Science Based Targets Initiative (SBTi)

What is SBTi and what is its primary goal? 

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The Science Based Targets initiative (SBTi) is a corporate climate action organization that empowers companies and financial institutions globally to play a role in combating the climate crisis. It is a collaboration between CDP, the United Nations Global Compact, World Resources Institute (WRI), and the World Wide Fund for Nature (WWF). 

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The primary goal of SBTi is to drive ambitious climate action in the private sector by enabling companies to set greenhouse gas (GHG) emissions reduction targets in line with the latest climate science. These targets aim to limit global warming to 1.5°C above pre-industrial levels, as outlined in the Paris Agreement. 

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Who can set a science-based target? 

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Any organisation, government body, or individual can set a science-based target aligned with the latest climate science. 

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For corporates, the SBTi is the internationally recognised certifying body and provides specific guidance. Small to Medium Enterprises (SMEs) have a simplified validation process. Financial institutions can also set SBTs through the SBTi.

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Currently, the SBTi does not validate or provide guidance for cities, local governments, public sector institutions, educational institutions, or non-profit organizations, although the Science Based Targets Network (SBTN) offers guidance for these entities and for nature-related targets.  

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The SBTi Process

The SBTi has a structured 6-step process for companies to set science-based targets:

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STEP 1: Register

Organisations must register for an account using the new SBTi Services Validation Portal.

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STEP 2. Commit

Submit a letter of intent to set a science-based target. Commitments are now optional. If the corporate or financial institution is ready to proceed with validation, the company can skip the commitment stage. 

For SMEs, this involves completing an online form. This step requires executive or board-level buy-in and internal approval to allocate resources. 

Companies have 24 months after committing to complete the subsequent steps.

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STEP 3: Develop

Work on an emissions reduction target that aligns with SBTi's criteria.

This involves using SBTi's tools and guidance, considering the global carbon budget, emissions scenarios, and allocation approaches. 

For SMEs, targets are often automatically set through their online tool20 . Companies should check for sector-specific guidance. If none exists, the cross-sector pathway (absolute contraction) can be used. 

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STEP 4: Submit

Present the developed target to the SBTi Services Validation Portal for official validation.

This involves submitting relevant forms and potentially paying a validation fee (which varies based on company size and target type). SMEs submit through their online form.

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Note: SBTi Services is the wholly owned subsidiary of its parent, the Science Based Targets initiative, which helps standards for businesses to reduce their greenhouse gas emissions in line with science. 

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STEP 5 : Communicate 

Announce the validated target to stakeholders. The SBTi also publicly lists companies with validated targets.

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STEP 6 Disclose 

Report on company-wide emissions and progress against the target on an annual basis. 

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Target Setting

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What are the common target setting approaches? 

The SBTi primarily uses two common approaches :

1. Absolute Contraction: Reducing absolute GHG emissions at a rate consistent with limiting global warming to 1.5°C. Currently, this implies a 43% reduction by 2030 from a base year. This is the cross-sector pathway applicable to most companies.
2. Sectoral Decarbonisation Approach (SDA): Using sector-specific pathways and guidance that recognise the unique challenges and opportunities within different industries . SBTi provides guidance for sectors like Apparel, Cement, Financial Institutions, and Power.

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What are other target setting methods? Additional methods include :

• Convergence or Intensity Method: Setting targets based on an emissions intensity metric (e.g., emissions per unit of production). Generally applicable to Scope 3 or within approved 1.5°C sector pathways for Scope 1 and 2.

• Supplier/Customer Engagement Targets: Setting targets for suppliers or customers to adopt science-based targets within a specific timeframe (usually 5 years).
• Renewable Electricity Targets: Committing to sourcing a high percentage (e.g., 100% by 2030, aligned with RE100) of electricity from renewable sources, accepted as an alternative to a Scope 2 emissions reduction target.

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What are near-term, long-term, and net-zero targets?

• Near-term targets involve significant emission reductions within the next 5 to 10 years, aiming for approximately a 50% reduction by 2030. They are a prerequisite for setting net-zero targets.
• Long-term targets define the extent of emission reductions needed to reach net-zero, typically requiring at least a 90% reduction in Scope 1 & 2 emissions and 90% of Scope 3 emissions by a target date before 2050 (or 2040 for the power sector)
• Net-zero targets are achieved when an organisation reaches its long-term science-based target and neutralises any residual emissions (the remaining 10% or less) through permanent carbon removal and storage. The SBTi's Net-Zero Standard also recommends Beyond Value Chain Mitigation (BVCM), which involves investing in emissions reduction or removal outside the company's value chain.

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Validation and Benefits

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Is there an SBTi scoring system? 

The sources do not explicitly mention a scoring system in the same way as CDP. The SBTi validates if a company's targets are science-based according to their criteria. 

Successful validation leads to public recognition.

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Is SBTi adoption mandatory, and what are the benefits? 

Currently, setting SBTs is largely voluntary. However, it can help organisations prepare for potential future mandatory reporting. 

The benefits of setting SBTs include:

• Clarity in decarbonization goals.
• Potential cost savings through energy efficiency.
• Increased resilience to regulatory changes.
• Enhanced investor confidence by demonstrating commitment to ESG.
• Opportunities for innovation in business models and value chains.
• Leadership and a competitive edge.
• Improved reputation with stakeholders and consumers.
• Significant contribution to mitigating climate change.

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Membership and Stakeholders

The SBTi was founded by CDP, WRI, WWF, and the UN Global Compact. 

Key stakeholders include:

• Companies and financial institutions setting and implementing SBTs (over 5,000 companies globally have set SBTs38 ).
• Investors who increasingly consider ESG factors.
• Customers who are becoming more climate-conscious.
• Suppliers who are encouraged to set their own targets through engagement programs.
• Employees who may be attracted to companies with strong sustainability commitments.
• The SBTi itself, which sets the standards and validates targets .
• Organisations like RE100, which SBTi aligns with for renewable electricity targets.
• Science Based Targets Network (SBTN), which provides guidance for broader sustainability targets including nature.

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Ensuring Quality and Comparability

The SBTi ensures the quality and comparability of targets through:

• Clear criteria and recommendations that organisations must follow. 
• Alignment with the latest climate science and the goals of the Paris Agreement.
• Reliance on the GHG Protocol for emissions accounting. 

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Validation process

Targets are submitted to SBTi Services, a separate target validation entity, through its Validation Portal for assessment.

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A validation process by SBTi Services’ technical experts, providing feedback and support.

• Regular review of criteria (at least every 5 years) to ensure consistency with evolving science.
• Public disclosure of committed and validated targets, promoting transparency.

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Evolution of SBTi

The SBTi is continuously evolving, with recent developments including:

• The development and release of the Net-Zero Standard in 2021, providing a framework for companies to set credible net-zero targets.
• Ongoing development of sector-specific guidance for a wider range of industries.
• Increased focus on the importance of Scope 3 emissions targets.
• Emphasis on the need for long-term targets aligned with achieving net-zero
• Recognition of the role of Beyond Value Chain Mitigation (BVCM) in achieving net-zero .
• Regular updates to the SBTi criteria to reflect the latest climate science and best practices (e.g., update on March 13, 202433 ).

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Where do SBTs fit in Corporate Reporting?

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Historically, sustainability reporting (including emissions and targets) has been largely voluntary and often presented in separate reports or as part of annual reports. The term ESG reporting has become synonymous with sustainability reporting. Several frameworks exist for ESG reporting, including GRI, CDP, CDSB, SASB, and TCFD (now replaced by ISSB).

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The International Sustainability Standards Board (ISSB) is developing global sustainability reporting standards, building on existing frameworks, which are becoming mandatory in some regions (like Australia with AASB S2).

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Most reporting frameworks recommend reporting on emissions and setting targets, including under the ISSB’s S2 standard. 

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In this context, SBTs could be communicated in corporate sustainability or ESG reports, which are increasingly expected by stakeholders and becoming mandatory in some regions with the adoption of standards like those from the ISSB. Organisations should also disclose their SBTs on their websites and in other relevant communications. Annual reporting of emissions and progress against SBTs is considered best practice, regardless of SBTi validation status.

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Alignment with Other Frameworks

• SBTs are aligned with the goals of the UN Paris Agreement
• The SBTi relies on the GHG Protocol for emissions accounting.
• SBTi's renewable electricity targets are aligned with the recommendations of RE100 .

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The broader landscape of sustainability reporting frameworks, including GRI, CDP, SASB (now integrated into ISSB), and TCFD (now succeeded by ISSB), all emphasise the importance of emissions reduction and target setting, and SBTs provide a science-based approach to this. The ISSB's S2 standard also recommends reporting on emissions and setting targets .

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Organisations Involved

• Science Based Targets initiative (SBTi): A collaboration between CDP, World Resources Institute (WRI), World Wide Fund for Nature (WWF), and the United Nations Global Compact. It is the primary body for setting and validating corporate science-based targets.
• Science Based Targets Network (SBTN): Provides guidance and validation for nature and city-related SBTs.
• Science Based Targets Services: Checks and validates the science-based targets of corporates, financial institutions, and small and medium enterprises (SMEs) across the globe. SBTi Services is a wholly-owned subsidiary of the standard-setter, the Science Based Targets initiative.
• CDP (formerly Carbon Disclosure Project): A partner in the SBTi and runs a global environmental disclosure system.
• World Resources Institute (WRI): A partner in the SBTi.
• World Wide Fund for Nature (WWF): A partner in the SBTi..
• United Nations Global Compact: A partner in the SBTi.
• RE100: An internationally recognized benchmark setter for renewable electricity procurement, whose recommendations align with SBTi criteria for renewable electricity targets35 .
• Global Reporting Initiative (GRI): An organization that develops reporting standards for sustainability and is one of the common frameworks used by corporations.
• International Sustainability Standards Board (ISSB): Developed sustainability reporting standards built on the work of several existing frameworks.

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Resources and Further Information

Science Based Targets initiative (SBTi) Website: https://sciencebasedtargets.org/

SBTi Criteria: https://sciencebasedtargets.org/resources/files/SBTi-criteria.pdf

SBTi Target Validation Service Offerings (Pricing): https://sciencebasedtargets.org/resources/files/SBTi-Target-Validation-Service-Offerings.pdf

SBTi Services: https://sbtiservices.com/

SME Target Setting Process: https://sciencebasedtargets.org/small-and-medium-enterprise-sme-target-setting-process

SBTi Sectoral Guidance: https://sciencebasedtargets.org/sectors

Companies Taking Action (Target Dashboard): https://sciencebasedtargets.org/target-dashboard

Science Based Targets Network (SBTN): https://sciencebasedtargetsnetwork.org/our-mission/

Global Carbon Budget: https://globalcarbonbudget.org/

UN Paris Agreement: https://www.un.org/en/climatechange/paris-agreement

IPCC Reports: https://www.ipcc.ch/assessment-report/ar6/

RE100: https://www.there100.org/