The Science-Based Targets Initiative (SBTi)

In recent years, companies have placed greater emphasis on establishing climate targets and putting in place strategies to lower emissions. Perhaps your company is doing the same? From developing a CO₂ reduction plan to calculating Scope 1, 2, and 3 emissions and defining a net-zero pathway, many businesses aim not only to comply with regulations such as the Corporate Sustainability Reporting Directive (CSRD) but also to contribute to global climate goals. 
The Science-Based Targets initiative (SBTi) has become the gold standard for companies looking to set credible, science-based reduction targets. In this blog, we explore what SBTi is and why it is recognised as the leading framework. We will also share our experiences of working with companies that have had their climate strategies validated by SBTi. 

 

What is the SBTi and why is it important? 

SBTi is a globally recognised framework that helps companies set emissions reduction targets in line with the Paris Agreement. It was developed in partnership with CDP, the UN Global Compact, the World Resources Institute (WRI), and WWF. The SBTi creates standards, tools, and guidance that enable companies to set greenhouse gas (GHG) emission reduction targets that are based on science and aligned with limiting global warming well below 2°C, with efforts to cap it at 1.5°C.  
The initiative also supports companies in developing credible Net-Zero transition plans, offering clear, science-backed pathways to reduce emissions across their entire value chain. As companies face increasing pressures from regulators and investors to act on climate, SBTi is crucial to help them demonstrate credibility and accountability in their sustainability efforts. 

Why should companies set science-based targets in 2025? 

In 2025, setting science-based targets is no longer a "nice-to-have" for businesses, it is a strategic necessity. The corporate landscape is shifting rapidly, with growing pressure from regulators, investors, and consumers demanding more transparent and effective climate action. 

• Demonstrating clear commitment: Setting science-based targets demonstrates a company’s commitment to addressing climate change, sustainability, driving innovation, improving operational efficiency, and enhancing brand reputation.
• Regulatory compliance: As climate regulations tighten, adopting science-based targets helps companies stay ahead of legislation such as the CSRD and the US SEC climate regulations, minimising risks, and avoiding penalties.  
• Competitive advantage: Setting science-based targets positions your company as a sustainability leader, helping you stand out from competitors and attract customers and partners who prioritise climate-conscious practices. In addition, the SBTi is largely aligned with other schemes such as CDP, which enables you to achieve higher scores. 
• Investor and stakeholder trust: Setting and aligning your company with science-based targets builds credibility with investors and customers, fostering trust and loyalty while securing long-term investment. 
• Resilience and cost savings: Companies with clear, science-backed targets are better equipped to navigate rising carbon pricing, regulatory fines, and supply chain risks. Research indicates that companies with a comprehensive climate change strategy predominantly perform significantly better than their competitors without such a strategy (link). Additionally, these targets often uncover efficiencies, which when addressed will reduce costs and improve operational resilience. 

As regulatory frameworks tighten and societal and market demands for climate action grow, companies aligning with the SBTi will be better positioned for long-term success. Committing to SBTi in 2025 not only ensures effective carbon footprint reduction but also provides a competitive edge in an increasingly dynamic global economy. 

How does SBTi process work? 

SBTi provides a structured five-step process to guide companies in setting and achieving science-based targets: 

1. Commit: Companies start by submitting a commitment letter to SBTi, indicating their intent to set science-based targets. This letter formalises the company's dedication to aligning its emission reduction efforts with climate science.  
2. Develop: In this phase, companies assess their greenhouse gas (GHG) emissions across Scope 1, 2, and 3. They then develop targets using SBTi's standards, tools, and guidance to ensure alignment with the latest climate science. Sector-specific guidance is available to assist companies in formulating appropriate targets.  
3. Submit: Once targets are developed, companies submit them to SBTi Services Limited for validation. This entity assesses and validates the targets against SBTi's criteria to ensure they are robust and science-based.  
4. Implement: After validation, companies integrate the approved targets into their business strategies and operations. This involves implementing emission reduction initiatives, monitoring progress, and ensuring alignment with the set targets. 
5. Report and review: Companies are encouraged to publicly disclose their progress annually. SBTi recommends that companies review and, if necessary, update their targets at least every five years to reflect advancements in climate science and any significant changes in company structure or activities.   

Minimum requirements 
To ensure companies set credible and impactful science-based targets, SBTi has established clear minimum requirements and reduction pathways aligned with the 1.5°C climate goal. 

• Near-term target requirement: Companies must set ambitious reduction targets to significantly cut emissions by 2030, aligned with the 1.5°C pathway.
• Base year requirement: Emissions must be measured from a clearly defined base year, ensuring consistency and accuracy in emissions data.
• Target validation: All targets must be validated by SBTi, ensuring alignment with the latest climate science and sector-specific methodologies.
• Scope 1 & 2: Reduce absolute emissions by at least 4.2% per year to stay on track with 1.5°C pathways.
• Scope 3: If Scope 3 emissions account for >40% of total emissions, companies must set targets covering at least 67% of Scope 3 emissions.
• Absolute emissions reduction: Reduce emissions by at least 90% across Scope 1, 2, and 3 before 2050.
• Minimal offsets: Companies should only neutralise unavoidable emissions using high-quality carbon removals—offsetting is not a substitute for real reductions. 

What is new in 2025? 

In 2025, SBTi has introduced several improvements to streamline the target-setting process: 

• Faster validation pathways for SMEs: Recognising the unique challenges faced by SMEs, SBTi has developed expedited validation pathways to support their climate action efforts.
• Sector-specific methodologies: To address industry-specific challenges, SBTi has introduced new methodologies tailored for sectors such as finance, real estate, and heavy industry. For example, the Finance Sector Science-Based Targets focus on aligning financial institutions with net-zero goals, while the Real Estate Sector Methodology offers strategies for emissions reductions for the buildings and construction sector. These tailored approaches ensure that each industry can take the most effective action. 

These updates reflect SBTi's commitment to making science-based target setting more accessible and relevant across diverse industries. 

Challenges and criticism of SBTi 

While SBTi is widely respected, some companies face challenges in adopting its targets: 

• Scope 3: Measuring emissions from the supply chain (Scope 3) remains a major hurdle. It is difficult to track emissions beyond a company’s direct operations, making full transparency tough to achieve.
• Sector-specific gaps: Although methodologies have improved, industries like finance, aviation, and agriculture still need more tailored solutions to effectively reduce emissions.
• Validation bottlenecks: As more companies adopt science-based targets, the validation process has slowed, causing delays for those eager to move forward with their targets. 

In 2025, SBTi is addressing these issues with new automated validation tools and sector-specific guidelines for Scope 3 emissions, making the process more efficient and accessible. 

What is next for SBTi?

In 2025, the SBTi is focusing on: 

• New sector guidance: Updated methodologies or drafts are expected for Apparel and footwear, Chemicals, Oil and gas, and Power sectors.
• Stronger net-zero standards: Stricter oversight of corporate offsetting claims.
• Faster target validation: AI-driven processes to reduce approval bottlenecks. 

Final thoughts: Is your company ready? 

Setting science-based targets is becoming a strategic necessity in today’s business landscape. With growing regulations, shifting market expectations, and an increasing focus on sustainability, aligning with SBTi and Net-Zero standards not only positions your company as a climate leader but also offers a competitive edge, builds trust with investors, and future-proofs your operations for long-term success. 

How we can help 

At 2Impact, we have experience in helping companies setting and validating their targets with SBTi. We conduct Scope 1, 2, and 3 emissions assessments, develop tailored measurement methodologies and reduction roadmaps, and support supplier engagement programs to drive emissions reductions across the value chain. With our expertise, companies can set credible climate goals, meet SBTi requirements, and take meaningful steps toward net-zero. 
If you would like to know more and explore how we could support your company with SBTi, please do not hesitate to get in touch with jonah@2impact.nl to have a first conversation.  

Link to our service "Strategy on Climate for businesses".