Science Based Targets initiative (SBTi)
The Science Based Targets initiative enables companies to set greenhouse gas emissions reduction targets in line with climate science, ensuring that corporate climate action is consistent with the Paris Agreement goal of limiting global warming to 1.5°C.
SBTi provides the framework, criteria, and validation process for companies to set science-based targets, enabling them to demonstrate climate leadership and contribute to global climate goals.
Aligned with Paris Agreement 1.5°C goal
Near-term and net-zero targets
Independent validation process
Thousands of companies committed
SBTi in 30 Seconds
SBTi enables companies to set science-based emissions targets
Targets aligned with Paris Agreement 1.5°C goal
Covers near-term (5-10 years) and net-zero targets
Independent validation by SBTi
Partnership between CDP, UN Global Compact, WRI, WWF
Voluntary but widely adopted
SBTi provides the framework for science-based climate targets
What SBTi Actually Does
SBTi enables companies to set emissions reduction targets that are aligned with climate science, ensuring that corporate climate action contributes to global climate goals.
Define Science-Based Criteria
Target criteria - what constitutes a science-based target
Validation standards - assessment methodology
Best practices - guidance for target setting
Validate Company Targets
Independent assessment - validate against criteria
Feedback process - guidance for improvement
Public listing - recognized companies
Provide Sector Guidance
Sector-specific methods - tailored approaches
Target setting tools - practical resources
Technical assistance - support for companies
Drive Corporate Climate Action
Climate leadership - ambitious targets
Investor expectations - meet market demands
Regulatory alignment - prepare for regulations
SBTi enables companies to set targets aligned with climate science
History & Background
SBTi was established to enable companies to set emissions reduction targets in line with climate science.
Launch in 2015
SBTi was launched in 2015 as a partnership between CDP, the UN Global Compact, World Resources Institute (WRI), and World Wide Fund for Nature (WWF). It was established to help companies set science-based targets in line with the Paris Agreement.
Growth and Expansion
Since its launch, SBTi has grown rapidly, with thousands of companies across more than 70 countries committing to or setting science-based targets. The initiative has expanded its scope to include net-zero targets and sector-specific guidance.
Net-Zero Standard
In 2021, SBTi launched the Net-Zero Standard, providing criteria and guidance for companies to set net-zero targets. The standard requires companies to reduce emissions by at least 90% and neutralize residual emissions.
Driving Corporate Climate Action
SBTi has become the leading framework for corporate climate targets, enabling companies to demonstrate climate leadership and contribute to global climate goals.
Paris Agreement Alignment
SBTi is directly aligned with the Paris Agreement goal of limiting global warming to 1.5°C compared to pre-industrial levels.
1.5°C Pathway
Science-based targets are designed to ensure that company emissions reductions are consistent with the level of decarbonization required to limit global warming to 1.5°C, as set out in the Paris Agreement.
Carbon Budget
SBTi targets are based on the global carbon budget - the total amount of CO2 that can be emitted while staying within the 1.5°C limit. Company targets are set to ensure fair allocation of this budget.
Global Contribution
By setting science-based targets, companies contribute to the global effort to limit climate change. SBTi enables the private sector to play its part in achieving the Paris Agreement goals.
Science-Based Climate Action
SBTi ensures that corporate climate targets are based on climate science, enabling companies to contribute meaningfully to the Paris Agreement goals.
Types of Targets
SBTi provides frameworks for two types of targets: near-term targets and net-zero targets.
Near-Term Targets
Near-term targets cover 5-10 years and require immediate emissions reductions:
- • Scope 1 and 2: 42-50% reduction by 2030
- • Scope 3: 25% reduction by 2030 (if material)
- • Timeframe: 5-10 years from submission
Net-Zero Targets
Net-zero targets require deep decarbonization and neutralization of residual emissions:
- • Emissions reduction: At least 90% across all scopes by 2050 or sooner
- • Residual emissions: Neutralized with permanent carbon removals
- • Long-term targets: Set for 2050 or sooner
Two-Target Approach
Companies are encouraged to set both near-term targets (5-10 years) to drive immediate action and net-zero targets (long-term) to define their pathway to full decarbonization.
Near-Term Targets
Near-term targets drive immediate emissions reductions over a 5-10 year timeframe.
Scope 1 and 2 Requirements
Companies must reduce absolute Scope 1 and 2 emissions by at least 42% by 2030 (for 1.5°C pathway) or 25% by 2030 (for well-below 2°C pathway). These reductions must be achieved through direct action, not offsets.
Scope 3 Requirements
If Scope 3 emissions are material (more than 40% of total emissions), companies must set Scope 3 targets. Scope 3 targets require a 25% absolute reduction by 2030 (for 1.5°C pathway) or 25% intensity reduction (for well-below 2°C pathway).
Target Timeframe
Near-term targets must cover 5-10 years from the date of submission to SBTi. Companies must recalculate targets if there are significant changes that affect the baseline or target.
Immediate Action Required
Near-term targets drive immediate emissions reductions, ensuring that companies take action now rather than delaying climate action to the future.
Net-Zero Targets
The SBTi Net-Zero Standard provides criteria for companies to set net-zero targets.
90% Emissions Reduction
Companies must reduce emissions across all scopes by at least 90% by 2050 or sooner. This deep decarbonization is the primary requirement for net-zero targets.
Residual Emissions
Residual emissions (up to 10%) must be neutralized through permanent carbon removals, such as direct air capture with storage or nature-based solutions with long-term storage.
No Offsets for Reductions
Carbon offsets cannot be used to meet the 90% emissions reduction requirement. Offsets can only be used to neutralize residual emissions after deep decarbonization has been achieved.
Long-Term Targets
Net-zero targets must be set for 2050 or sooner. Companies must also set near-term targets (5-10 years) to drive immediate action on the pathway to net-zero.
Deep Decarbonization First
The SBTi Net-Zero Standard prioritizes deep emissions reduction over offsetting, ensuring that companies take real action to decarbonize their operations and value chains.
Validation Process
Companies must go through a validation process to have their targets recognized as science-based by SBTi.
Step 1: Commit
Companies submit a commitment letter to SBTi, publicly declaring their intention to set science-based targets. The commitment is published on the SBTi website.
Step 2: Develop
Companies develop their targets using SBTi methods and tools. This includes calculating their baseline emissions, selecting appropriate target setting methods, and defining their targets.
Step 3: Submit
Companies submit their targets to SBTi for validation. The submission includes target details, methodology, and supporting documentation.
Step 4: Validate
SBTi assesses the submitted targets against the validation criteria. The process typically takes 30-45 days. SBTi may provide feedback if targets do not meet criteria.
Step 5: Communicate
Once validated, companies publicly communicate their science-based targets and report annually on progress. SBTi lists validated companies on its website.
Independent Validation
The SBTi validation process ensures that targets meet rigorous criteria based on climate science, providing credibility and assurance to stakeholders.
Target Setting Methods
SBTi provides several methods for companies to set science-based targets.
Absolute Contraction Approach
Companies set absolute emissions reduction targets in line with the global carbon budget. This method is suitable for companies with stable or declining emissions intensity.
Sectoral Decarbonization Approach (SDA)
Companies set emissions intensity targets in line with sector-specific decarbonization pathways. This method is suitable for companies in sectors with growth or variable production.
SBTi Target Setting Tool
SBTi provides an online tool that helps companies calculate their science-based targets. The tool simplifies the target setting process and ensures alignment with SBTi criteria.
Sector-Specific Methods
SBTi provides sector-specific guidance for industries such as financial institutions, ICT, land transport, and others, with tailored methods for these sectors.
Flexible and Robust
SBTi provides multiple methods to accommodate different company circumstances while ensuring that all targets are aligned with climate science.
Sector-Specific Guidance
SBTi provides tailored guidance for specific sectors to address unique challenges and opportunities.
Financial Institutions
Guidance for banks, asset managers, and other financial institutions to set science-based targets for financed emissions, using methods such as temperature alignment and portfolio coverage.
Information and Communication Technology (ICT)
Guidance for ICT companies to address emissions from data centers, networks, and devices, including both operational and use-phase emissions.
Land Transport
Guidance for automotive and other land transport companies to address emissions from vehicle manufacturing and use, including fleet turnover and fuel efficiency.
Other Sectors
SBTi continues to develop guidance for additional sectors, including buildings, apparel, food and beverage, and others, to ensure all industries can set science-based targets.
Tailored Approaches
Sector-specific guidance ensures that companies in different industries can set targets that address their unique circumstances while remaining aligned with climate science.
Key Financial Mechanisms
SBTi affects companies and investors through specific financial mechanisms.
1. Transition Cost Mechanism
Investment in low-carbon technologies and processes → Capital expenditure increase
2. Risk Reduction Mechanism
Lower emissions → Reduced climate risk exposure
3. Capital Market Mechanism
SBTi validation → Investor preference → Lower cost of capital
4. Competitive Advantage Mechanism
Climate leadership → Market differentiation → Revenue impact
Financial Outputs:
• Capital expenditure - investment in decarbonization
• Risk reduction - lower climate risk exposure
• Cost of capital - investor preference for SBTi companies
• Competitive advantage - market differentiation
Real Financial Pathways
Capital Investment Pathway
SBTi Target → Low-Carbon Investment → Capital Expenditure → Long-Term Efficiency
Risk Reduction Pathway
Emissions Reduction → Lower Climate Risk → Reduced Financial Exposure
Capital Market Pathway
SBTi Validation → Investor Confidence → Lower Cost of Capital
Market Positioning Pathway
Climate Leadership → Competitive Advantage → Revenue Growth
Regulatory Readiness Pathway
SBTi Alignment → Regulatory Compliance → Avoided Penalties
Impact on Business & Strategy
Operational Impact
Investment in low-carbon technologies, process changes, energy efficiency
Strategic Impact
Climate integrated into strategy, product development, business model
Investor Impact
Enhanced investor confidence, access to green finance
Competitive Impact
Market differentiation, brand value, customer preference
SBTi drives climate integration into corporate strategy
SBTi transforms climate from a reporting exercise into a strategic business imperative
Link to Financial Impact
Risk → emissions reduction
Capital → investor decisions
Costs → transition investment
Value → competitive advantage
SBTi is a key mechanism through which climate action becomes visible, measurable, and actionable in corporate strategy
SBTi vs Other Climate Target Approaches
SBTi differs from other climate target approaches in its scientific rigor and validation process.
Science-Based vs Arbitrary Targets
- • SBTi: Targets aligned with climate science and 1.5°C pathway
- • Arbitrary targets: Not based on scientific assessment of required action
Independent Validation
- • SBTi: Independent validation against rigorous criteria
- • Self-declared targets: No independent assessment
Global Standard
- • SBTi: Global standard with consistent criteria across companies
- • Company-specific targets: Different methodologies and criteria
Scientific Rigor and Credibility
SBTi provides scientific rigor and credibility through its alignment with climate science and independent validation process, distinguishing it from other climate target approaches.
SBTi vs CSRD
SBTi and CSRD serve different but complementary purposes in corporate climate action.
Voluntary vs Mandatory
- • SBTi: Voluntary framework for setting climate targets
- • CSRD: Mandatory regulation for sustainability reporting
Target Setting vs Reporting
- • SBTi: Focuses on setting and validating climate targets
- • CSRD: Focuses on reporting sustainability information
Complementary Relationship
Companies can use SBTi to set science-based climate targets and CSRD to report on their climate performance. CSRD references science-based targets as best practice for climate-related disclosures.
Complementary Frameworks
SBTi and CSRD are complementary. SBTi provides the framework for setting ambitious climate targets, while CSRD provides the reporting requirements for disclosing climate performance.
Challenges & Limitations
Complexity
Setting science-based targets requires technical expertise and data collection, which can be challenging for companies without dedicated sustainability teams.
Scope 3 Data
Scope 3 emissions data is often difficult to collect and estimate, making it challenging for companies to set and achieve Scope 3 targets.
Implementation Costs
Achieving science-based targets requires significant investment in low-carbon technologies and processes, which can be costly for companies.
Validation Timeline
The validation process can take 30-45 days or longer, requiring companies to plan ahead and allocate resources for the process.
Preparation is Key
Despite challenges, setting science-based targets provides significant benefits. Early preparation and capacity building can help companies overcome implementation challenges.
Key Takeaways
SBTi enables companies to set science-based climate targets
Targets aligned with Paris Agreement 1.5°C goal
Covers near-term and net-zero targets
Independent validation process ensures credibility
Thousands of companies have committed to SBTi
SBTi reduces climate risk and enhances investor confidence
SBTi complements regulatory frameworks like CSRD
SBTi Provides the Framework for Science-Based Climate Action
SBTi enables companies to set emissions reduction targets aligned with climate science, ensuring that corporate climate action contributes to global climate goals.