Science-based Targets initiative or SBTi is rapidly and consistently gaining more popularity as Sustainability Standards. With over 2000 companies that have committed to take actions, it is time to look closely at Science-based Targets initiative. In this article, we will explain about SBTi and how you can set targets for your SBTi reporting.
What is the SBTi?
Science-based Targets initiative (SBTi) is an organization that validates corporate emissions reductions targets in line with the Paris Agreement to limit global warming to 1.5°C. SBTi was created in 2015 as a partnership among the United Nations, WWF, World Resources Institute, and CDP, its closely affiliated carbon disclosure and reporting hub. The backing of the science comes from aligning target criteria with “limiting global warming to well-below 2°C above pre-industrial levels and pursue efforts to limit warming to 1.5°C”. However, SBTi is rapidly phasing out the well-below 2°C option and from 2023 and onward, only validates targets that align with the 1.5°C pathway.
Target validations from SBTi cover only private corporations. Cities, non-profits, public, and governing bodies, are excluded as well as oil and gas companies – as of today.
SBTi’s popularity is growing exponentially, doubling the number of companies with committed and approved targets every year since 2018. And in the unlikely case you still can’t relate SBTi targets to something you know, ground it on this. When you recall a company’s net-zero target, it is most likely an SBTi-approved target.
Important to know: SBTi is solely responsible for validating emissions reductions targets that companies themselves set.
While SBTi liberally tracks the progress of companies against those targets and strongly recommends a linear reduction trajectory year-after-year, SBTi does not sanction companies that do not perform according to their recommendations. The mandatory follow-up is that a company must revalidate SBTi targets every 5 years.
Sector-specific guidance for various industries
The SBTi recognizes that each industry faces unique challenges on the path to decarbonization—which is why they’ve developed methodologies, frameworks, and requirements tailored to different sectors.
As of September 2024, finalized guidance is available for key industries like:
- Apparel and footwear
- Buildings
- Cement
- Financial institutions
- Forest, land and agriculture (FLAG)
- Information and Communication Technology (ICT)
- Maritime
- Power
- Steel
Several other sectors, including aluminium, aviation, chemicals, land transport, and oil and gas, are in a development or scoping phase.
Using this tailored guidance ensures your SBTi targets align with the specific realities of your sector while still contributing to global climate goals.
What are SBTi targets?
SBTi offers a matrix of targets, which are interconnected in the process. Let’s take a look at the basic components of SBTi targets and let them float before we break them down:
- Type of target: Companies setting science-based targets may choose to set absolute targets, intensity targets, renewable electricity targets, engagement targets, or any combination of the above.
- Time frame: Most of these types of targets can have a combined near-term/long-term approach. For near-term targets, companies must also select a target year that is minimum 5 and maximum 10 years ahead.
- Scopes: Depending on the type of target, they may select Scope 1, 2, 3 or a combination of Scopes the targets apply to. However some types of targets are Scope-specific. For example, engagement targets only apply to Scope 3.
- Base year: Companies need to select a base year after 2015, that should be consistent across all targets. This base year will serve as the baseline for the GHG inventory and it should be representative of a company’s emissions profile.
- Pathways: Companies may need to choose a general (cross-sector) pathway, an industry-specific (sector approach) pathway if it is available for their sector, or a combination of the two.
- SMEs: If a company falls into the SME category, a singular pathway is available for them and the requirements for target selection are more streamlined.
Now let’s deep-dive into these terms and explore how they determine your final targets.
How does setting a science-based target help address the climate crisis?
Setting a science-based target aligns your business with the level of decarbonization needed to keep global warming below 1.5°C—helping to avoid the most severe impacts of climate change.
By committing to SBTi targets, you’re not just reducing your own emissions; you’re actively contributing to a global effort grounded in climate science.
What are the benefits of setting science-based targets?
Setting SBTi targets isn’t just good for the planet—it’s a smart move for your business. Here’s why:
- Strengthened reputation – You demonstrate climate leadership and build trust with customers, investors, and partners.
- Regulatory readiness – You stay ahead of evolving climate policies and regulations, reducing compliance risks.
- Operational efficiency – You drive innovation and uncover cost savings through improved energy and resource use.
- Investor appeal – You attract ESG-focused investors by showcasing credible, science-aligned climate action.
- Market advantage – You meet growing demand for low-carbon products and services, and differentiate your brand.
- Climate resilience – You future-proof your business against climate-related risks and supply chain disruptions.
What is the difference between net zero and science-based targets?
Both net zero and science-based targets share the same goal – to align emissions with removals by 2050 at the latest and stay within the 1.5°C climate threshold.
However, there are certain differences between the two concepts.
Net zero targets
- Must include all Scope 1, 2, and 3 emissions.
- Focused on the 2050 deadline.
- Can follow different standards like the UN Net Zero Recommendations, ISO guidance, or the SBTi Corporate Net-Zero Standard.
- Monitoring and reporting are less standardized, often based on individual pledges and frameworks.
Science-based targets
- Targets can cover Scopes 1 and 2 or include Scope 3.
- Near-term targets must include Scope 3 if it accounts for 40%+ of total emissions. Long-term targets, however, must always include Scope 3 emissions.
- Require emissions to be halved by 2030 and net zero by 2050.
- Defined and guided by the SBTi Corporate Net-Zero Standard.
- Independently verified by SBTi, ensuring transparency and credibility.
Tip: Trying to cut through the climate jargon? Set credible goals by knowing the difference between carbon-neutral, net zero, climate positive & Co.
Timeframe for SBTi targets
Long-term/Net zero targets
Long-term targets have a net-zero ambition and a 2050-time limit. SBTi strongly recommends that companies commit to a long-term target, which they deem of higher ambition. What this targets practically means is that the company needs to reduce emissions by at least 90% by 2050.
If your ambition is to set a net-zero target, you are required to also develop near-term targets in the next 24 months. Both targets will be validated at the same time.
Near-term targets
Near-term targets have a timeframe of a minimum of 5 and a maximum of 10 years and enable a company to formulate more specific ambitions. Your company may set near-term targets without long-term targets. However, if a net-zero target is your ambition you are required to also develop near-term targets.
A base year with a complete Scope 1, 2, 3 inventory is required to set both near- and long-term targets.
Scopes for SBTi targets
Scopes 1 & 2
Scopes 1 and 2 are mandatory to include in any type of absolute target setting, as near-term targets must cover at least 95% of them. For large companies and conglomerates, Scope 1 can be tricky. SBTi recommends that parent companies include all subsidiaries in this boundary.
Scope 3
To start with, setting any target with SBTi requires a full GHG inventory, including Scope 3 with a breakdown of the 15 categories. If Scope 3 comprises of over 40% of the total emissions, then a company must set Scope 3 near-term targets, covering at least 2/3 of the Scope 3 emissions. Then the company may select to set targets for a portion of the 15 categories, provided that they make up for 2/3 of Scope 3 emissions.
Scope 3 near-term targets may be in terms of economic intensity, physical intensity, or supplier/customer engagement.
Scope separation and inventory calculation for SBTi require adherence to the relative GHG protocol standards.
- Scope 1: GHG protocol Corporate Standard
- Scope 2: GHG protocol Scope 2 Guidance
- Scope 3: GHG protocol Value Chain (Scope 3) Accounting and Reporting Standard
Pathways for SBTi targets
Cross-sector absolute targets
This pathway is for companies that operate in an industry without sector-specific guidance. Cross-sector targets are absolute, meaning that the company commits to reducing emissions irrespective of the production output of the company.
Sectoral decarbonization approach
SDA applies to a company’s emissions that come from a sector with specific guidance. These targets apply to emissions reductions that are relative to a specific business metric, for example, 30% emissions reductions per tonne of wheat. Intensity targets can help a company develop a more concrete roadmap but may not necessarily lead to absolute emissions reductions.
Need more information? Watch our webinar, SBTi FLAG for the Food Industry: How to get ready to learn more about how you can prepare and set your SBTi FLAG targets.
What are FLAG targets?
Forest Land and Agriculture Guidance from SBTi was a hot discussion and long-awaited before its release in September 2022. Put simply, if your company is active in agriculture, animal sourcing, food processing, and food retail, by April 2023 you are required to set FLAG targets with SBTi. To put your mind at ease though, your FLAG targets will only cover the portion of your emissions until the farm gate. For all other emissions, you can set targets with the cross-sector approach.
Need help setting your SBTi FLAG targets? Find out how it’s done in our blog post.
- Must-haves
- The target threshold for all scopes is the same as the cross-sector approach: Scope 1 + 2 targets must cover a minimum of 95% of related emissions and Scope 3 targets must cover at least 2/3 of emissions.
- Setting a FLAG target also means that, by default, you commit to zero deforestation by 2025.
- Product carbon storage cannot be included in the targets.
- Among the accepted standards for calculating your FLAG inventory are:
- IPCC Guidelines for National GHG inventory, Guidance for LULUCF (Land use and Land use change), and Gas inventories: Wetlands
- GHG protocol: Corporate Standard, Scope 3 Standard, Product Standard, Land Sector and Removals Guidance (draft version, accepted for now and until the 5 year target revalidation)
- ISO 14064-1 and 14067
- Nice-to-haves
- If your company manages one of the following products, the FLAG tool has a specific commodity approach to set intensity targets: Beef, chicken, dairy, leather, maize, palm oil, pork, rice, soy, wheat, and timber & wood fiber.
- Your targets can be absolute or in terms of intensity with the commodity pathways.
- In general, companies with diverse agricultural activities are encouraged to use the general FLAG targets. Companies on the supply side or companies with more than 10% of their FLAG emissions in one commodity can use the commodity approach, but are not required to do so.
- Fossil emissions from land management, such as irrigation and machinery, may be integrated into your FLAG inventory if you wish!
SBTi targets: Matrix for retailers, food & beverage companies
The pathways for a company operating within the food system are more clearly scoped and make the SBTi matrix more tangible. Let’s take a look at the smorgasbord of targets reserved for the food industry.
Target | Method | Timeframe | Scopes |
Absolute | Cross-sector reduction | Near- and long-term | Any |
FLAG reduction | Near- and long-term | Any | |
Intensity | FLAG commodities | Near- and long-term | Any |
Economic intensity reduction | Near- and long-term | Scope 3 only | |
Physical intensity reduction | Near- and long-term | Scope 3 only | |
Other | Renewable electricity | Near- and long-term | Scope 2 only |
Engagement | Near-term only | Scope 3 only |
How to set science-based targets
Now that you have an idea of the SBTi matrix, the process of setting SBTi targets should be quite straightforward!
1. Commit
Register with the Science Based Targets initiative (SBTi) and submit a letter committing to set a FLAG science-based target.
2. Account
Build a detailed greenhouse gas emissions inventory—be sure to separate your land-based (FLAG) emissions from your energy and industry emissions, and include any carbon removals from sustainable land management or reforestation.
3. Develop
Navigate the SBTi matrix to find the right target-setting approach for your business.
4. Submit
Submit your science-based targets using the appropriate tools (Net-Zero tool, SBT tool, FLAG tool) along with the Target Submission Form—just keep in mind you have 24 months from your commitment letter to get this done.
5. Share
Share your targets with the world.
6. Disclose
Report your progress every year, either through the recommended route, the CDP questionnaire, or an annual report.
Setting SBTi targets doesn’t have to be complex – Try CarbonCloud
The most time-intensive yet important part of setting SBTi targets is building you greenhouse gas inventory and calculating FLAG emissions.
CarbonCloud streamlines this process. We provide your FLAG inventory and a per-gate segmentation straight out of the box, with metrics conforming to the GHG Protocol Product Standard and ISO 14067 as requested by SBTi.
All you have to do is focus on action—we’ll handle the complexity.
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