La climate crisis It is rapidly pushing our planet towards points of no return. According to the report of Global Tipping Points presented at COP28, five critical thresholds are likely to be overcome already in the short term, including the melting of permafrost and the collapse of ice sheets.
To address this challenge, the role of firms is central. It is in this context that the Science Based Targets initiative (SBTi), a key tool for guiding the private sector towards a decarbonization effective, credible and aligned with science.
What is the SBTi in detail? What does it provide and what are the ways to join it?
Let's find out in this article.
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What is SBTi
La Science Based Targets initiative (SBTi) was created with the aim of leading the private sector in a concrete climate action and aligned with science.
Launched in 2015 From a coalition of international actors (CDP, UN Global Compact, World Resources Institute - WRI, WWF and We Mean Business Coalition) the SBTi provides a clear and validated framework to help companies define Objectives of reduction of emissions of greenhouse gases (science-based targets), consistent with the most up-to-date scientific evidence on climate.
The mission of the initiative is to translate the commitments of Paris Agreement in business operational strategies, capable of maintaining the Global Warming well below 2°C, ideally aiming at 1.5°C. Companies that adopt a path approved by SBTi define decarbonization plans robust, transparent and credible, which go beyond mere regulatory compliance and are part of a logic of climate responsibility and long-term competitiveness.
In this process, the concept of Carbon Neutrality Give way to the more ambitious one of Net Zero, where the reduction of emissions is a priority, while the CO compensation2 concerns only those residual and inevitable activities, especially in Hard to Abate sectors (steel industry or air and maritime transport).
These emissions are offset through Carbon removal projects certificates, both of type Nature-Based (such as reforestation) that Technology Based (such as Carbon Capture and Storage).
Joining the SBTi, therefore, does not only mean committing to the climate, but it means choosing to promote corporate sustainability in business strategies and move towards a more resilient future, transparent and competitive.
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What does the SBTi ask to companies
Fast and significant reduction in emissions
Starting from July 2022, the Science Based Targets initiative has reinforced its criteria, asking that the targets for reducing direct emissions (Scope 1) and indirect from purchased energy (Scope 2) are compulsorily aligned with the more ambitious objective ofParis Agreement: contain the increase in the global average temperature by +1.5°C by 2100.
According to the IPCC, to succeed in this intent it is necessary reduce global emissions of CO₂ of 45% by 2030 compared to 2010 levels, and reach climate neutrality by 2050. A goal that requires rapid and profound transformations in key sectors such as energy, land use, transport, urban infrastructure and industry.
To make these more concrete and operational transformations, the SBTi stresses the importance of not limiting itself to setting goals that are far away in time, such as those to 2050, but also to establish medium-term target, over time horizons between 5 and 10 years from the date of submission of the plan.
A goal for 2050, in fact, risks Remain abstract if it is not accompanied by a clear, credible and feasible decarbonization plan in the short term.
For this reason, the definition of targets must include:
- precise timing, that make the path transparent and trackable;
- Amount of consistent emission reductions with the scientific scenarios developed by the IPCC and by sectoral bodies such as the IEA (International Energy Agency).
Only in this way can business strategies be truly aligned with a effective and credible mitigation path, making a concrete contribution to keeping the global climate trajectory within safe limits.
Reduction of emissions and not offsets
According to the Science Based Targets initiative (SBTi), reducing emissions means undertaking a progressive and measurable reduction path of greenhouse gases generated along its value chain.
In this context, reduction techniques do not include the techniques of Greenhouse gas removal from the atmosphere, such as the restoration of natural ecosystems or reforestation activities. They don't even include the compensation projects made outside of their own operating perimeter, known as Beyond Value Chain Mitigation (BVCM).
These strategies classified as offsets, while not contributing to direct achievement of reduction objectives established by SBTi, as they are not included in the inventory of Scope 1, 2 or 3 emissions, are in any case Encourage.
In fact, the SBTi promotes the use of BVCM as a form of voluntary commitment and additional, useful for financing innovative solutions for the reduction, removal and storage of greenhouse gases in other sectors of the economy, accelerating climate transition on a global scale.
This distinction is based on what has been stated by the scientific community.
The IPCC has in fact highlighted that the ability to remove CO₂ From the atmosphere it is limited, both from a technical point of view and from an environmental and social point of view. The use of these solutions must therefore secretive to those sectors, such as agriculture or aviation, in which the technological alternatives for direct reduction are still inaccessible or economically unsustainable.
In summary, the path to Net Zero must be built first of all through the direct reduction of emissions, along the entire value chain.
Even if a company decides to invest in external projects, for example by financing plants that produce renewables in other countries, these interventions cannot replace the commitment to internal decarbonization, which remains the essential pillar of the climate transition.
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The 5 phases of the SBTi membership process for large companies
For large companies and financial institutions that wish to see their emission reduction objectives recognized, such as “science-based”, SBTi has defined a standard path divided into 5 phases. Let's see what they are.
1. Commit
The first step is to submit a formal statement of commitment, with which the company communicates its intention to define reduction targets aligned with climate science. This act represents official adherence to the initiative.
2. Develop
Once the commitment has been signed, the company is called to develop your targets using one of the two approaches envisaged by SBTi.
- Absolute contraction approach: requires an overall quantitative reduction in greenhouse gas emissions over a given period. This is the recommended standard method for most industries.
- Approach based on intensity metrics: it allows you to set targets according to efficiency, i.e. the emissions generated per unit of output, and is designed for those sectors where absolute reduction margins are more complex to define.
For some specific areas (such as cement, steel, energy, maritime transport, clothing, ICT, FLAG, financial institutions), SBTi has already published sectoral guidelines. For others, such as aviation, real estate, road transport, chemistry and oil & gas, guidelines are being developed. Companies belonging to sectors not yet covered can still proceed following the general methodologies indicated by SBTi.
3. Submit
The organization has at its disposal 24 months from the signing of the declaration of commitment to define and submit your own reduction targets. After submission, the SBTi validation team analyzes its consistency with the established scientific criteria. The outcome of the trial is announced by 30 working days.
4. Communicate
Once approved, the objectives must be Publicly announced. At the same time, SBTi publishes them on its website, in the section dedicated to participating companies, ensuring transparency and visibility of the path taken.
5. Disclose
Finally, the company is required to Report annually their emissions and the progress made with respect to the approved targets. This step allows you to monitor the effectiveness of the route of decarbonization and ensures continuous alignment with the scientific trajectories indicated to contain global warming.
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The SBTi membership path for SMEs
To meet the difficulties that small and medium-sized enterprises (SMEs) may face compared to large companies, SBTi has planned a simplified membership path, less onerous both from a technical and administrative point of view.
According to the new definition adopted by SBTi, a company can access this path only if it meets all the following requirements:
- its total Scope 1 and Scope 2 emissions (location-based) do not exceed 10,000 tons of CO₂ equivalent per year;
- does not operate in the financial or oil & gas sectors;
- it is not subject to mandatory sectoral criteria based on intensity metrics defined by SBTi;
- it is not a subsidiary of a parent company whose activities, added together, would fall within the standard validation process.
In addition, the organization must comply At least 3 of the following 4 economic and structural conditions:
- less than 250 employees;
- total assets of less than 25 million euros;
- annual sales of less than 50 million euros;
- do not belong to a FLAG sector with the obligation of specific targets.
Unlike the standard route, SMEs do not have to send a Preliminary statement of commitment. Instead, they can proceed directly with the definition of objectives, choosing from the predefined options in the simplified membership form.
Finally, it is not required that the objectives immediately include Scope 3 emissions: companies will simply have to commit to measuring and reducing emissions along their value chain over time.
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The 7 advantages for companies of joining SBTi
Adopting science-based objectives and formally joining the SBTi initiative does not represent only a commitment to Fight against climate change, but a strategic choice able to generate concrete value for the company. Here are the main benefits:
- Aligning with the ecological transition
Companies define a growth path consistent with global decarbonization objectives, actively helping to limit the increase in the global average temperature to +1.5°C. - Competitive advantage
Joining the SBTi reinforces the company's leadership in its sector, highlighting a concrete commitment to sustainability in the eyes of customers, investors, partners and institutions. - Improving reputation
The transparent and responsible approach required by SBTi helps to strengthen the organization's brand reputation and credibility in the medium to long term. - Investor confidence
The commitment to science-based paths increases the company's attractiveness for investors, who are increasingly attentive to sustainability as a strategic criterion for evaluation and selection. - Innovation and openness to new markets
The definition of ambitious targets stimulates the development of innovative solutions, encouraging access to new business opportunities in a rapidly evolving economic environment. - Mitigating regulatory risks
Joining the SBTi allows you to anticipate future environmental regulatory obligations, reducing uncertainty and potential compliance costs. - Increased resilience and transparency
The obligation to monitor and report annually on progress with respect to the targets reinforces the internal culture of responsibility and allows the company to adapt more promptly to changes in the global context.
