The Science-Based Targets initiative (SBTi) is a collaborative effort between CDP, the United Nations Global Compact, World Resources Institute (WRI), and the World Wide Fund for Nature (WWF) that aims to empower organizations in the private sector to set science-based emissions reduction targets. By providing companies with a clearly-defined path aligned with the goals of the Paris Agreement, science-based targets enable businesses to contribute to the fight against climate change. With over 4,000 businesses already engaged in the initiative, the SBTi plays a critical role in accelerating climate action worldwide.
What are Science-Based Targets?
Science-based targets offer companies a well-defined pathway to reduce their greenhouse gas (GHG) emissions in line with the objectives outlined in the Paris Agreement. These targets are considered “science-based” when they align with the latest climate science and the goal of limiting global warming to well-below 2°C above pre-industrial levels, while striving to limit warming to 1.5°C. By adopting science-based targets, companies contribute to preventing the most severe impacts of climate change and ensure the sustainability of their future growth.
The Role of Science-Based Targets Initiative (SBTi)
The Science-Based Targets initiative (SBTi) assumes several key functions to drive climate action in the private sector:
- Defining Best Practices: The SBTi establishes and promotes best practices for emissions reductions and net-zero targets, ensuring they are aligned with the latest climate science.
- Providing Technical Assistance: SBTi offers technical assistance and expert resources to companies that aim to set science-based targets, assisting them in developing effective strategies.
- Independent Assessment and Validation: SBTi assembles a team of experts to independently assess and validate the targets set by companies, ensuring their adherence to science-based criteria.
- Business Ambition for 1.5°C: SBTi led the Business Ambition for 1.5°C campaign, a global call to action urging companies to set net-zero science-based targets aligned with a 1.5°C future. This mobilized companies to embrace ambitious climate goals.
- Accelerating Action: Over 2,000 organizations worldwide are actively engaged with SBTi, leading the transition to a net-zero economy through emissions reduction targets grounded in climate science.
The Impact of Science-Based Targets Initiative (SBTi)
The transformation towards a net-zero economy is not only achievable but has already begun gaining momentum. In 2021, the Science-Based Targets initiative experienced exponential growth, witnessing a doubling of the number of companies setting or committing to set targets. Moreover, the validation rate for new targets tripled during the same period.
By the end of 2022, over 4,000 companies, representing more than a third of the global economy’s market capitalization, were actively engaged in setting targets through the SBTi. While these companies lead the way, it is essential for every organization, across all sectors, to join this crucial endeavor, as the future of our planet depends on collective action.
A significant milestone for SBTi was the introduction of the SBTi Net-Zero Standard ahead of the 26th UN Climate Change Conference of the Parties (COP26). This groundbreaking framework provides companies with guidelines for setting net-zero targets that align with climate science and 1.5°C pathways. The Standard emphasizes the need for rapid and substantial emission reductions through both short-term and long-term science-based targets.
Furthermore, science-based target setting has become an integral part of yearly reporting practices for companies and data infrastructure for institutional investors. Integration into the CDP questionnaire and scoring process has ensured that science-based targets are deeply embedded in corporate reporting practices.
Setting a Science-Based Target: A Five-Step Process
To help companies embark on their science-based target-setting journey, SBTi provides a comprehensive five-step process:
- Commit: Companies are encouraged to submit a letter expressing their intent to set a science-based target. Small and Medium-Sized Enterprises (SMEs) have a streamlined commitment process. Once committed, companies are recognized as “Committed” on the SBTi and partner websites.
- Develop: Companies work on developing an emissions reduction target that aligns with SBTi’s criteria. Online resources, including the SBTi Getting Started Guide, Criteria and Recommendations, Target Validation Protocol, and sector-specific guidance, offer comprehensive guidance throughout this process. Companies have 24 months from the commitment stage to submit their targets.
- Submit: The developed target is submitted to SBTi for official validation. Depending on the target type, companies complete the relevant submission form, including corporate near-term target submission forms, net-zero target submission forms, and others. Financial institutions and SMEs also have specific submission processes. Additionally, companies may provide updates or amendments to their targets as needed.
- Communicate: Once a target is approved, companies are encouraged to announce it and inform their stakeholders. The approved targets are published on the SBTi and partner websites, providing recognition and visibility. Targets must be made public within six months of approval.
- Disclose: Companies should report their company-wide emissions and progress toward their targets on an annual basis. Reporting options include disclosure through platforms like CDP, annual reports, sustainability reports, and company websites. Consistent monitoring and reporting ensure transparency and accountability in achieving the science-based targets.
Streamlined Route for Small and Medium-sized Enterprises (SMEs) in SBTi
Companies from all sectors and of all sizes to join the movement and commit to setting science-based targets. The Science-Based Targets initiative (SBTi) offers a streamlined route specifically designed for small and medium-sized enterprises (SMEs) to set science-based targets for their greenhouse gas emissions. SMEs, defined as independent companies with fewer than 500 employees, can take advantage of this expedited process to bypass certain stages of target setting and validation.
Under the streamlined route, SMEs can immediately set science-based targets for their scope 1 and 2 emissions by choosing from predefined target options provided by SBTi. Unlike larger companies, SMEs are not required to set targets for their scope 3 emissions but must commit to measuring and reducing these emissions.
The introduction of this option for SMEs recognizes that smaller companies often face resource constraints and may struggle to set and monitor scope 3 targets. SBTi’s approach aims to strike a balance by enabling SMEs to consider emissions across their value chains without imposing excessive burdens.
To participate in the streamlined route, SMEs must complete a comprehensive greenhouse gas emissions inventory following the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard and Scope 2 Guidance, similar to larger companies. They are also required to publicly report their scope 1 and 2 emissions inventory and progress towards their targets on an annual basis.
In 2022, the SBTi introduced a streamlined route for net-zero target setting specifically tailored for SMEs. This route includes commitments to set and reduce scope 3 emissions targets.
Targets submitted through the streamlined route for SMEs undergo a due diligence review and payment process but are automatically approved and posted on the SBTi website. SMEs receive a communications welcome pack and are authorized to use the SBTi logo on their websites and in company communications, showcasing their commitment to science-based target setting.
SBTi’s services and pricing structure (April 2023)
I. Near-term science-based target submission – $9,500
- Robust technical review conducted by SBTi experts
- Screening of necessary information
- Review against SBTi criteria
- Comprehensive target validation report with recommendations
- Official certificate for approved targets
- Feedback conversations with a technical expert (upon request)
- Results delivered within 30 business days
II. Target update service – $4,750
- Streamlined process for aligning or updating targets
- Comprehensive target review
- Recommendations in target validation report
- Official certificate for approved targets
- Results delivered within 30 business days
III. Net-zero target submission – $9,500
- Requires prior setting of near-term science-based targets
- Robust technical review of long-term targets
- Screening of necessary information
- Review against SBTi Net-Zero criteria
- Deliverables with recommendations
- Official certificate for approved targets
- Feedback conversations with a technical expert (upon request)
- Results delivered within 60 business days
IV. Near-term science-based target update + Net-zero target submission – Package Rate – $12,750
- Combined service for updating near-term targets and submitting net-zero targets
- Increased ambition aligned with the Net-Zero Standard
- Results delivered within 60 business days
V. Near-term science-based target submission + Net-zero target submission – Package Rate – $14,500
- Initial submission of new near-term and net-zero targets together
- Robust technical review for both targets
- Results delivered within 60 business days
VI. FLAG Target submission – $7,500
- Add-on service for submitting FLAG targets (Forests, Land, and Agriculture)
- Requires another target service (e.g., near-term submission)
- Additional cost to reflect review complexity
- Results delivered within 60 business days
VII. Financial institution target submission – $14,500
- Specifically for robust review of targets by financial institutions
- Results delivered within 60 business days
VIII. Near-term science-based target submission – SMEs – $1,000
- Streamlined route for small and medium-sized enterprises (SMEs)
- Immediate target setting for scope 1 and 2 emissions
- No scope 3 target requirement
- Expedited approval and posting to SBTi website
IX. Net-zero target submission – SMEs – $1,000
- Streamlined route for SMEs to set net-zero targets
- Predefined target options for immediate setting
- Expedited approval and posting to SBTi website
X. Fee exemption – All services excluding Financial Institutions – $0
- Option for waiver of target submission fee for eligible companies
- Based on yearly gross revenue and country classification
- Encouraged for companies with limited financial viability
- Not applicable for Financial Institution validations