approximately USD $9,500 to $14,500 depending on target type and company size. Net-zero target validation has additional fees.
Are Scope 3 targets mandatory?
Scope 3 targets are required if your Scope 3 emissions represent more than 40% of total Scope 1, 2, and 3 emissions. Given that Scope 3 often represents 70-90% of total emissions for most companies, Scope 3 targets are required for the majority of organisations.
Can we use carbon offsets to meet SBTi targets?
No, carbon offsets cannot be used to meet near-term science-based targets. SBTi requires actual emissions reductions. However, for net-zero targets, carbon removal (not avoidance offsets) can be used to neutralise residual emissions after reducing by at least 90%.
How long does validation take?
The validation process typically takes 6-8 months from submission, though this can vary based on target complexity and the volume of submissions. Companies should allow adequate time for potential feedback rounds and target refinement.
What happens if we don't meet our targets?
Companies must report progress annually through CDP or equivalent platforms. While there's no formal penalty for missing targets, consistent underperformance may affect your company's reputation and stakeholder relationships. SBTi encourages continuous improvement and transparent reporting.
How often do targets need to be updated?
Targets must be revalidated at least every 5 years to ensure they remain aligned with the latest climate science. Companies may also choose to update targets earlier if they've achieved significant progress or if business circumstances change substantially.
Is SBTi relevant for Australian companies?
Yes, SBTi is highly relevant for Australian companies. Over 150 Australian organisations have committed to or set science-based targets. With Australia's mandatory climate reporting requirements (AASB S2) referencing transition planning, having validated SBTi targets demonstrates credible climate ambition.

Key Terminology

Near-Term Target

A 5-10 year emissions reduction target aligned with 1.5°C pathways, covering Scope 1, 2, and often Scope 3 emissions.

Net-Zero Target

A long-term commitment to reduce emissions by at least 90% across all scopes by 2050, with remaining emissions neutralised through carbon removal.

1.5°C Pathway

An emissions reduction trajectory consistent with limiting global temperature rise to 1.5°C above pre-industrial levels.

Absolute Target

A target that measures emissions in absolute terms (e.g., tonnes CO2e), regardless of business growth.

Intensity Target

A target that measures emissions relative to a business metric (e.g., emissions per unit revenue or per product).

FLAG Targets

Forest, Land and Agriculture targets - sector-specific guidance for companies with land-intensive operations.

Start Your Science-Based Target Journey

NetNada helps you calculate your complete emissions inventory, develop science-aligned reduction targets, and prepare for SBTi validation with confidence.