Science-Based Targets (SBTi)

Overview

The Science Based Targets initiative (SBTi) is the gold standard for corporate climate action. It enables companies to set emission reduction targets in line with the latest climate science, specifically the Paris Agreement's goal to limit global warming to 1.5°C above pre-industrial levels.

What Are Science-Based Targets?

Science-based targets are emission reduction goals that are:

1. Scientifically sound: Based on climate pathways that limit warming
2. Quantified: Specific, measurable emission reductions
3. Time-bound: Clear target years
4. Validated: Reviewed and approved by SBTi

Why Science Matters

Without science-based targets, companies might set goals that:

• Sound ambitious but don't actually help meet climate goals
• Allow warming above 1.5°C or 2°C thresholds
• Are out of step with global emission pathways

SBTi Framework

Target Types

Absolute Targets

Reduce total emissions by a specific percentage:

• 1.5°C: ~90% reduction by 2050 from baseline
• Well-below 2°C: ~70% reduction by 2050

Intensity Targets (Scope 3 only)

Reduce emissions per unit of economic activity:

• Revenue-based: emissions per $M revenue
• Physical intensity: emissions per unit produced

Scope Coverage

Note: Companies with Scope 3 >40% of total must include it.

Validation Process

Step 1: Commit

Submit a commitment letter to SBTi stating intent to set a target.

Step 2: Develop

Create target using SBTi tools and methodologies:

• Download sectoral decarbonization approach (SDA) tools
• Calculate baseline emissions
• Determine reduction pathway

Step 3: Submit

Submit target for validation with:

• Completed target-setting form
• Letter of commitment
• Supporting documentation

Step 4: Validate

SBTi technical team reviews:

• Scientific validity
• Methodological compliance
• Completeness of Scope 3

Step 5: Communicate

Upon approval:

• Announce target publicly
• Use SBTi logo (per guidelines)
• Report annually on progress

Sectoral Decarbonization Approach (SDA)

The SDA provides sector-specific pathways:

Sectors Covered

• Power generation
• Oil and gas
• Transport (multiple modes)
• Buildings
• Industry (steel, cement, chemicals, etc.)
• Retail
• Information and communication technology
• Financial services

How SDA Works

1. Select your sector
2. Enter baseline emissions
3. Choose scenario (1.5°C or well-below 2°C)
4. Get target pathway curve
5. Plot your target against the curve

Practical Guidance

Getting Started

1. Measure emissions: Complete Scope 1, 2, 3 inventory
2. Engage stakeholders: Get leadership buy-in
3. Use SBTi tools: Download SDA sector tools
4. Set ambitious but realistic targets: Push for 1.5°C alignment
5. Submit for validation: Begin formal process

Common Mistakes

• Underestimating Scope 3 emissions
• Setting targets too far in the future
• Not accounting for growth
• Ignoring Scope 2 (use market-based + location-based)

Key Takeaways

• SBTi provides the gold standard for credible climate targets
• 1.5°C alignment is the most ambitious and recommended pathway
• Comprehensive Scope 1, 2, and 3 coverage is essential
• Validation builds credibility with stakeholders
• Annual reporting maintains transparency
• Science-based targets are increasingly expected by investors

References

• GHG Protocol · ICMA Green Bond Principles · SBTi · IPCC — climate finance frameworks