Setting a carbon reduction target is easy. Setting one that is credible, verifiable, and aligned with what climate science demands is significantly harder. That is where science-based targets come in. They provide a framework for companies to set emissions reduction goals that are consistent with limiting global warming to 1.5 degrees Celsius above pre-industrial levels. Here is what you need to know.
What Are Science-Based Targets?
Science-based targets (SBTs) are greenhouse gas emissions reduction targets that are in line with the level of decarbonisation required to keep global temperature increase below 1.5 degrees Celsius, as outlined in the Paris Agreement. They are validated by the Science Based Targets initiative (SBTi), a partnership between the Carbon Disclosure Project (CDP), the United Nations Global Compact, the World Resources Institute (WRI), and the World Wide Fund for Nature (WWF).
Unlike arbitrary targets such as "reduce emissions by 20% by 2030," science-based targets are derived from climate models and carbon budgets. They answer a fundamental question: how much and how fast does your company need to reduce emissions to do its fair share in limiting warming to 1.5 degrees?
A science-based target is not a pledge. It is a commitment to a specific reduction pathway, verified by an independent body against the latest climate science.
Why Science-Based Targets Matter
The case for SBTs extends well beyond environmental responsibility:
- Investor confidence: Institutional investors increasingly view SBT commitment as a proxy for climate risk management maturity. Companies with validated targets attract more favourable ESG ratings and lower cost of capital.
- Regulatory alignment: As frameworks like CSRD require companies to disclose transition plans, having an SBTi-validated target demonstrates credible intent and provides a structured roadmap.
- Customer expectations: Large companies with their own SBTs increasingly require their suppliers to set targets too, creating a cascade effect through supply chains.
- Competitive advantage: Over 8,000 companies worldwide have committed to or set science-based targets. Those without risk being seen as laggards by stakeholders.
- Operational savings: The process of setting and pursuing SBTs often reveals efficiency opportunities that reduce both emissions and costs.
The SBTi Validation Process
Getting your targets validated by SBTi involves several steps. The process has evolved considerably since the initiative's early days and now follows a more structured and rigorous pathway:
Step 1: Commit
Submit a commitment letter to SBTi indicating your intent to set a science-based target. This places your company on the SBTi's public commitment registry. You then have 24 months to submit your target for validation.
Step 2: Develop your target
Using SBTi's criteria and tools, develop targets that cover at minimum your Scope 1 and Scope 2 emissions. If your Scope 3 emissions account for more than 40% of your total footprint, which is the case for most companies, you must also set a Scope 3 target.
SBTi provides target-setting tools and methodologies, including:
- Absolute contraction approach: Reduce absolute emissions by a fixed percentage, regardless of business growth.
- Sectoral decarbonisation approach: Targets are set based on the emissions intensity pathway for your specific sector.
Step 3: Submit for validation
Submit your proposed targets along with supporting documentation, including your GHG inventory, base year data, and target boundary descriptions. The SBTi's Target Validation Team reviews submissions against their published criteria.
Step 4: Communicate
Once validated, your targets are published on the SBTi website. You are expected to report progress against your targets annually through CDP or equivalent disclosure mechanisms.
Near-Term vs Long-Term Targets
SBTi distinguishes between two types of targets, and understanding the difference is crucial:
Near-term targets (5-10 years)
These targets cover the next 5 to 10 years and represent the immediate action your company must take. For a 1.5-degree pathway, SBTi requires companies to reduce Scope 1 and 2 emissions by at least 4.2% per year (absolute contraction). Near-term targets must be set from a base year no earlier than two years prior to the date of submission.
Long-term targets (by 2050)
The SBTi's Corporate Net-Zero Standard requires companies to set long-term targets to reduce emissions by at least 90% across all scopes by 2050 at the latest. The remaining 10% or less may be addressed through permanent carbon removal. This is a critical distinction: SBTi does not accept offsets as a substitute for actual emissions reductions within the target boundary.
Net-zero is not about offsetting your way to zero. It is about reducing emissions by 90% or more and only using removal for the residual fraction that cannot be eliminated.
Sector-Specific Approaches
SBTi has developed sector-specific guidance for industries with unique characteristics:
- Financial institutions: Must set targets covering their financed emissions (Scope 3, Category 15), addressing the carbon intensity of their lending and investment portfolios.
- Power generation: Targets are typically set using the sectoral decarbonisation approach, reflecting the sector's unique decarbonisation pathway.
- Heavy industry: Sectors like cement, steel, and chemicals have intensity-based pathways that account for process emissions that are inherently difficult to eliminate.
- Transport: Includes sector-specific methodologies for aviation, shipping, and road transport.
For sectors without specific guidance, companies use the cross-sector methodology, which is applicable to most service-based and light manufacturing businesses.
How to Get Started
If your organisation is considering science-based targets, here is a practical roadmap:
- Build your GHG inventory: You cannot set targets without a comprehensive baseline. Ensure you have robust Scope 1, 2, and 3 data for your chosen base year.
- Conduct a screening: Assess the scale and composition of your emissions to understand which scopes and categories are most material. This determines which targets you need to set.
- Model reduction pathways: Use SBTi's tools to model different target levels and understand the implications for your business. Consider what operational changes, investments, and procurement decisions would be needed.
- Secure leadership buy-in: SBTs have real implications for capital allocation and business strategy. Ensure your board and executive team understand and support the commitment.
- Submit and communicate: Once your targets are developed, submit them for validation and begin communicating your commitment to stakeholders.
Noissime's target-setting module guides you through this entire process. With built-in SBTi pathway alignment, year-over-year progress tracking, and scenario modelling, you can set credible targets and track your progress in real time, all within the same platform you use for your carbon accounting.