What is the Science Based Targets Initiative (SBTi)?

The Science-Based Targets Initiative (SBTi) is a global initiative that encourages businesses to set ambitious, scientifically grounded targets to reduce greenhouse gas emissions. It is a collaboration between the Carbon Disclosure Project (CDP), the United Nations Global Compact (UNGC), the World Resources Institute (WRI), and the World Wide Fund for Nature (WWF).

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The SBTi clearly defines a pathway to future-proof growth by specifying how much and how quickly companies need to reduce their greenhouse gas emissions. The initiative aims to support companies in transitioning to a low-carbon economy and prevent the worst impacts of climate change.

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Origins and Purpose of the SBTi

The SBTi was launched in 2015, in the lead-up to the Paris Agreement, to increase corporate ambition on climate action. The initiative recognized the need for a standardized approach for businesses to set emission reduction targets in accordance with climate science.

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The SBTi aims to mobilize companies to set science-based targets to boost their competitive advantage in the transition to the low-carbon economy. It also aims to demonstrate that setting such targets is beneficial and achievable.

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Role of the Founding Partners

The SBTi is a partnership between four organizations: CDP, UNGC, WRI, and WWF. Each brings unique strengths and expertise to the initiative. CDP, formerly known as the Carbon Disclosure Project, runs the global disclosure system for investors, companies, cities, states, and regions to manage their environmental impacts. UNGC is a voluntary initiative encouraging businesses to adopt sustainable and socially responsible policies. WRI is a global research organization that spans over 60 countries, with offices in the United States, China, India, Brazil, and more. WWF is one of the world's leading conservation organizations, working in nearly 100 countries.

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How the SBTi Works

The SBTi operates by defining and promoting best practices in science-based target setting. Companies that join the initiative commit to set science-based emission reduction targets, which are then independently assessed by the SBTi.

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The targets companies set must align with the level of decarbonization required to keep global temperature increase below 2 degrees Celsius compared to pre-industrial temperatures, as outlined in the Paris Agreement. The SBTi provides resources and guidance to help companies set and achieve these targets.

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Setting Science-Based Targets

Before setting science-based targets, companies must understand and measure their greenhouse gas (GHG) emissions comprehensively. This process initially involves measuring Scope 1, 2, and, if relevant, Scope 3 emissions. Here’s a detailed breakdown of the steps involved in measuring these emissions and subsequently using the Science Based Targets Initiative (SBTi) framework to establish targets for reducing those emissions.

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Step 1: Inventory of Scope 1 Emissions (Direct Emissions)

Scope 1 emissions are direct emissions from owned or controlled sources. Companies must first identify all direct GHG emissions from their operations. This includes emissions from fuel combustion in company vehicles, boilers, furnaces, and other direct sources. Measuring Scope 1 emissions is foundational, providing a baseline for reduction efforts.

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Step 2: Accounting for Scope 2 Emissions (Indirect Emissions from Energy Purchase)

Scope 2 emissions cover indirect GHG emissions from purchased electricity, steam, heating, and cooling consumption. These emissions are related to energy generated elsewhere but consumed by the organization. Companies need to gather data on their energy consumption and apply relevant emission factors, which vary by country and energy source, to calculate their Scope 2 emissions.

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Step 3: Assessing Scope 3 Emissions (All Other Indirect Emissions)

Scope 3 emissions are all indirect emissions (not included in Scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions. Measuring Scope 3 emissions is more complex due to the vast range of activities and processes that may contribute to the company’s carbon footprint. These can include emissions associated with producing purchased materials, using sold products, and waste disposal. Due to their complexity and the amount of data required, companies often use estimates and industry averages alongside specific data where available.

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Step 4: Applying the Science Based Targets Initiative (SBTi) Framework

Once a company comprehensively understands and measures its Scope 1, 2, and 3 emissions, it can set science-based targets using the SBTi framework. The steps below highlight the process:

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Alignment with Climate Science

Targets are set in line with what the latest climate science says is necessary to meet the goals of the Paris Agreement - to limit global warming to well below 2°C above pre-industrial levels and pursue efforts to limit the increase to 1.5°C.

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Adoption of Approved Methodologies

Companies select from methodologies approved by the SBTi, which are designed to ensure consistency, relevance, and fairness in target setting across industries and sectors. These methodologies consider the company’s sector, size, and emissions.

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Setting Absolute vs. Intensity Targets

Companies may set absolute targets (reducing overall GHG emissions), intensity targets (GHG emissions relative to a productivity metric, such as per unit of output or revenue), or a combination of both, depending on which is most appropriate for their context and business model.

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Covering Emission Scopes

Science-based targets must cover company-wide Scope 1 and Scope 2 emissions as a minimum, with a strong encouragement to address Scope 3 emissions if they constitute a significant portion of the company’s overall emissions.

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Validation and Commitment

After setting their targets, companies submit them to the SBTi for validation to ensure they meet the initiative's criteria. Upon approval, companies commit publicly to these targets, linking corporate sustainability efforts with global efforts to mitigate climate change.

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By measuring and understanding their GHG emissions across all scopes and applying the SBTi framework, companies can effectively set and achieve science-based emission reduction targets, contributing to the global transition to a low-carbon economy.

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Benefits of Joining the SBTi

Joining the SBTi offers companies a range of benefits. By setting science-based targets, companies can drive innovation, reduce regulatory uncertainty, strengthen investor confidence and improve profitability and competitiveness.

Moreover, companies that set science-based targets are seen as leaders in their industry. They demonstrate their commitment to a sustainable future and can influence their peers, customers, and suppliers to do the same.

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Impact on Business Performance

Setting science-based targets can positively impact a company's business performance. It can lead to cost savings through improved energy efficiency and risk management. It can also enhance a company's reputation and increase its attractiveness to investors.

Furthermore, companies that set science-based targets are better prepared for future regulations and standards that may be imposed as countries work to meet their commitments under the Paris Agreement.

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The SBTi's Role in the Fight Against Climate Change

The SBTi plays a crucial role in the global fight against climate change. By encouraging and supporting companies in setting science-based emission reduction targets, the initiative contributes to the global effort to limit warming to below 2 degrees Celsius.

The SBTi also contributes to driving the transition to a low-carbon economy. By setting science-based targets, companies take concrete steps to reduce their carbon footprint and contribute to a sustainable future.

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Future Goals of the SBTi

The SBTi has ambitious goals for the future. The SBTi aims to influence policy by demonstrating that a low-carbon economy is feasible and beneficial for businesses. By showcasing the success of companies that have set science-based targets, the SBTi hopes to encourage more companies to follow suit.

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Summary

The Science Based Targets initiative is a powerful tool in the fight against climate change. By providing a clear and effective framework for companies to reduce their greenhouse gas emissions, the SBTi is helping to drive the transition to a low-carbon economy.

Companies that join the SBTi contribute to a sustainable future and gain a competitive advantage. By setting science-based targets, they demonstrate their commitment to sustainability, enhance their reputation, and prepare for future regulations and standards.

As you consider the importance of setting science-based targets for your company, remember that the journey to effective carbon management doesn't have to be daunting. Arbor's Carbon Management Platform is designed to empower executives and project leaders like you to make informed, environmentally aware decisions easily. With our industry-leading accuracy in carbon calculations and GRI-certified reporting, you can confidently navigate stakeholder expectations and regulatory pressures. Whether you prefer a self-serve approach or expert-led guidance, Arbor is here to simplify the process and provide the actionable insights needed to become a sustainability champion in your organization. Don't let the challenges of carbon management hold you back.

‍Talk to sales today and take the first step towards a more sustainable future for your company.