SBTi

The Science Based Targets initiative (SBTi) enables companies to set greenhouse gas emissions reduction targets consistent with limiting global warming to 1.5°C above pre-industrial levels. Over 7,000 companies have committed to or set science-based targets as of 2025.

Framework Overview

Target Validation Criteria

SBTi validates corporate emissions reduction targets against climate science. Targets must meet specific criteria:

Near-term Targets (5-10 years):

• Scope 1+2: Minimum 42% absolute reduction by 2030 (from base year) for 1.5°C pathway
• Scope 3: Required if Scope 3 emissions >40% of total; minimum 25% reduction or 2.5% annual linear reduction

Long-term Targets (2050):

• Net-zero: Minimum 90% absolute reduction in Scope 1, 2, and 3 emissions by 2050
• Residual emissions: <10% can be neutralized through carbon removal

Sector-Specific Pathways

SBTi provides tailored guidance for high-impact sectors:

• Power generation — Emissions intensity targets
• Oil & gas — Production and product use emissions
• Aviation — Efficiency improvements + sustainable aviation fuel
• Financial institutions — Portfolio emissions (financed, facilitated, insured)
• Forest, land, and agriculture (FLAG) — Land-use emissions and removals

Net-Zero Standard

The SBTi Net-Zero Standard (2021) defines corporate net-zero as:

1. Reduce value chain emissions by 90-95% (Scope 1+2+3)
2. Neutralize residual emissions through carbon removal (not offsets)
3. Beyond value chain mitigation — Finance climate action beyond the value chain

Why SBTi Matters

Investor Expectations

Major investors including BlackRock, Vanguard, and State Street expect portfolio companies to set science-based targets. CDP awards higher scores to companies with validated SBTi targets.

Regulatory Alignment

SBTi targets demonstrate compliance with emerging climate regulations:

• CSRD/ESRS E1 — Transition plan requirements
• UK TPT — Transition Plan Taskforce expectations
• California SB 253 — Climate Corporate Data Accountability Act

Credibility

SBTi validation provides third-party verification that targets are ambitious enough to limit warming to 1.5°C, differentiating science-based targets from aspirational commitments.

Primary Source Documents

From ESG Library

• Climate Change Reporting Made Simple — SBTi target setting with sector examples

View all books →

Part of ESG Hub | Curated by Ascent Partners Foundation

What are Science-Based Targets?

Science-based targets (SBTs) are emissions reduction targets aligned with the level of decarbonization required to keep global temperature increase below 1.5°C or 2°C compared to pre-industrial temperatures, as outlined by the Intergovernmental Panel on Climate Change (IPCC).

Key Criteria:

• Aligned with climate science (IPCC pathways)
• Cover company-wide Scope 1 and 2 emissions
• Include Scope 3 if >40% of total emissions
• Set for near-term (5-10 years) and long-term (2050 net-zero)
• Validated by Science Based Targets initiative (SBTi)

SBTi Target Validation Process

Step 1: Commit
Submit a commitment letter to SBTi pledging to set a science-based target within 24 months.

Step 2: Develop Target
Calculate baseline emissions (Scope 1, 2, 3), select target year (5-10 years), choose reduction pathway (1.5°C or 2°C), set reduction percentage.

Step 3: Submit for Validation
Submit target to SBTi for validation ($9,500 fee for large companies, reduced fees for SMEs).

Step 4: Validation Review
SBTi reviews target against criteria, provides feedback, may require revisions.

Step 5: Announce Target
Once validated, publicly announce target and begin implementation.

Step 6: Report Progress
Disclose annual emissions and progress toward target through CDP or sustainability reports.

SBTi Target Ambition Levels

1.5°C Pathway (most ambitious)

• Scope 1+2: Minimum 4.2% absolute reduction per year, or 2.5% per year intensity reduction
• Scope 3: Minimum 2.5% absolute reduction per year
• Aligned with Paris Agreement's most ambitious goal

Well-Below 2°C Pathway

• Scope 1+2: Minimum 2.5% absolute reduction per year
• Scope 3: Ambition equivalent to Scope 1+2
• Aligned with Paris Agreement's lower ambition

2°C Pathway (no longer accepted for new targets as of 2022)

• SBTi now requires all new targets to be well-below 2°C or 1.5°C

Net-Zero Standard

SBTi's Net-Zero Standard (launched 2021) provides criteria for corporate net-zero targets:

Near-Term Targets (5-10 years)
Minimum 4.2% annual absolute reduction for Scope 1+2, 2.5% for Scope 3.

Long-Term Targets (by 2050)
Reduce Scope 1, 2, and 3 emissions by at least 90% from base year.

Neutralization
Neutralize residual emissions (<10%) through carbon removals (not offsets). Only permanent removals (e.g., direct air capture, enhanced weathering) count toward neutralization.

Beyond Value Chain Mitigation (BVCM)
Companies may invest in climate mitigation beyond their value chain (e.g., nature-based solutions, renewable energy projects), but these do not count toward net-zero target achievement.

Sector-Specific Guidance

SBTi has developed sector-specific guidance for high-emitting industries:

Financial Institutions — Portfolio emissions targets (financed emissions)
Oil & Gas — Upstream and downstream emissions, production-based targets
Aviation — Passenger-km intensity targets, sustainable aviation fuel
Maritime — Cargo-ton-km intensity targets, fleet efficiency
Cement — Clinker substitution, alternative fuels, carbon capture
Steel — Scrap-based production, hydrogen-based direct reduction
Buildings — Operational and embodied carbon, energy efficiency
Forest, Land & Agriculture (FLAG) — Land-based emissions and removals

SBTi Adoption

Global Participation: Over 7,000 companies have committed to or set science-based targets as of 2024.

Geographic Distribution:

• Europe: 45% of companies
• North America: 25%
• Asia-Pacific: 20%
• Latin America: 7%
• Africa & Middle East: 3%

Sector Leaders:

• Technology: 18% of SBTi companies
• Services: 15%
• Manufacturing: 14%
• Retail: 10%
• Financial Services: 9%