What is the Science-Based Target Initiative?

The Science-Based Targets Initiative (SBTi) is a critical framework designed to guide businesses in reducing their greenhouse gas (GHG) emissions in line with what climate science deems necessary to prevent the most severe impacts of climate change. In 2018, the Intergovernmental Panel on Climate Change (IPCC) issued a stern warning that global warming must be limited to 1.5 degrees Celsius above pre-industrial levels. To meet this challenge, businesses must play a pivotal role in transitioning to a low-carbon economy by setting and achieving science-based targets.

What is SBTi?

Science-based targets (SBTs) provide a clear and measurable path for businesses to reduce their GHG emissions, aligning with global climate goals. The SBTi offers companies the tools and support needed to develop these targets, ensuring that their emissions reduction strategies are both scientifically sound and competitive in a net-zero economy. SBTi collaborates with the Greenhouse Gas Protocol and the CDP to help companies accurately measure, report, and manage their carbon footprints, ultimately setting the stage for effective decarbonization efforts.

Why SBTi is Crucial for Businesses?

With the growing emphasis on environmental sustainability and the need to reduce corporate carbon footprints, companies worldwide are adopting science-based targets as a key strategy for carbon management. Unlike traditional approaches that may rely on carbon offsets, SBTs focus on substantial emissions reductions, driving businesses to take meaningful action against climate change. This shift is essential to avoid the worst effects of global warming and ensure that businesses are not merely engaging in greenwashing but are committed to genuine climate action.

The Ambitious and Rigorous Standards of SBTi

The Science-Based Targets Initiative is recognized as the gold standard for setting corporate carbon reduction goals. It provides strict criteria that companies must meet to ensure their targets are truly science-based. This includes evaluating all sources of emissions, setting short-term reduction goals, and avoiding the use of carbon offsets. Currently, nearly 1,000 companies, responsible for over 1 billion metric tons of CO2 emissions, have committed to setting SBTs, representing about 2% of global emissions.

What is the Aim of the SBTi?

The primary objective of the SBTi is to encourage businesses to take immediate and meaningful action on climate change by setting science-based targets. By doing so, companies can not only combat global warming but also gain a competitive edge in the transition to a zero-carbon economy. The ultimate goal is to make science-based target setting the norm across industries, leading to a thriving global economy that operates in harmony with the environment.

Who Can Join the SBTi?

The SBTi is open to companies of all sizes and sectors, encouraging them to commit to science-based targets. Recognizing the unique challenges faced by different industries, the SBTi is developing sector-specific pathways to guide businesses in high-emitting industries, which are critical to the global transition to a zero-carbon economy. However, the SBTi currently does not evaluate targets for cities, local governments, public sector entities, educational institutions, or non-profit organisations.

What Constitutes a Science-Based Target?

At the core of the SBTi framework is a stringent set of criteria that define what qualifies as a science-based target. These criteria are comprehensive, industry-specific, and built on several key principles:

• Temperature Goal: Companies must start by setting a temperature goal based on the Paris Agreement, which aims to keep global temperature rise "well below" 2 degrees Celsius. The SBTi encourages businesses to adopt the more ambitious 1.5-degree limit, which is considered the "red line" for preventing catastrophic climate change.
• Immediate Action: Targets must be set for the near term, typically within 5-15 years, ensuring that companies take prompt action to reduce emissions. The SBTi does not credit long-term goals that delay action and may be left to future leadership.
• Real Reductions, No Offsets: The SBTi only recognizes actual reductions in carbon footprints, excluding carbon offsets or avoided emissions from its criteria.
• Comprehensive Coverage: Science-based targets must account for all significant sources of a company’s carbon emissions. This includes 95% of Scope 1 and 2 emissions, as well as Scope 3 emissions if they constitute 40% or more of the total. Even if a company’s Scope 3 emissions are below 40%, they must still be monitored, reported, and managed.

How Oren Can Help?

At Oren, we assist businesses in navigating the complexities of setting and achieving science-based targets. Whether you’re seeking to understand SBTi’s requirements or looking to develop a robust decarbonization strategy, our expertise in ESG reporting and sustainability can guide you through the process. Contact us today to learn more about how we can support your organisation in contributing to a sustainable future.