January 26, 2024
What is the Science-Based Target Initiative?

The Intergovernmental Panel on Climate Change (IPCC) issued a warning in 2018 that global warming must not surpass 1.5 degrees Celsius over pre-industrial levels in order to avert the most catastrophic effects of climate change. Businesses play a critical role in reducing greenhouse gas (GHG) emissions and developing a robust, zero-emissions economy based on science.

What is SBTi?

Science-based objectives explain to businesses how much and how rapidly they must decrease their GHG emissions to avoid the worst effects of climate change, putting them on a clear route to decarbonization. The Science Based Targets Initiative (SBTi) helps businesses combat climate change while reaping the advantages and increasing their competitiveness in the transition to a net-zero economy by helping them in the science-based objective formulation.

SBTi works in combination with two other mechanisms that dominate the corporate emissions reduction cycle the Greenhouse Gas Protocol and the CDP. Businesses use the former to measure and account for their carbon footprints to date. That's an important step before they can set a science-based target. To disclose their progress toward targets over time, they report yearly to the CDP. 

Companies all across the world are adopting a new strategy to carbon management that focuses on significant emissions reductions rather than inexpensive offsets. This strategy is important if we are to avoid the worst effects of climate change.

But how much carbon reduction is sufficient? And how can we tell if a corporation is working on a serious strategy or just a press release?

SBTi is both ambitious and rigorous, but it is also complex.

SBTi is quickly becoming the gold standard for providing an answer to this topic. They provide criteria for carbon reduction objectives (how much is enough?) and validate company targets. Their standards are severe: businesses must evaluate all pollutants and drastically cut them. Nearly 1,000 firms with more than 1 billion metric tons of CO2 emissions, or 2% of global emissions, have established their own Science Based Targets (or SBTs).

What is the aim of the initiative?

The Science Based Targets initiative (SBTi) encourages the commercial sector to take immediate climate action.

By supporting businesses in the development of science-based targets, we allow them to combat global warming while reaping the advantages and increasing their competitiveness in the transition to a zero-carbon economy.

The goal is for science-based goal setting to become the new normal, resulting in a thriving economy that is in harmony with the natural environment that nourishes us all.

Who is eligible to join the SBTi?

It encourages firms of all sizes and sectors to join the movement and commit to a science-based goal. It recognizes the distinctions across business areas, which is why they are creating sector-specific paths. The SBTi is especially eager to welcome enterprises from the highest-emitting industries, which are critical to securing the transition to a zero-carbon economy. Currently, the SBTi does not evaluate objectives for cities, local governments, public sector entities, educational institutions, or non-profit organisations.

What constitutes an SBTi?

At its heart, the SBTi framework is a strict set of criteria for determining whether carbon reductions qualify as a science-based goal. These criteria are comprehensive and intricate, and they differ per industry, but they are always based on a few essential concepts.

Begin with a temperature goal. The historic Paris Agreement, agreed in 2016 by over 200 countries, commits the globe to keep global temperature rise "well below" 2C. Since then, the UN IPCC has advocated for a 1.5C limit. Consider this the "red line" for global climate change. When a corporation establishes an SBT, it begins by deciding on a temperature objective and then works backwards to determine the emissions reductions required to meet that target.

Start reducing immediately. The reduction objectives must be met during the next 5-15 years. SBTi does not offer credit for long-term goals that will be too late to solve climate change and may be pushed to the next CEO. SBTs must be calculated based on your most current emissions inventory, which means no credit for earlier reductions.

Only reductions, no offsets. SBTi only grants credit for real carbon footprint reductions, not carbon offsets or avoided emissions.

Everything should be counted. Science-based goals consider all of a company's carbon emissions; SBTs must include 95% of Scope 1 and 2 emissions, as well as all Scope 3 emissions if they account for 40% or more of the total. 

While enterprises with 40% emissions are not obliged to have Scope 3 SBTi's at this time, the emissions must still be monitored, reported, and controlled.

We at Oren assist businesses in navigating this process; contact us if you and your organisation want to dive further and learn more about it.

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