The Role of Science-Based Targets (SBTis) in Driving Climate Action

As the impacts of climate change intensify, businesses face increasing pressure to address their carbon footprints and contribute to global climate goals. Among the tools gaining traction, the Science-Based Targets initiative (SBTi) stands out as a gold standard for corporate climate action. With its focus on aligning business strategies with the latest climate science, SBTi empowers organisations to set meaningful and measurable targets that are critical to limiting global warming to 1.5°C.

What is SBTi?

The Science-Based Targets initiative (SBTi) is a global collaboration between CDP, the United Nations Global Compact (UNGC), World Resources Institute (WRI), and the World Wide Fund for Nature (WWF). Launched in 2015, it provides a framework for companies to set greenhouse gas (GHG) emissions reduction targets that are consistent with the Paris Agreement’s goals of limiting global temperature rise to below 2°C and pursuing efforts to limit it to 1.5°C.

Unlike generic sustainability commitments, SBTi ensures that targets are rooted in scientific evidence. Companies setting science-based targets must align their emissions reductions with decarbonisation pathways that meet the climate urgency identified by the Intergovernmental Panel on Climate Change (IPCC).?

Why are Science-Based Targets Important?

1. ??????? Aligning with Global Climate Goals: SBTi bridges the gap between corporate ambition and global climate science, ensuring businesses contribute effectively to international climate targets.

2. ??????? Demonstrating Accountability: By adopting science-based targets, companies signal to stakeholders—including investors, customers, and regulators—that they are committed to measurable climate action.

3. ??????? Driving Innovation: Setting ambitious reduction targets pushes organisations to rethink their processes, adopt energy-efficient technologies, and explore innovative business models.

4. ??????? Reducing Risk: Companies face growing scrutiny from investors, governments, and consumers. Aligning with SBTi reduces reputational, regulatory, and financial risks linked to climate inaction.

Types of Science-Based Targets

?SBTi classifies targets into two primary categories:?

1. ??????? Near-Term Targets: Focused on reducing GHG emissions over the next 5-10 years, these targets ensure immediate climate action.

2. ??????? Net-Zero Targets: Companies aim to reach a balance between emissions produced and emissions removed by mid-century, addressing both short- and long-term decarbonisation.

Targets must cover Scope 1 (direct emissions), Scope 2 (indirect emissions from energy use), and Scope 3 (value chain emissions), ensuring a comprehensive approach to carbon management.

?Steps to Set and Achieve Science-Based Targets

1. ??????? Commit: A company must commit to setting a science-based target by submitting a commitment letter to the SBTi.

2. ??????? Develop Targets: Using SBTi’s target-setting criteria and tools, businesses calculate their GHG reduction targets in alignment with their emissions profiles and sector-specific pathways.

3. ??????? Submit for Validation: SBTi validates the targets to ensure they meet rigorous scientific standards.

4. ??????? Communicate: Approved targets are publicly announced, showcasing the company’s climate ambition.

5. ??????? Implement and Monitor: Companies integrate the targets into their business strategies, monitor progress, and regularly report on emissions performance.

?SBTi’s Net-Zero Standard

In 2021, SBTi introduced the world’s first science-based Net-Zero Standard, providing companies with a clear pathway to achieve net-zero emissions. This standard goes beyond offsets, focusing on deep emissions cuts across the entire value chain. Companies must reduce emissions by at least 90% before relying on carbon removals to neutralise the remaining emissions.

Challenges in Adopting Science-Based Targets

?1.???????? Data Complexity: Calculating Scope 3 emissions, which often account for the majority of a company’s carbon footprint, is complex due to the need for extensive supply chain data.

2. ??????? Cost of Implementation: Transitioning to low-carbon technologies and processes can be resource-intensive, particularly for small and medium-sized enterprises (SMEs).

3. ??????? Sectoral Variations: Decarbonisation pathways vary by industry, and aligning specific business models with SBTi criteria can be challenging for some sectors.

4. ??????? Long-Term Commitment: Achieving ambitious targets requires sustained effort, leadership commitment, and organisational alignment over decades.

?Benefits of Setting Science-Based Targets

?Despite the challenges, the benefits of adopting SBTi far outweigh the hurdles:

·?????? Enhanced Reputation: Companies with validated science-based targets gain credibility and goodwill among stakeholders.

·?????? Access to Capital: Many investors now prioritise ESG-aligned businesses, and science-based targets demonstrate a robust commitment to environmental sustainability.

·?????? Operational Efficiency: Emissions reductions often lead to cost savings through energy efficiency and streamlined operations.

·?????? Regulatory Preparedness: As governments introduce stricter climate policies, companies with science-based targets are better positioned to meet regulatory requirements.

Case Study: Leadership in Action

Unilever is a leading example of a company leveraging SBTi to advance its climate agenda. The company has set ambitious science-based targets to achieve net-zero emissions by 2039, including transitioning to 100% renewable energy and cutting emissions across its supply chain. By aligning its strategy with SBTi, Unilever not only mitigates climate risks but also strengthens its position as a sustainability leader.

The Role of SMEs in Science-Based Targets

While large corporations dominate headlines, SMEs also play a vital role in climate action. Recognising the unique challenges faced by smaller businesses, SBTi has introduced streamlined processes to help SMEs set simplified near-term targets. By adopting these targets, SMEs can enhance supply chain collaboration, meet customer expectations, and remain competitive in an increasingly sustainability-focused market.

Looking Ahead: The Future of Science-Based Targets

?As climate science evolves, SBTi continues to refine its methodologies and expand its reach. The initiative’s growing influence reflects the critical need for corporate accountability in tackling the climate crisis. With over 5,000 companies committed to SBTi as of 2023, the momentum for science-based climate action is undeniable.

?For businesses of all sizes, the message is clear: aligning with SBTi is no longer optional but essential for long-term success in a rapidly changing world. By setting science-based targets, companies demonstrate leadership, build resilience, and contribute meaningfully to the global fight against climate change.

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