How to Set SBTi Targets: A Comprehensive Guide
The Science-based Targets initiative (SBTi) is a global framework for companies to set greenhouse gas (GHG) reduction targets that align with the latest climate science and the goals of the Paris Agreement. Here’s an overview of key details from the SBTi guide:
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What is the SBTi?
SBTi is an organization that helps companies set science-based emissions reduction targets, specifically to limit global warming to 1.5°C above pre-industrial levels. Founded in 2015, it is a collaboration between the United Nations, WWF, World Resources Institute (WRI), and CDP. Since its inception, SBTi has grown in popularity, with over 2,000 companies committing to set SBTi-approved emissions reduction targets.
Types of Targets
- Absolute Targets: These involve reducing emissions regardless of production output.
- Intensity Targets: These set emissions reductions relative to business metrics like emissions per unit of product.
- Renewable Electricity Targets: These focus specifically on the use of renewable energy.
- Engagement Targets: These apply mainly to Scope 3 emissions and involve engaging with suppliers and customers.
SBTi Target Criteria
- Timeframe: Targets can be near-term (5-10 years) or long-term (up to 2050). Companies with net-zero ambitions must set both near- and long-term targets.
- Scopes: Companies must include Scope 1 (direct emissions), Scope 2 (indirect emissions from electricity), and Scope 3 (indirect emissions across the value chain) in their targets. SBTi strongly recommends that companies cover 95% of their emissions across Scopes 1 and 2, and at least 2/3 of Scope 3 emissions.
- Base Year: Companies must choose a base year after 2015, consistent across all targets, to establish a baseline for their GHG inventory.
Pathways for Targets
- Cross-sector Targets: Applicable to companies in industries without sector-specific guidelines.
- Sector-specific Targets (SDA): Available for certain sectors, like the food industry, where emissions reductions are linked to business-specific metrics (e.g., per unit of product).
- Forest Land and Agriculture Guidance (FLAG): Targets for companies in agriculture, food processing, and retail to address emissions until the farm gate.
SBTi Reporting Process
- Commit: Companies must commit by sending a letter to SBTi.
- Develop: Choose and develop the appropriate targets based on your company’s emissions profile.
- Submit: Submit the targets to SBTi for validation using the relevant tools.
- Communicate: Share your targets with the public.
- Disclose: Report your progress annually through SBTi or other reporting platforms.
Key Takeaways
- SBTi targets are validated based on scientific evidence to limit global warming to 1.5°C.
- Companies must develop near- and long-term targets, with regular revalidation every five years.
- SBTi’s matrix helps companies choose the right targets based on their emissions sources and industry specifics.
- A strong focus is placed on Scope 3 emissions, with engagement strategies and specific reductions required.
This initiative is essential for businesses committed to aligning their operations with global climate goals. Joining the growing number of SBTi-committed companies demonstrates corporate responsibility and helps mitigate the effects of climate change.
If you’d like to explore more ways to reduce your company’s carbon footprint or need assistance in setting Science-Based Targets, feel free to contact us at info@andoka.com. For more details on Andoka’s Science-Based Target Consulting services, click here.🌱