A record number of companies worldwide have started setting science-based targets and you don’t want to miss out. We’re exploring what steps you need to cover to implement the SBTi recommendations and looking at how other companies are already doing it.
What is the Science-Based Targets Initiative (SBTi)?
The Science-Based Targets Initiative (SBTi) is an organization focused on corporate climate action.
It is responsible for creating standards, tools, and guidance for emissions reduction targets. It also assesses and validates targets through its subsidiary and promotes best practices in emissions reduction and net-zero commitments.
SBTi goals:
- Limit global temperature rise to 1.5°C above pre-industrial levels.
- Achieve a net-zero and equitable economy by 2050.
- Drive science-based climate action in the private sector.
But what exactly are science-based targets?
Science-based targets provide a clearly defined pathway for companies to reduce greenhouse gas emissions in line with the goals of the Paris Agreement, specifically limiting global warming to 1.5°C above pre-industrial levels.
Imagine using these targets as cues to move a ship towards the right direction by relying on a detailed map. In our case, the map is the recommendation the SBTi puts forward and the destination is reducing emissions to mitigate climate change.
It’s important to note the organization’s proposals go beyond setting goals. We’ll explore a couple of steps for setting science-based targets in the following sections. At this point though, remember one of the primary objectives of the SBTi is to help organizations set goals that are directly informed by scientific evidence, ensuring companies are on the right path to address environmental challenges.
What are the benefits of setting science-based targets?
Before learning how to set them, let’s explore why they matter by looking at key benefits and potential results.
Positive climate impact
SBTI companies can achieve significant reductions in carbon emissions, contributing to global efforts to mitigate climate change by reducing emissions by nearly 11%.
Operational efficiency
Setting science-based targets leads to increased operational efficiency and reduced resource consumption, leading to cost savings such as operational cost reductions by 57% globally.
Competitive advantage
Companies with science-based targets can gain a competitive advantage with the help of a sustainability-driven mindset.This also implies they have a larger potential to attract environmentally conscious consumers, investors, and employees to penetrate nearly 40% of the market cap.
Regulatory compliance assurance
Adhering to SBTi targets can help companies comply with environmental regulations, reducing the risk of non-compliance issues. This is especially evident in regions with penetration falling from 50% to 48% year on year.
How to set science-based targets?
But the benefits for SBTi companies don’t end here. Here are the steps to set your own science-based targets. See how SBTi companies take action and achieve outstanding results.
Stay committed
Publicly committing to setting science-based targets is crucial for demonstrating dedication to mitigating climate change, with 77% of companies already committed to science-based targets.
Example: JAB was among the first investment firms to engage with the Science-Based Targets Initiative (SBTi) and set a 1.5°C-aligned target. To maintain transparency, JAB publishes annual and semi-annual reports detailing financial and ESG performance, including progress toward its SBTs.
Determine your baseline emissions
Assessing and establishing a baseline for emissions is essential in setting Science-Based Targets, with nearly 13% of companies already having validated targets.
Example: Tesco set its baseline year for emissions reductions as 2015, committing to reduce Scope 1 and 2 emissions by 60% by 2025 and 85% by 2030, relying on the 2015 baseline. This gave them a foundation for measuring progress and choosing achievable targets.
Keep stakeholders engaged
Involving key stakeholders in the target-setting process is important for gaining support and buy-in, with 49% of companies having already committed to the Science-Based Targets Initiative
Example: Salesforce engages stakeholders by requiring suppliers to set science-based targets through its Sustainability Exhibit, offering resources like training programs, supplier guides, and a CDP Supply Chain membership. It prioritizes suppliers based on emissions, climate impact, and strategic goals, while monitoring progress through the SBTi Target Dashboard and annual third-party reviews.
Handle implementation and monitoring
Implementing strategies, monitoring progress, and reporting on achievements are natural steps in meeting science-based targets.
Example: H&M Group monitors progress monthly using supplier energy data, verified quarterly by a third party, and integrated into buying decisions. The company also collaborates with governments and international institutions to improve renewable energy access in production markets, ensuring long-term impact and alignment with its 2030 Scope 3 GHG reduction target.
Validate it all
Seeking validation shouldn’t be overlooked, especially as different regions show different levels of penetration and growth in absolute terms.
Example: AB InBev, a global leader in food and beverage processing was part of a pilot program for validating science-based targets for nature. The validation process included assessing operations, identifying priority areas, and submitting targets for review to meet scientific standards.
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