The Science-based Targets initiative (SBTi) from A to Z

The Science-based Targets initiative (SBTi) from A to Z

What role does SBTi play in carbon accounting? SBTi is an internationally recognized organization that has become a benchmark in the field of decarbonization. Thousands of companies have chosen to follow its methodology to set themselves science-based targets for reducing their GHG emissions. How does it work in practice?

Louis Héron

Louis Héron

Head of Marketing

Update :

The Science-based Targets Initiative is an international movement launched in the wake of the 2015 Paris Climate Agreement. Its aim is to mobilize companies in the face of the climate emergency, support them in their decarbonization projects and guarantee the compatibility of these projects with the objective of limiting the rise in global temperature to 1.5C° and that of carbon neutrality by 2050.

The SBTi uses a scientific method to ensure that the objectives set by companies are in line with those set by the COP21.

How does the SBTi work in practice? Is it a reliable approach? How can a company embark on a SBT (science-based targets) approach? What are the benefits?

The Science-Based Targets Initiative: a tool for the ecological transition

The SBTi project was launched in 2015 on the initiative of four international organizations:

  • United Nations Global Compact (UNGC)
  • World Wildlife Fund (WWF)
  • Carbon Disclosure Project (CDP)
  • World Resource Institute (WRI)

The main aim of this initiative is to support companies in their decarbonization projects and ensure that they set greenhouse gas (GHG) emission reduction targets that are aligned with the objectives set by the Paris Agreement and scientifically viable.

To determine whether companies' emission reduction targets are in line with a 1.5C° trajectory, SBTi uses science-based targets.

These targets must be in line with what the latest climate science deems necessary to achieve the goals of the Paris Agreement, i.e. to limit global warming to well below 2°C compared with pre-industrial levels, and to continue efforts to limit warming to 1.5°C.

To achieve this, the SBTi has developed a very precise methodology that takes several factors into account:

  • a carbon budget designed to meet the objective of limiting global warming to 1.5C°.
  • GHG emission scenarios from the IPCC or the IEA (International Energy Agency)
  • a method of allocating emissions: reducing emissions in intensity or in absolute terms, or converging emissions in intensity towards a reference level for each sector

This methodology should enable companies to set clear, scientifically-based targets for reducing their greenhouse gas emissions, and to make a full contribution to reducing emissions worldwide, according to their respective impact.

Strong synergies with international organizations

The SBTi has forged close links with the GHG Protocol and the CDP, two widely recognized international organizations in the field of corporate decarbonization.

To validate SBT objectives, the use of the methodology developed by the GHG Protocol is strongly recommended, if not mandatory. These synergies include the consideration of all greenhouse gases and, above all, the GHG emissions accounting method by scope as established by the GHG, particularly with regard to scope 3, which enables emissions levels to be measured throughout the company's value chain.

Synergies with the methodology used in the CDP questionnaires are also obvious, all the more so as the Carbon Disclosure Project is a founding member of the SBTi. Setting targets based on scientific data is an integral part of CDP questionnaires. The absence of SBT objectives can even weigh heavily on the final score, leading to the loss of an A + or even A rating.

In addition, the Science Based Targets Initiative maintains numerous partnerships with other international movements, such as We Mean Business, Business Ambition for 1.5°C and the ACT Initiative.

This complementarity between the different international reporting frameworks, and their mutual recognition, means that companies can set a global framework for their decarbonization policies.

SBTi's Net Zero objective

In October 2021, the SBTi revealed its "Net Zero" benchmark for companies. This new benchmark encourages committed companies to achieve a long-term reduction target up to and including carbon neutrality.

The "Net Zero" objective is built around 4 key points that go further than the initial SBT approach:

  1. Set short-term targets: to meet the 1.5°C objective, companies must set targets for reducing their total emissions (scope 1, 2 and 3) in line with the Paris Agreement, and over a maximum timeframe of 5 to 10 years.
  2. Define long-term objectives: in addition to short-term objectives, the Net Zero benchmark requires committed companies to define long-term objectives which must be compatible with scenarios aimed at limiting global warming to + 1.5°C and must be achieved by 2050 (and 2040 for the energy sector).
  3. Short-term contribution through carbon finance: companies are encouraged to invest in carbon sequestration or carbon avoidance projects outside their value chain. These actions are based on the purchase of carbon credits, a lever that remains complementary to GHG reduction actions. However, SBTi places more emphasis on sequestered emissions than on avoided emissions, considering carbon credits from avoidance projects to be less reliable.
  4. Neutralization: finally, the last stage in achieving carbon neutrality involves reducing residual emissions as much as possible, then absorbing them through carbon sequestration actions.

It should be noted that SBTi has chosen not to take into account emissions avoided within the company's value chain, which is not the case with the Net Zero Initiative reference framework promoted by Carbone 4. This excludes the valuation of products and services marketed by the company that help to reduce carbon emissions on a global level (bicycles versus cars, for example).

Why embark on a Science-based targets initiative?

The SBTi movement has rapidly gained international recognition for its rigor, reliability and the credibility of the people behind it. Several thousand companies of all sizes have rapidly adopted the scientific approach it promotes.

To date, nearly 6,800 companies worldwide have signed up to the SBTi, including over 4,000 with ambitious science-based targets and over 2,600 with commitments to achieve Net Zero by 2050.

This growth illustrates the growing popularity of this initiative, the growing awareness of climate issues among companies, and the urgent need for them to adapt as quickly as possible, both for their brand image and for their medium- and long-term viability.

The SBTi has thus become one of the key voluntary standards in the carbon accounting landscape.

The list of benefits for companies is as diverse as it is varied:

  • Enhance their employer brand and image by demonstrating concrete commitments to which consumers and young talent are increasingly sensitive.
  • Strengthen the confidence of investors, who increasingly value climate risk management, from the reduction of environmental impact to a company's ability to adapt to climate change.
  • Achieve substantial savings, particularly in energy costs, and improve operational efficiency through a comprehensive, easy-to-understand carbon footprint.
  • Contribute to sustainable economic growth for future generations by committing to an SBT trajectory of +1.5°C.
  • Increase their resilience in the face of ever-changing environmental regulations.
  • Stimulate innovation and competitiveness by becoming a leader in innovation and sustainable development.

Understanding the mechanisms behind the SBTi

Committing to an SBT approach requires not only a concrete commitment to decarbonization, but also transparency. Each year, companies will have to report on their progress towards the targets they have set themselves, and adjust them if necessary to ensure that they achieve their long-term objectives.

They must also comply with four essential criteria set out by the SBTi:

  • Cover a broad scope of emissions, including scope 3:

At least 95% of direct and energy-related Scope 1 and 2 emissions must be included in the company's SBT target.

Scope 3 must be accounted for if it represents more than 40% of the company's carbon footprint. In this case, the reduction target must cover at least 67% of Scope 3 emissions.

  • No carbon offsetting: carbon offsetting is only permitted for companies wishing to finance additional emissions reductions beyond their SBT reduction targets.
  • Avoided emissions are not taken into account by SBT
  • Renewable energy certificates may only be used to reduce Scope 2 greenhouse gas emissions.

How to set SBT goals

The first step in setting SBT targets is to establish a baseline year. The carbon balance achieved in this reference year will serve as the basis for setting the company's decarbonization objectives throughout its SBT approach.

In order to set its targets, the company must then draw up an emissions scenario, which it will compare with its "carbon budget", i.e. the maximum quantity of GHG emissions it is possible to emit by 2050, while respecting the objectives of limiting global warming to 1.5C°.

Based on this analysis, the final step is for the company to set emission reduction targets compatible with keeping global warming to 1.5°C, in line with the Paris Agreements. To ensure that these targets are scientifically viable, SBTi provides companies embarking on this process with a methodological framework to help them identify the best levers for action to improve their carbon footprint, by setting medium-term targets over 5 to 10 years, and long-term targets for 2050, with intermediate objectives.

Key criteria for near and long-term science-based targets
Key criteria for near and long-term science-based targets (Source : SBTi Getting Started Guide - April 2023)

These objectives can be formalized in various ways:

  • absolute reduction targets
  • reduction targets in relative terms or carbon intensity
  • supplier or customer commitment targets (scope 3)
  • renewable energy supply targets: for scope 2, renewable energies must account for 80% of the total by 2025 and 100% by 2030.

Companies can also submit combined targets, i.e. targets that simultaneously act on several scopes. In this case, the aim is to ensure that the share representing scope 1 and 2 is aligned with a 1.5°C global warming scenario, and that the share representing scope 3 is aligned with a scenario "well below 2°C". 

Each year, companies will be required to monitor the results achieved against their targets, and if necessary to reassess these targets in the light of these results or of exceptional events occurring during the period and likely to have an impact on the company's GHG emissions.

The Science-Based Targets Initiative is also developing accounting methodologies and sectoral carbon trajectories to encourage companies to set ever more ambitious and relevant science-based climate targets. Of the 17 sectors identified, 8 have already been finalized, including cement, energy, financial institutions and FLAG (Forest, Land and Agriculture), while the others are still under development.

How can I join the Science-Based Targets Initiative?

Setting a scientific emissions reduction target is a lengthy process that can take up to two and a half years. Understanding this process is essential if your company is to obtain SBT validation and play a major role in the fight against global warming and sustainable development.

You have to go through 5 steps to obtain SBT certification.

SBTi engagement process
SBTi engagement process (Source: SBTi)
  1. Get involved.

The first step is an administrative formality: the company must submit to the SBTi a letter of commitment declaring its intention to set a target based on scientific data. The SBTi offers a range of sample letters of commitment, depending on the size of your organization.

  1. Elaborate

The company has two years to draw up its roadmap, which must be in line with the objectives of the Paris Agreement. To draw up these scientific objectives, the company must use the methodologies made available by the SBTi and, where applicable, the sectoral methodological framework relevant to it.

  1. Submit

The company officially presents its decarbonization plan to the SBTi.

  1. Communicate

The company is encouraged to communicate extensively on its objectives and inform its stakeholders of its commitments.

  1. Disclose

The company must monitor its GHG emission levels at group level and report on the progress made each year towards achieving its SBT targets.

Traace can help you implement and monitor your SBT approach. To find out more, you can contact us via this form.

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