Key takeaways from the SBTi Monitoring Report 2022

SBTi recently published its fourth report titled "SBTi Monitoring Report 2022 - Looking back at 2022 and moving forward to 2023 and beyond". This comprehensive report delves into the worldwide advancements of science-based targets and reveals a remarkable ongoing surge in the adoption of science-targets by companies and financial institutions. This trend persists despite the escalating challenges prevalent on the global stage.?

Greenstone has curated an article that captures the key insights from this report.?

About SBTi?

Established in 2014, The Science Based Targets Initiative (SBTi) is a collaboration among organisations including CDP, United Nations Global Compact, World Resources Institute (WRI), World Wide Fund for Nature (WWF), and the We Mean Business Coalition. It assists global companies and financial institutions in setting science-based GHG emissions reduction targets, striving for ambitious corporate climate action. The SBTi mission involves aligning businesses with climate science, cutting emissions, and contributing to the goal of limiting global warming to 1.5°C.?

SBTi prioritises emission reduction, offering sector-specific guidance for high-emission industries and facilitating action in areas like maritime and aviation. Their approach aims to make ambitious climate action mainstream across sectors, urging the necessary transformations for a net-zero world. This includes collaboration with large companies and their supply chains. SBTi believes this multi-pronged approach will effectively accelerate private sector emissions reduction in harmony with the Paris Agreement.?

About the report?

"SBTi Monitoring Report 2022 - Looking back at 2022 and moving forward to 2023 and beyond" presents the major developments in the adoption of science-based targets by companies and financial institutions in the year 2022, along with updates and publications from the SBTi over the same period.??

The data analysed in this report is up to date as of December 31, 2022. To ensure inclusiveness, information published after this date, as recent as June 2023, has been incorporated. These additional sources include company sustainability reports, corporate publications, and relevant non-financial reports accessible at the time of review.?

Key takeaways?

1. The adoption of science-based targets surged in 2022, surpassing the combined figures of the previous seven years. A total of 1,097 companies had validated targets published, compared to 1,082 in the preceding seven years. With 587 targets established in 2021, there was an 87% year-on-year increase in validated targets. Commitments to set science-based targets also rose, with 1,287 companies committing to this within 24 months as per the SBTi's Commitment Compliance Policy. By the close of 2022, 2,079 companies had validated science-based targets, and an additional 2,151 companies committed to setting targets.?

2. Nearly all SBTi companies with targets are addressing scope 3 emissions. In 2022, 406 companies that set targets also included scope 3 targets. This raised the overall count of companies with science-based targets covering scope 3 (excluding SMEs and financial institutions) to 1,134, accounting for 96% by the end of 2022. Among companies that introduced scope 3 targets in 2022, 63 established supplier engagement targets, encouraging suppliers in their value chains to set their own science-based targets. Consequently, the total number of companies with supplier and customer engagement targets reached 189, equivalent to 16% of all companies with science-based targets by the conclusion of 2022.?

3. Companies had their targets validated against the SBTi's Corporate Net-Zero Standard for the first full year in 2022. The Net-Zero Standard, introduced in October 2021, represents SBTi's most ambitious decarbonisation level, necessitating both near and long-term science-based targets to achieve complete emissions reduction by 2050. Of the 130 organisations that established net-zero targets in 2022, 78 (60%) were categorised as companies, with the remaining 40% being SMEs. Additionally, 889 companies committed to presenting net-zero targets. These net-zero objectives constituted 12% of all science-based targets set in 2022.?

4. In 2022, the largest count of companies establishing targets was in Japan (201), trailed by the UK (181) and the US (109). Asia exhibited the most substantial relative expansion in companies setting targets, while Africa and Latin America also observed notable growth.?

5. The cumulative scope 1 and 2 emissions from companies adopting science-based targets reached 422 million tonnes of CO2e by the end of 2022. This marked a significant upsurge of 27% compared to 2021 and exceeded the total greenhouse gas emissions of the UK for the same year. The combined scope 1 and 2 emissions addressed through science-based targets escalated nearly 15-fold from 145 million to two billion tonnes of CO2e between 2015 and 2022.?

2022 in numbers???

1.5°C - As of July 2022, the SBTi has only accepted new target submissions which are aligned with 1.5°C.?

34% - By the end of 2022, companies with science-based targets or which had committed to set targets represented over a third (34%) of the global economy by market capitalisation.?

88% - By the end of 2022, 88% of companies listed on France’s CAC Index had set or committed to set targets, compared to 70% on Germany’s DAX Index, 69% of companies on the UK’s FTSE, 43% on Italy’s MIB, 42% of all S&P companies and 40% of companies listed on Japan’s NIKKEI Index.?

58% - There was significant growth in the number of small and medium-sized enterprises (SMEs) setting targets, with SMEs representing the majority (58%) of organisations setting targets in 2022.?

60% - The materials industry saw the highest growth in the number of companies setting targets. 60% of companies setting targets came from the service, manufacturing and infrastructure industries. The three lowest represented industries – power generation, biotech, healthcare and pharma, and hospitality – saw little change.?

79% - By the end of 2022, 79% of all companies with science-based targets were 1.5°C-aligned for scopes 1 and 2.??

76m - As of December 2022, total committed annual emissions reductions across all approved science-based targets were 76 million tonnes of CO2e, equivalent to eliminating Switzerland’s 2022 annual CO2 emissions more than twice over.?

76% - More than three quarters (76%) of companies with science-based targets publicly reported progress against their targets in some form. More than half (53%) of companies fully reported progress on all their near-term and long-term targets in 2022, while around a quarter (23%) reported on at least one target. Half the financial institutions with science-based targets reported publicly on progress of their targets via CDP.?

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Sources:

https://sciencebasedtargets.org/resources/files/SBTiMonitoringReport2022.pdf

https://sciencebasedtargets.org/reports/sbti-monitoring-report-2022??

For historical context and further information, past documents and reports can be accessed on the SBTi website.?