Understanding Science-Based Climate Targets: A Path Towards Sustainable Business  

Written by Poppy Stringer
April 17, 2024
5 min read

The pressing issue of climate change has become a huge concern for businesses across various sectors, compelling them to prioritise sustainability in their operations. To effectively tackle this challenge, companies are increasingly adopting Science-Based Targets initiatives (often referred to as SBTIs). This approach allows them to establish and pursue sustainability objectives that are in line with what is needed to curb global warming and reduce their environmental footprint.

What is the Science-Based Targets Initiative (SBTi)?

The SBTi is a collaborative effort between CDP, the United Nations Global Compact, the We Mean Business Coalition, the World Resources Institute (WRI), and the World Wide Fund for Nature (WWF). It empowers companies and financial institutions to set ambitious greenhouse gas (GHG) emissions reduction targets aligned with climate science. By adhering to the SBTi's criteria, organisations can play a pivotal role in limiting global warming and transitioning to a low-carbon economy. 

(SBTi) Inception and Evolution:

Founded in 2014 to encourage companies to commit to setting GHG emissions reduction targets aligned with climate science, the SBTi has evolved significantly over the years. In 2022, it announced plans to incorporate as an independent entity to strengthen governance and accommodate the growing demand for science-based targets. Moreover, the SBTi continually updates its standards and guidance to reflect the latest scientific evidence and industry best practices.

Their mission? 

To arm companies with the tools and knowledge they need to set emission reduction targets that are firmly rooted in the latest climate science. It's like giving businesses a roadmap to sustainability, showing them exactly how they can do their part in the fight against global warming. 

What exactly are these science-based Based Targets?

According to the official Science Based Targets website SBTIs provide a clear pathway for companies to reduce their greenhouse gas emissions in alignment with the Paris Agreement. (This agreement was adopted by 196 countries who committed to keep global temperature increase below 2 degrees Celsius by cutting greenhouse gas emissions). 

These targets are grounded in scientific research which is updated annually and are based on what is deemed necessary to keep global warming to a minimum. These targets ensure businesses play an effective role in combating climate change and limiting global warming to 1.5 degrees Celsius. 

The companies involved with the STBi set their targets with guidance from the Initiative and there are currently over 4,000 businesses that are working with the SBTi to lead the way to a low-carbon future.

Setting Science-Based Targets

Central to the SBTi's mission is the establishment of science-based targets, which are aligned with the objectives of the Paris Agreement. These targets encompass various criteria, including timeframe, boundary, level of ambition, and reporting. Companies have 24 months to set their targets, covering at least five years, and must disclose GHG emissions inventory annually.

The process of setting science-based targets begins with a commitment from the company, where they register online and submit a letter expressing their intent. Following this, the company develops its targets in line with the SBTi's criteria, utilising online resources and tools provided by the initiative. Once the targets are developed, they are submitted for validation, with the company completing relevant forms and selecting a validation date through the SBTi's Booking System. During validation, the company communicates with assigned technical experts and receives a validation decision with in-depth feedback. Upon approval, the company announces the target to stakeholders and ensures its public disclosure within six months. Finally, the company discloses progress annually, monitoring its journey towards achieving the science-based target through various reporting channels such as CDP, annual reports, sustainability reports, and their company website.

Develop a target

Once a company has showcased their interest in implementing science-based targets they have 24 months to develop a target. 

The STBi states that targets have to be made in line with the science-based criteria the SBTi has developed for that year. 

They advise companies to start by getting acquainted with the target development process outlined in the SBTi Getting Started Guide. 

Afterwards, it's essential to delve into the specifics of target setting by examining the criteria and recommendations in either the SBTi Criteria and/ or the Net-Zero Standard Criteria.

The next step is to use the target setting tool and the net zero tool offered on their website to develop the targets in more depth. 

Discussion around SBTi

The Science-Based Targets Initiative (SBTi) has gained widespread recognition for its role in guiding companies towards setting emissions reduction targets aligned with climate science. undoubtedly, SBTi enhances credibility and accountability within the corporate sector by providing clear guidelines and validation mechanisms. This framework enables companies to demonstrate their commitment to sustainability, potentially gaining a competitive edge in an increasingly environmentally-conscious market.

Inherent Challenges of SBTi

However, there are inherent challenges associated with SBTi that warrant critical consideration. One such concern is the potential for a superficial approach towards target-setting, where companies prioritise meeting targets without implementing substantive emission reduction measures. This raises doubts about the efficacy of targets set under the initiative and their actual impact on emissions reduction. Moreover, while science-based targets may help mitigate certain risks linked to climate change, they may fail to address broader systemic issues such as unsustainable consumption patterns and resource inequities.

Focus on Short-Term Targets

Another aspect to ponder is the short-term focus on meeting targets, potentially overshadowing the necessity for long-term, transformative changes. Although innovation and efficiency improvements are often cited as benefits of pursuing science-based targets, there is a risk of neglecting broader systemic issues that demand structural changes. Additionally, the competitive advantage gained by setting science-based targets may be transitory if companies struggle to attain their targets or if the targets lack sufficient ambition.

SBTi's Evolving Framework

Despite these concerns, the SBTi is evolving, with ongoing efforts to refine its standards and offer additional guidance, particularly concerning scope 3 emissions and carbon offsetting. As companies navigate the complexities of climate action, it remains imperative to critically evaluate the strengths and limitations of initiatives like the SBTi, ensuring they contribute meaningfully to global efforts to address climate change.

Scrutiny Over Dual Roles and Conflict of Interest

According to Reuters, the Science-Based Targets Initiative (SBTi) has come under scrutiny for its dual role as a standard setter and verifier, raising concerns about potential conflicts of interest. Critics argue that SBTi's business model, which ties revenue to validation growth, may diverge from the public interest, leading to questions about its impartiality. Bill Baue, senior director of the platform r3.0, highlighted this conflict in a letter to the U.S. House of Representatives Committee on Science, Space, and Technology. The forthcoming review of SBTi's corporate net-zero standard in 2024 reflects an acknowledgement of these concerns. Despite these criticisms, SBTi maintains mechanisms to hold companies accountable for their commitments. Validated companies are required to publicly disclose their greenhouse gas inventories and target progress annually. However, the initiative has not hesitated to remove commitments from its dashboard for companies deemed to have fallen short. This enforcement of accountability underscores SBTi's commitment to upholding rigorous standards and pushing participating companies to continuously improve their climate efforts.

The Controversy Over Carbon Offsets for Scope-3 Emissions

The recent controversy surrounding the Science-Based Targets initiative (SBTi) centres on its decision to permit the use of carbon offsets for Scope 3 emissions. This unexpected policy shift has sparked debate within the climate community and among SBTi staff, raising concerns about governance procedures and potential implications for the credibility of corporate climate action efforts. On one hand, proponents argue that the SBTi's decision to allow carbon offsets for Scope 3 emissions could provide much-needed flexibility and clarity for companies navigating emissions reduction efforts beyond their direct control. This change may incentivise innovation and investment in emissions reduction projects, ultimately accelerating progress towards global climate goals. However, critics raise valid concerns about the potential for this policy shift to undermine the scientific rigour and credibility of the SBTi. Questions regarding transparency, accountability, and the risk of greenwashing have been raised, highlighting the need for careful consideration and stakeholder engagement in setting climate standards. As the SBTi navigates this critical juncture, it faces the challenge of balancing corporate interests with the imperative for robust and credible climate action.

SkootEco offers a pragmatic viewpoint on the recent controversies surrounding the SBTi, recognising the multifaceted nature of climate action. While acknowledging the importance of transparency and scientific integrity in target-setting processes, SkootEco advocates for a balanced approach that includes the judicious use of carbon offsets. By allowing companies to counter their emissions before their SBTi commitment and while they are planning to make rigorous changes, carbon offsets can play a crucial role in accelerating climate action. Moreover, SkootEco highlights the broader social impacts of carbon offset projects, particularly in disadvantaged communities around the world. By contributing to carbon reduction projects globally, businesses can address not only their emissions but also support sustainable development and poverty alleviation efforts. SkootEco emphasises that achieving carbon neutrality requires more than just emission reduction and avoidance - it necessitates proactive engagement with carbon reduction initiatives on a global scale.

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Written by Poppy Stringer
April 17, 2024
5 min read