In a world where sustainability has become a priority, the Science Based Targets initiative (SBTi) emerges as a guide for companies aiming to align their greenhouse gas (GHG) emission reduction targets with climate science. GHG emissions have significantly increased over recent years, and this troubling trend will continue unless organizations and governments actively work to reduce them.

Discover how the SBTi not only promotes environmental responsibility but also drives innovation and competitiveness in the global market. Explore how your company can become a leader in transitioning to a low-carbon economy, contributing to a more sustainable and prosperous future for all.

What is the SBTi?

The Science Based Targets initiative (SBTi) is a collaboration between the CDP (Carbon Disclosure Project), the UN Global Compact, the World Resources Institute (WRI), and the WWF (World Wide Fund for Nature). This initiative was established to mobilize the business sector to take urgent action against climate change by encouraging companies to set greenhouse gas (GHG) emission reduction targets based on climate science.

Importance of the SBTi in a Global Context

Additionally, the SBTi encourages transparency and accountability, as the initiative reviews and approves the targets set by companies, providing credibility and trust to stakeholders. Adopting scientific targets also stimulates innovation and operational efficiency, contributing to a low-carbon economy and long-term sustainability.

What is a SBT?

A Science Based Target (SBT) is a GHG emission reduction target aligned with what climate science indicates is necessary to limit global warming according to the goals of the Paris Agreement. To be considered a science-based target, it must be submitted and validated by the SBTi, ensuring that it is ambitious and consistent with the emission reduction pathways established by scientists.

These targets are calculated based on robust methodologies, considering factors such as the company’s sector, current emissions, and future projections. Setting science-based targets involves a detailed analysis of the company’s emissions, including its direct operations (Scope 1), energy consumption (Scope 2), and other indirect emissions along the value chain (Scope 3). Companies that set SBTs commit to reducing their emissions according to specific decarbonization trajectories, which are validated and monitored by the SBTi to ensure consistency and ambition.

What is a Net Zero Target?

A Net Zero target refers to a company’s commitment to reducing its GHG emissions to the lowest possible level and subsequently offsetting any residual emissions through carbon removal practices such as reforestation, carbon capture and storage, or other offset technologies. The ultimate goal is to achieve a zero-emission balance, where total GHG emissions are equal to the amount removed from the atmosphere.

For a Net Zero target to be considered robust and reliable, it must be science-based, ensuring that emission reductions align with the levels needed to limit global warming to 1.5°C. The SBTi provides guidance and specific criteria for companies to define and achieve their Net Zero targets, promoting a fair and sustainable transition to a low-carbon economy.

With the increasing urgency of the climate crisis, setting and implementing Net Zero targets are vital to protect our planet and ensure a sustainable future for generations to come.

Objectives and Benefits of the SBTi

The Science Based Targets initiative (SBTi) aims to mobilize the business sector to adopt GHG emission reduction targets consistent with what climate science indicates is necessary to avoid the worst impacts of climate change. The SBTi provides companies with a clear and rigorous framework to set and achieve these targets, aligning their actions with the goals of the Paris Agreement.

Objectives of the SBTi

The Science Based Targets initiative’s primary mission is to mobilize the business sector to adopt ambitious, science-based climate targets aligned with the goals of the Paris Agreement. The main objectives of the SBTi include:

• Defining and Promoting Best Practices: Establishing and disseminating best practices for setting science-based climate targets. The SBTi offers technical assistance and resources to ensure that companies’ GHG emission reduction targets are ambitious and aligned with the latest scientific advancements and global climate mitigation goals.
• Evaluating and Validating Targets: Conducting independent evaluations of corporate emission reduction targets to assess their consistency with the decarbonization trajectories needed to limit global warming to 1.5°C. The SBTi officially validates these targets, providing credibility and transparency to corporate initiatives.
• Leading the Business Ambition for 1.5°C Campaign: Mobilizing companies globally to set science-based targets aligned with a future where global temperature rise is limited to 1.5°C. The campaign encourages ambitious climate action, highlighting the importance of avoiding the most severe climate impacts that would occur if global warming exceeds this threshold.

The SBTi is crucial in the global transition to a low-carbon economy, encouraging companies to adopt sustainable practices and significantly contribute to climate change mitigation.

Benefits for Companies

Adopting science-based targets brings a range of tangible and intangible benefits for companies, including:

• Risk Reduction: By aligning their strategies with climate requirements, companies can mitigate regulatory, reputational, and market risks associated with climate change.
• Competitive Advantage: Companies with SBTs often lead in innovation, efficiency, and resilience, translating into significant competitive advantages. This can include reduced operational costs through energy efficiency improvements and the creation of new markets for sustainable products and services.
• Access to Capital: Investors are increasingly looking for companies with robust sustainability strategies. Adopting SBTs can improve access to green financing and attract investors focused on ESG (Environmental, Social, and Governance).
• Reputation and Brand: Companies committed to sustainability and climate action often enjoy a stronger reputation and greater customer loyalty. This can lead to increased sales and customer retention.
• Stakeholder Engagement: Adopting SBTs can strengthen relationships with various stakeholders, including employees, customers, suppliers, and local communities, promoting greater engagement and support.

SBTi Participation Process

Joining the Science Based Targets initiative (SBTi) involves a structured process that enables companies to establish and validate GHG emission reduction targets based on science. This process ensures that the targets are ambitious, transparent, and aligned with global climate mitigation goals.

Criteria and Requirements

To join the SBTi and set science-based targets, companies must meet specific criteria and requirements:

• Formal Commitment: The company must formally commit to the SBTi, declaring its intention to set science-based targets. This involves signing a commitment letter and registering on the SBTi platform.
• Target Coverage: Targets must cover all significant GHG emissions of the company, including Scope 1 (direct emissions), Scope 2 (indirect emissions from energy consumption), and, in many cases, Scope 3 (other indirect emissions along the value chain).
• Consistency with the Paris Agreement: Targets must be consistent with the decarbonization pathways necessary to limit global warming preferably to 1.5°C above pre-industrial levels.
• Time Horizon: Targets should be short- to medium-term and include long-term targets to ensure continuity in emission reduction efforts.
• Transparency and Reporting: Companies must publicly report their GHG emissions and progress towards the reduction targets. Transparency is essential for credibility and accountability.

Steps in the Process

The process of joining the SBTi can be divided into the following main steps:

• Commitment: The initial step is the formal commitment, where the company signs the commitment letter and registers on the SBTi platform. This demonstrates the company’s commitment to setting science-based targets.
• Target Development: The company develops its GHG emission reduction targets based on the guidance and methodologies provided by the SBTi. This involves collecting data on current emissions, analyzing the necessary reduction pathways, and defining specific and measurable targets.
• Submission for Validation: The developed targets are submitted to the SBTi for validation. The SBTi assesses whether the targets are consistent with established criteria and aligned with the decarbonization pathways needed to meet global climate goals.
• Stakeholder Communication: Once the targets are approved, the company must formally communicate its targets to internal and external stakeholders. This includes sharing the confirmation that the targets are aligned with the SBTi, demonstrating transparency and commitment to sustainability.
• Implementation: After approval, the company implements the necessary strategies and actions to achieve its emission reduction targets. This may include improving energy efficiency, adopting renewable energy, enhancing production processes, and other sustainable measures.
• Monitoring and Reporting: The company must regularly monitor progress towards the established targets and publicly report its advances annually. Transparency in reporting is crucial for maintaining credibility and accountability.

This process helps companies set robust, science-based emission reduction targets, significantly contributing to climate change mitigation and promoting global sustainability.

Challenges and Solutions in Implementing the SBTi

Implementing science-based targets (SBTs) can present several challenges for companies. However, with the right approach and adequate support, these challenges can be overcome, allowing companies to reap the benefits of their sustainability targets.

Main Challenges

The main challenges in implementing SBTi are:

• Technical Complexity: Establishing SBTs requires a deep understanding of the company’s GHG emissions and the scientific methodologies for calculating the necessary reductions. This technical complexity can be a significant obstacle, especially for companies without previous experience in carbon inventories and climate modeling.
• Initial Cost: Implementing measures to reduce emissions may require investments in technology, infrastructure, or operational changes. These initial costs can be a barrier, especially for small and medium-sized enterprises (SMEs).
• Internal Resistance: Organizational changes often face internal resistance. Convincing all levels of the company, especially top management, about the importance and benefits of SBTs can be challenging but is essential.
• Data and Measurement: Collecting, managing, and accurately reporting GHG emission data can be complex, time-consuming, and labor-intensive. Companies may struggle to obtain complete and reliable data, particularly for Scope 3 emissions.
• Value Chain Alignment: Indirect emissions (Scope 3) often represent a significant portion of a company’s total emissions. Aligning suppliers and business partners with emission reduction targets can be challenging.

Solutions and Best Practices

Companies can undertake various activities to facilitate the implementation of the SBTi:

• Leadership Engagement: Engaging leadership is crucial for the successful implementation of SBTs. Ensuring top management is committed to the process involves highlighting the business advantages of a robust sustainability strategy, including risk reduction, image enhancement, access to new markets, and funding opportunities, in addition to contributing to a more sustainable future.
• Awareness and Training: Investing in training and capacity-building for employees on climate issues and SBTs can help overcome technical complexity and internal resistance. Workshops, training sessions, and the dissemination of information on the benefits of SBTs can create a more receptive environment.
• External Support: Hiring specialized consultants or collaborating with organizations that offer technical support can help companies navigate technical challenges. Specialized support in these areas can assist companies throughout the process, from setting targets to managing organizational change, ensuring a smooth and effective transition to more sustainable practices.
• Financial Planning: Developing a detailed financial plan that includes a cost-benefit analysis of emission reduction actions can help justify initial investments. Identifying government support and external funding sources can also alleviate costs.
• Partnerships and Collaborations: Working with suppliers and value chain partners to set common targets and share best practices can facilitate alignment and the implementation of SBTs. Sectoral partnerships and collaborative initiatives can amplify the impact.

Working with suppliers and value chain partners to set common targets and share best practices can facilitate alignment and the implementation of SBTs. Sectoral partnerships and collaborative initiatives can amplify the impact.

Kaizen Institute Support in Implementing the SBTi

The Kaizen Institute (KI) provides comprehensive support for companies aiming to set and implement science-based targets (SBTs). This support includes consultancy services, starting with an initial diagnosis and assessment to analyze GHG emissions in detail and identify reduction opportunities. The KI then collaborates with the organization to develop specific targets and action plans for emission reduction. The KI also assists in the process with the SBTi.

Additionally, the Kaizen Institute supports the implementation of strategies by conducting training to equip teams in emission management and workshops to implement measures achieving SBTs.

The Kaizen Institute also helps implement a sustainability governance model and monitor the progress of established targets. Preparing sustainability reports and sharing industry benchmarks and best practices are essential parts of the support offered.

The support from the Kaizen Institute allows companies to adopt a personalized approach, tailoring solutions to their specific needs, ensuring sustainable results and a smooth and effective change process. With the Kaizen Institute’s support, companies can set and achieve their targets, creating value for both the business and the environment.

Still Have some Questions About the SBTi?

Who Can Participate in the SBTi?

The SBTi encourages financial institutions and companies of all sectors and sizes to develop science-based targets (SBTs). Recognizing differences between business areas, the SBTi provides sector-specific guidance and a simplified process for Small and Medium Enterprises (SMEs).

The SBTi focuses particularly on companies from high-emission sectors, which is crucial in the transition to a zero-carbon economy.

SMEs can validate their short-term and net-zero targets by submitting them to the simplified SME target validation system.

 Currently, the SBTi does not evaluate targets for cities, local governments, public sector institutions, educational institutions, or non-profit organizations. However, these stakeholders are encouraged to adopt SBT-setting methods independently.

How Does the SBTi Validate Targets as “Science-Based”?

When a company submits a target, the SBTi Target Validation Team conducts an assessment to ensure the target complies with the SBTi Criteria and aligns with climate science. If the target meets the established criteria, it is validated and marked on the SBTi Target Dashboard as ‘Targets set.’ If the target does not comply, the SBTi provides feedback to the company, encouraging necessary adjustments and resubmission for validation.

How Are Scope 3 Targets Handled?

Scope 3 targets are mandatory if they represent a significant part of the company’s total emissions. The SBTi provides guidance on identifying, quantifying, and setting targets for these indirect emissions along the value chain.

What Happens If a Company Fails to Meet Its Targets?

If a company fails to meet its targets, it is crucial to review and adjust the implemented strategies and actions. The SBTi encourages transparency and accountability, recommending organizations publicly communicate the challenges faced and measures taken to correct the course.

Can SBTs Be Adjusted Over Time?

Yes, targets can and should be periodically reviewed to ensure they remain aligned with scientific advancements and changes in company operations. The SBTi recommends reviewing targets every five years or in case of significant changes.