Science-Based Targets (SBTs) and the Science-Based Target Initiative (SBTi) are becoming the gold standard for companies serious about addressing climate change. Backed by renowned entities such as CDP, UN Global Compact, WRI, and WWF, the SBTi provides a clear and credible pathway for businesses to set meaningful and actionable emissions reduction goals in line with the Paris Agreement.
This article offers a comprehensive overview of the SBTi, its significance, and how it is reshaping corporate sustainability. Dive in to understand its foundational role in today's business landscape and the steps your organisation can take to align with this global initiative.
What is the science-based target initiative (SBTi)?
The Science-Based Target Initiative (SBTi) is a collaboration between CDP, UN Global Compact, WRI, and WWF. The initiative defines and promotes best practices in emissions reductions and offers technical assistance to companies aiming to set science-based targets (SBTs). Furthermore, the SBTi oversees the SBTi Net-Zero Standard, a pioneering framework for corporate net-zero target establishment.
In plain language, the SBTi:
- Outlines and advocates optimal strategies for reducing emissions and achieving net-zero goals following the latest climate research.
- Offers methodologies and insights for businesses to establish reduction emissions targets.
- Features a group of specialists and scientists who offer unbiased evaluations and verification of science-based targets.
What is SBTi in sustainability?
In the realm of sustainability, the SBTi is a benchmark for corporate commitment to climate change mitigation. Through science-based target-setting, companies align their strategies with the goals of the Paris Climate Agreement, specifically limiting global warming to 1.5°C above pre-industrial levels.
What is the difference between net-zero and SBTi
While both net-zero and SBTs aim to curb greenhouse gas emissions, they have distinct definitions:
- Net-zero: Net-zero means cutting greenhouse gas emissions to as close to zero as possible, with any remaining emissions re-absorbed from the atmosphere by oceans and forests, for instance. Net-zero is reached when a business has eliminated all the carbon emissions it could and then compensated the remaining emissions with beyond value chain mitigation. The net-zero process starts with calculating emissions across Scope 1, 2, and 3, setting science-based targets, developing decarbonisation pathways until 2030, and gradually moving towards long-term carbon capture, storage, and sequestration for those emissions which cannot be reduced.
- SBTi: It's an initiative guiding companies in setting SBTs in line with the Paris Agreement's ambition. However, the SBTi also manages a framework (the SBTi Net-Zero Standard) that outlines how corporations can set net-zero targets.
What are science-based targets?
Science-Based Targets (SBTs) offer a concrete roadmap for corporations to minimise their greenhouse gas emissions. They are termed ‘science-based’ since they align with the climate science detailed in the 2015 Paris Climate Agreement, targeting global warming restrictions to 1.5°C above pre-industrial times.
In simpler terms, SBTs serve as:
- The bridge linking the Paris Climate Agreement to tangible measures that help control global warming.
- A way for organisations to transition from mere eco-friendly intentions to actual green actions.
- A primary channel for the corporate world to spearhead the efforts in reducing emissions.
How many companies have science-based targets?
More companies are continuously embracing SBTs. For up-to-date data, it's best to check out SBTi's "Companies Taking Action" section on their website, which showcases companies' progress divided by industry, location, and dedication level.
By the middle of 2023, 5,914 businesses have taken a pioneering step towards a sustainable future by adopting emission reduction targets with the guidance of the SBTi. By August 2023, the SBTi gave its seal of approval to 3,272 of these targets. Interestingly, the SBTi's 2021 review highlighted that companies representing a third of the world's market value are on board with this green initiative. In this endeavour, they've encompassed 1.5 billion tonnes of CO2 under SBTi's guidelines, leading to a significant cut of 53 million tonnes of CO2 emissions in 2021 alone.
In 2021, the SBTi rolled out its innovative Net-Zero Standard, equipping companies with the roadmap to aim for zero emissions. And there's exciting news for the finance world: SBTi is in the process of crafting a first-of-its-kind net-zero framework specifically for financial institutions, set to debut in 2024.
How to set science-based targets?
The SBTi differentiates SMEs from companies and financial institutions in the process to set science-based targets. SMEs follow a streamlined process, whereas companies have to follow a more thorough process including 5 steps.
For companies, the process to set emissions reduction targets is as follows:
- Declare your intent: Use the SBTi platform to submit a commitment letter. If you're an SME (fewer than 500 employees, excluding Financial and Oil & Gas sectors), you can skip to step 3.
- Join the movement: If aligned with net zero, you can automatically join the Race to Zero campaign.
- Recognition: Companies that commit are featured on the SBTi and "We Mean Business" websites.
- Timeframe: Post-commitment, you get 24 months to finalise and send your targets to SBTi. Otherwise, you will be removed from their website.
2. Develop your targets in line with the science-based criteria
- Craft your target: Define your emissions reduction goal using SBTi’s criteria.
- Use SBTi's tools: Start with the ‘Getting Started Guide’, dive deeper with the ‘SBTi Criteria’, and use the provided tools to fine-tune your target. Note: Some sectors have specific guidelines.
- Deadline: targets should be submitted within 24 months of your commitment.
3. Submit your targets for validation
- Validate your target: Submit your target to SBTi for thorough validation.
- How to submit: Use the appropriate submission form for your company type. Check SBTi's resources for a smooth submission.
- Feedback loop: SBTi's expert panel reviews your submission, validating it and providing detailed feedback if needed.
4. Communicate your targets and involve your stakeholders
- Go public: After SBTi approval, announce your target to stakeholders.
- Visibility: Your target will be listed on SBTi and partner websites a month post-approval. Ensure it’s public within six months, or revalidation is necessary.
- Guidance: A welcome pack helps guide your communication strategy.
5. Disclose your progress
- Track and report: Post-approval, disclose your emissions yearly and monitor target progression.
- Report outlets: Recommendations include CDP, annual and sustainability reports, and your website. For detailed guidance, consult SBTi's ‘Corporate Manual’.
What are the IPCC science-based targets?
While the SBTi outlines guidelines for companies, the Intergovernmental Panel on Climate Change (IPCC) provides the scientific foundations on which these targets are based. The IPCC assessments, especially the Special Report on 1.5°C, form the backbone for defining the temperature rise limits and offer pathways for emissions reductions, which in turn influence SBTs.
What is the difference between net-zero and science-based targets?
Net-zero targets focus on achieving a balance between emitted and offset carbon, while SBTs provide a structured approach for companies to reduce emissions, ensuring they are consistent with global efforts to mitigate climate change. SBTs might lead a company towards a net-zero future, but they're essentially milestones along the way, grounded in current climate science.
FAQs on SBTs and SBTi
With the increasing buzz around SBTs, businesses have questions – and lots of them. Let's delve into some common queries corporates might have about adopting SBTs and how businesses can address them.
What are science-based targets' objectives?
The objectives of SBTs are multi-fold:
- Connect corporate actions directly to the goals of the Paris Climate Agreement.
- Encourage companies to move beyond just intentions and adopt tangible measures to combat global warming.
- Spearhead corporate-sector-led emissions reductions, paving the way for a sustainable future.
What are science-based targets and how can my company use them?
SBTs are a method for your company to strategically cut down its greenhouse gas emissions. By assessing your emissions data, you'll establish benchmarks indicating the necessary emissions reductions within a set timeline. The SBTI delineates the standards for SBTs and prescribes how companies should decrease their emissions in adherence to the 2015 Paris Climate Agreement.
Should companies submit their targets to the science-based target initiative?
While SBTI offers a recognised framework, engaging with them is a strategic choice for businesses. The submission process is long, requiring dedicated resources and time. Those considering this route might benefit from seeking expert guidance to navigate the process efficiently.
What are SBTi target validation criteria?
Firms setting targets for the initial time should ideally use the latest available year's data as its reference point. However, if they have comprehensive data from an earlier year, it's valid for the review, provided the latest year's figures are also included.
In line with SBTi guidelines:
- Goals should span a period between 5 to 10 years from when they're presented to SBTi for review. The reference year for these goals shouldn't go back further than 2015.
- If you're presenting your goals for review in the initial six months of 2023, your aim should be to achieve them between 2027 and 2032. If presenting in the latter half of 2023, your goals should be set for achievement between 2028 and 2033.
- Your target shall cover scope 1, 2 and 3 emissions while being in line with the Paris Agreement
- Using methods provided by SBTi and guidance tailored to specific industries.
For those presenting their targets in 2023, they should ensure the most recent data included dates back to, at the latest, 2021.
What are intensity-based targets?
Instead of just focusing on absolute reduction targets that directly aim at reducing the total emission, intensity-based targets look at emissions to something specific, like the emissions for each product made. It's like comparing the fuel efficiency of cars by miles per gallon. These targets are good if they lead to fewer emissions. The SBTi supports these targets if they either reduce emissions or follow an approved industry guideline.
How do peak emission targets fit into the SBTi landscape?
Peak emission planning, although not a direct SBT strategy, allows firms to maintain current emission trends up to a specific year before initiating reductions. While it's a route some companies might explore, businesses eyeing SBTi submissions should be aware that peak emission targets aren't part of the SBTi submission guidelines.
Do SBTi guidelines vary based on business type or sector?
SBTi’s guidelines extensively cover requirements. They distinguish between SMEs and large corporations.
SMEs can use a more straightforward method, whereas large corporations follow a five-step process. The Sectoral Decarbonization Approach (SDA) caters to specific sector needs. Each sector has minimum ambition levels, and for Scopes 1 and 2, this means a 4.2% linear annual reduction, and for Scope 3, a 2.5% linear annual reduction. If Scope 3 emissions surpass 40% of a company's total emissions, the latest SBTi guidelines necessitate a Scope 3 target.
How can organisations gauge their commitments relative to their industry?
While organisations should tailor their goals based on individual circumstances, understanding industry benchmarks is important. Tools like SBTI’s ‘Companies Taking Action’ table can provide a holistic view, allowing organisations to assess and refine their commitments.
To sum up, Science-Based Targets and the SBTi are crucial in the corporate sustainability journey. They bridge the gap between global climate aspirations and tangible corporate action, ensuring businesses not only contribute to a greener future but thrive in it.
To learn more about the corporate net-zero journey and how to decarbonise your business, book a call with one of our climate experts today.