Science-based targets are a set of goals developed by a business to provide it with a clear route to reduce greenhouse gas emissions. An emissions reduction target is defined as ‘science-based’ if it is developed in line with the scale of reductions required to keep global warming well-below 2°C from pre-industrial levels and pursuing efforts to limit warming to 1.5°C.

Science Based Targets Initiative (SBTi)

The SBTi is a collaboration between CDP, World Resources Institute (WRI), the World Wide Fund for Nature (WWF), and the United Nations Global Compact and is one of the We Mean Business Coalition commitments. The initiative defines and promotes best practice in science-based target setting, offers resources and guidance to reduce barriers to adoption, and independently assesses and approves companies’ targets.

The SBTi promotes corporate climate action and encourages companies from all sectors to demonstrate their leadership by setting science-based emissions reduction targets.

 

SBT Guiding Principles:

Guiding Principle 1: Reaching net-zero emissions for a company involves achieving a state in which its value chain results in no net accumulation of carbon dioxide in the atmosphere and in no net-impact from other greenhouse gas emissions.

Guiding Principle 2: In accordance with the best available science, the Paris Agreement and Sustainable Development Goals, companies should transition towards net-zero in line with mitigation pathways that are consistent with limiting warming to 1.5°C with no or limited overshoot.

Guiding Principle 3: The mitigation strategy followed by the company should inform long-term strategies and investments that mitigate exposure to climate-related transition risks, ensuring that the business model of the company will continue to be viable in a net-zero economy.

Benefits of adopting a Science Based Target

• Build business resilience and increase competitiveness
• Drive innovation and transform business practices
• Build credibility and reputation
• Influence and prepare for shifts in public policy

Initial recommendations for robust corporate net-zero target setting:

1. Boundary: A company’s net-zero target should cover all material sources of GHG emissions within its value chain.
2. Transparency: Companies should be transparent about the sources of emissions, the timeframe for achieving net-zero emissions, the amount of abatement and neutralisation planned in reaching net-zero emissions, and any interim targets or milestones.
3. Abatement: Companies must aim to eliminate sources of emissions within its value-chain at a pace and scale consistent with mitigation pathways that limit warming to 1.5°C with no or limited overshoot.
4. Timeframe: Companies should reach net-zero GHG emissions by no later than 2050
5. Accountability: Net-zero targets should be supported by science based emissions reduction targets that are consistent with Paris-aligned mitigation pathways.
6. Neutralisation: Reaching net zero emissions requires neutralizing a company’s residual GHG emissions with an equivalent amount of carbon removals;
7. Compensation: Companies should consider undertaking efforts to compensate unabated emissions in the transition to net-zero as a way to contribute to the global transition to net zero;
8. Mitigation hierarchy: Companies should follow a mitigation hierarchy that prioritizes eliminating sources of emissions within the value chain of the company overcompensation or neutralization measures. Land-based climate strategies should prioritize interventions that help preserve and enhance existing terrestrial carbon stocks, within and beyond the value chain of the company.
9. Environmental and social safeguards: Mitigation strategies should adhere to robust social and environmental principles
10. Robustness: Compensation and neutralization measures should: (a) ensure additionality, (b) have measures to assure permanence of the mitigation outcomes, (c) address leakage and (d) avoid double counting.

Broadly speaking, corporate net-zero targets differ across three key dimensions: (1) the boundary of the target; (2) the mitigation strategy that the company will follow to attain the target; and (3) the timeframe to achieve the target.

Mitigation Strategies and Tactics:

• Abatement: Emissions abatement corresponds to measures that prevent the release of GHGs into the atmosphere by reducing or eliminating sources of emissions associated with the operations of a company and its value chain. Reducing or eliminating sources of emissions within a company’s value chain mitigates the impact of the company on the climate, and the climate-related risks to which the company is exposed.
• Neutralization: To neutralize is to “render something ineffective or harmless by applying an opposite force or effect.” Accordingly, the removal and permanent storage of atmospheric carbon is a measure that, theoretically, can neutralize or counterbalance the effect of releasing CO2 and other GHGs into the atmosphere.
• Compensation: Compensation measures commonly used by companies include direct investment in emission reduction activities, purchase of carbon credits, and avoided emissions through the use of sold products, amongst others.

 

Guidance

For practical guidance on setting a SBT, please refer to ‘SBTi How-To Guide’ Version 1.0 April 2021 and SBTi Corporate Manual Version 1.1 June 2021.

A Step-by-Step guide for all companies, including small and medium-sized enterprises (SMEs) committing to SBTs can be found here.

The SBTi Criteria and Recommendations Version 4.2 defines the minimum qualitative and quantitative criteria for targets to be recognised by the SBTi. All of the criteria must be met in order for target(s) to be recognized by the Science Based Targets initiative (SBTi). In addition, companies will follow the GHG Protocol Corporate Standard, Scope 2 Guidance, and Corporate Value Chain (Scope 3) Accounting and Reporting Standard. SBTi recommendations are important for transparency and best practices, but are not required.

The Target Validation Protocol Version 2.1 describes the underlying principles, process, and criteria followed to assess targets and to determine conformance with the SBTi Criteria. The SBTi strongly recommends that companies review the Protocol before target development.

Call to action guidelines can be found at Call to Action Guidelines (April 2020)

Additional guidance for setting SBTs for specific sectors can be found here:

• Aviation
• Electric Utilities
• Information and Communication Technology (ICT)
• Apparel and Footwear
• Financial Sector

 

Corporate Net Zero Standard

Published in October 2021, the SBTi's Corporate Net Zero Standard is the world's first framework for corporate net zero target setting in line with climate science. It includes guidance, criteria, and recommendations.

Key requirements of the Net Zero Standard include:

1. Focus on rapid, deep emission cuts: Rapid, deep cuts to value-chain emissions are the most effective and scientifically-sound way of limiting global temperature rise to 1.5°C. This is the central focus of the Net-Zero Standard and must be the overarching priority for companies. The Net-Zero Standard covers a company’s entire value chain emissions, including those produced by their own processes (scope 1), purchased electricity and heat (scope 2), and generated by suppliers and end-users (scope 3). Most companies will require deep decarbonization of 90-95% to reach net-zero under the Standard
2. Set near- and long-term targets: Companies adopting the Net-Zero Standard are required to set both near-term and long-term science-based targets. This means making rapid emissions cuts now, halving emissions by 2030. By 2050, organizations must produce close to zero emissions and will neutralise any residual emissions that are not possible to eliminate
3. No net-zero claims until long-term targets are met: A company is only considered to have reached net-zero when it has achieved its long-term science-based target. Most companies are required to have long-term targets with emission reductions of at least 90-95% by 2050. At that point, a company must use carbon removals to neutralize any limited emissions that cannot yet be eliminated.
4. Go beyond the value chain: The SBTi recommends Companies to go further by making investments outside their science-based targets to help mitigate climate change elsewhere. There is an urgent need to scale up near-term climate finance; however, these investments should be in addition to deep emission cuts, not instead of them. Companies should follow the mitigation hierarchy, committing to reduce their value chain emissions before investing to mitigate emissions outside their value chains