What is the Science Based Targets initiative?
If you’re a large organisation, it’s very likely you’re having to report your greenhouse gas emissions under one mandatory scheme or another. Because of this, many organisations are choosing to go one step further and commit to carbon reductions targets such as net-zero, even if they aren’t required to report their emissions.
The Science Based Targets initiative (SBTi) sets the gold standard for emissions reduction. To date, over 1,500 companies have had their targets approved. Here, we lay out what it is, who can sign up, why you’d want to, and the steps you’d need to take.
What are science-based targets?
The 2015 Paris Agreement saw nearly 200 of the world’s governments commit to preventing dangerous climate change by limiting global warming to well below 2°C above pre-industrial levels and pursuing efforts to limit it to 1.5°C by 2030.
SBTi enables organisations to set ambitious emission reduction targets in line with what the latest climate science says is necessary to meet the Paris Agreement. Organisations commit to halving their emissions by 2030 and achieving net zero by 2050, with SBTi independently assessing and verifying each company’s target figures.
Who can sign up?
With a few exceptions, all companies and financial institutions can sign up to SBTi. The initiative provides specific guidance on routes and methods to join, depending on the size of the company and the sector in which they operate.
Currently, fossil fuel companies and automakers are unable to validate their targets, though the latter can commit to setting a target and SBTi hopes to include both sectors soon. Also excluded for the moment are cities, local governments, public sector institutions, educational institutions and non-profit organisations.
Why sign up?
With greenwashing rampant and many questioning the legitimacy of net zero claims, SBTi provides organisations with credible, recognisable and independently audited emissions targets. This strengthens a company’s brand, improves investor confidence, drives innovation and boosts profitability.
The systematic, science-based approach helps organisations to ascertain precisely how far they have to go to make a real difference. The ambitious nature of the targets ensure transformational action, demonstrating leadership on climate action.
What do I need to do?
The SBTi sign up process is slightly different depending on the size of an organisation. SMEs – defined as independent, non-subsidiary companies with fewer than 250 employees – can skip to step 3.
Step 1: Commit
Register online and submit a letter establishing your intent to set a science-based target (SBT) that is in line with SBTi’s criteria. You then have 2 years to set this target and get it, or an established target, verified by SBTi.
On receipt, an organisation will receive a confirmation email and will be recognised as “committed” on SBTi’s website, as well as their partner websites We Mean Business and UN Global Compact.
Step 2: Develop
As of 15 July 2022, organisations must set a near-term SBT between 5 to 10 years which aligns with the level of decarbonisation required to keep global warming to 1.5°C (previously targets could align with 2°C warming).
Prior to setting SBTs, organisations will need to ensure that they are inventorying their scope 1, 2 and 3 emissions per the Greenhouse Gas (GHG) Protocol Corporate Standard. These then need to be verified by an external party.
SBTs must cover company-wide scope 1 and scope 2 emissions. If scope 3 emissions compose over 40% of total emissions, organisations must set a scope 3 target as well. Crucially, offset and avoided emissions do not count towards emissions reductions. Other things to consider are:
- The base year and target year you’ll use
- Where your organisational boundaries lie and how you’ll treat your subsidiaries
- Whether to set one target for all emissions or separate targets
- Whether to set an absolute or intensity target for scope 3 emissions
- Whether there are sector-specific considerations you need to take
- Whether to commit to a long-term target of net-zero, too.
More information on the above can be found in SBTi’s Corporate Manual. From 15 July 2022, you must use SBTi’s V5.0 criteria for target setting.
Step 3: Submit
Submit your target to SBTi for official validation. The results of the validation should be ready within 30 business days.
SMEs can immediately set a SBT for their scope 1 and 2 emissions by choosing from a set of predefined options. They are not required to set scope 3 targets.
Step 4: Communicate
Once approved, organisations will be listed on the SBTi website, as well as their partners’. SBTi provide guidelines on messaging you might use in your own communications and how the SBTi logo can be used.
Step 5: Disclose
Following approval, organisations must disclose emissions and progress against targets annually. This can include disclosure through annual reports or the company website. Again, SBTi provide guidelines on the information to include, as well as minimum standards that must be met.
Step 6: Recalculate
At a minimum, organisations must review their targets every 5 years to ensure they’re aligned with the latest climate science. They can choose to do this more frequently, if the target has been met, or if there are significant changes to company structure or activities.
Good Energy signed up to the SBTi in 2022. Information about our target can be found on our sustainability webpage.
