In 2016, the Earth’s average temperature was the warmest since recordkeeping began in 1880. That record was matched in 2020.
The scientific community holds that global warming must be capped at 1.5°C -2°C above pre-industrial levels to limit climate change. Science-based targets (SBTs) provide a clearly defined pathway for companies to reduce their greenhouse gas (GHG) emissions—which contribute to the greenhouse effect and rising temperatures—and the Science-Based Targets initiative (SBTi) defines and promotes best practices to achieve those targets.
Science-Based Targets Initiative
Science-based targets show businesses how much and how quickly they need to reduce their GHG emissions to limit climate change. Reduction targets are “science-based” if they align with levels the scientific community deems necessary to meet the 1.5-2°C temperature-reduction target set by the 2015 Paris Agreement.
The SBTi is part of the World Resources Institute (WRI) Center for Sustainable Business and a collaboration between WRI, the CDP, the World Wildlife Fund (WWF) and the UN Global Compact.
The Science Based Targets initiative (SBTi):
- Defines and promotes emission-reduction best practices aligned with climate science.
- Provides technical assistance and expert resources to companies to set science-based targets.
- Provides independent assessment and validation of companies’ targets.
Why Should Companies Pursue Science-Based Targets?
In the Paris Agreement, world governments committed to curbing global temperature rise to 2°C above pre-industrial levels. In 2018, the Intergovernmental Panel on Climate Change (IPCC) warned that global warming must not exceed 1.5°C if we are to avoid the catastrophic impacts of climate change.
To achieve this goal, participants agreed that GHG emissions must be halved by 2030 and fall to “net zero”—meaning that emissions still being generated are offset by reduction of the same amount elsewhere—by 2050.
Benefits of Setting Science-Based Targets
More than 2,000 businesses and financial institutions are working with the SBTi to reach net-zero emissions, and that number is increasing rapidly. There are several benefits:
- Science-based targets have become the accepted benchmark for taking climate action.
- Pursuing emissions reduction drives innovation and shapes long-term business strategy.
- Reducing emissions in line with science reduces exposure to future carbon emissions-related regulation.
- Science-based carbon reduction is increasingly considered by financial institutions.
- Creating buy-in from stakeholders helps companies achieve their targets.
How Can Companies Set Science-Based Targets?
Companies should set emissions-reduction targets endorsed by the SBTi that are consistent with the best available science. The procedure begins with defining a representative set of emissions scenarios that are considered plausible, responsible, objective, and consistent with the goal of satisfying the global 1.5-2°C reduction target, on the way to achieving science-based net-zero targets by 2050.
SBTs can be divided into near-term, long-term, and net-zero target objectives.
These targets consider how companies will reduce their emissions over the next 5-10 years and prompt actions required for achieving significant emissions reductions by 2030. Near-term targets are also a prerequisite for companies wishing to set net-zero targets.
These targets indicate how companies will achieve net zero according to the SBTi’s Corporate Net-Zero Standard criteria. Most organizations will need to reduce emissions at least 90% to reach net zero. These targets must be achieved no later than 2050 (2040 for the power sector).
These encompass both near-term and long-term targets. Companies wishing to set net-zero targets under the Corporate Net-Zero Standard have both near- and long-term targets validated by the SBTi.
Setting a science-based target is a five-step process:
- Commit: Submit a letter establishing intent to set a science-based target.
- Develop: Work on an emissions-reduction target in line with SBTi criteria.
- Submit: Present defined targets to the SBTi for official validation.
- Communicate: Announce targets and inform your stakeholders.
- Disclose: Report company-wide emissions and track target progress annually.
What is the Corporate Net-Zero Standard?
The Corporate Net-Zero Standard was developed to guide businesses toward net zero in a way that is consistent with societal climate and sustainability goals and within the biophysical limits of the planet. Net zero has rapidly moved to the mainstream: A growing coalition of countries, cities, businesses and other institutions is pledging to get to net-zero emissions. More than 70 countries, including the biggest polluters, have set a net-zero target, covering about 76% of global emissions. In 2019, net-zero pledges covered just 16% of the global economy, and by 2021, nearly 70% had committed to achieving net zero by 2050.
Launched in October 2021, the SBTi’s Corporate Net-Zero Standard gives companies a science-based framework for defining ambitious climate targets with a long-term goal of achieving net-zero emissions. Development of the Net-Zero Standard followed a thorough, inclusive and transparent process, emphasizing input and expertise from a diverse range of stakeholders and close consultation with an independent Expert Advisory Group of professionals from academia, civil society, science and business.
For private-sector organizations to take the large-scale action needed to achieve the Paris Agreement objectives, businesses need a common, robust and science-based understanding of net zero. Otherwise, they risk following pathways that may be inconsistent with addressing the climate crisis and the sustainability goals that the international community has agreed to pursue.
The SBTi launched the Corporate Net-Zero Standard to ensure that companies’ net-zero targets translate into action that is consistent with achieving a net-zero world by no later than 2050. The Corporate Net-Zero Standard includes the guidance, criteria, and recommendations companies need to set science-based, net-zero targets consistent with limiting global temperature rise to 1.5°C. The Net-Zero Standard gives business leaders clarity and confidence that their near- and long-term targets are aligned with climate science.
How Does the Corporate Net-Zero Standard Work?
Despite the expansion of net-zero pledges in recent years, the definition of net zero itself—as well as the path to get there—has been interpreted in different, and often inconsistent ways. In the absence of a common definition, targets can differ in terms of the sources of included emissions, the depth and speed at which emissions are reduced, and the timeframe of the target. This has fueled confusion and accusations of greenwashing. The Corporate Net-Zero Standard addresses this problem by providing a clear, science-based definition of net zero.
Corporate net-zero targets must consider Scope 1 and Scope 2 emissions, according to the Greenhouse Gas Protocol Standards. A company’s targets must focus on emission reductions within its own value chain. Offsets and avoided emissions are not counted toward the targets; they represent a voluntary option and an additional commitment to paying a financial contribution toward emission reductions beyond the science-based targets.
How Sphera Can Help
With over 30 years of experience in conducting corporate and product carbon footprints and evaluating suitable reduction measures, Sphera’s sustainability consultants can help your business define its science-based targets strategy. Sphera consultants also bring deep sector and material knowledge and a long-term relationship with the CDP and SBTi to support your strategy development.