As the world faces the dire consequences of climate change, finding effective solutions to reduce greenhouse gas emissions is more urgent than ever. At this time, the concept of SBTi and its role has emerged as an important guideline to help businesses act more responsibly and effectively.
What is SBTi?
The Science Based Targets Initiative (SBTi) is a global collaborative initiative to accelerate business action on climate change. SBTi was established in 2015 by four respected organizations: the Carbon Disclosure Project (CDP), the UN Global Compact, the World Resources Institute (WRI), and the World Wildlife Fund (WWF). It provides a framework, standards, and tools for companies to set greenhouse gas emission reduction targets based on the latest climate science.
The core objective of SBTi is to ensure that business efforts are aligned with the Paris Agreement, namely to limit global temperature rise to 1,5°C – well below 2°C above pre-industrial levels. This includes:
- Direct emissions (Scope 1)
- Indirect emissions from energy use (Scope 2)
- Other indirect emissions (Scope 3), typically account for the largest proportion of a company's carbon emissions.
Why is SBTi important and what benefits does it bring?
In the context of complex climate change, SBTi is not only an initiative but also a strategic tool that brings many practical benefits to businesses.
- In line with climate science: SBTi-guided targets are based on the latest scientific data and modelling, ensuring that businesses’ emissions reduction efforts are truly effective and aligned with the overall goals of the Paris Agreement. This creates a clear and credible pathway for businesses to meet their responsibilities.
- Enhance credibility and transparency: When a company publicly commits to and achieves SBTi goals, it builds trust with its stakeholders, from investors, customers to regulators. According to SBTi, 55% of companies that have implemented the initiative feel more confident in their competitiveness.
- Bring competitive advantage: Companies that are pioneers in sustainability can often enhance their brand reputation, attract environmentally conscious customers, and easily access ESG (Environmental, Social, and Governance)-focused investment capital.
- Risk management: Climate change brings both physical risks (natural disasters, supply chain disruptions) and transition risks (policy changes, carbon pricing). Therefore, proactively setting targets through SBTi helps businesses reduce uncertainty and better prepare for future changes.
- Promote internal innovation: To achieve emissions reduction targets, companies are forced to look for innovative solutions, improve production processes and adopt green technologies. Nearly 63% of ESG businesses said SBTi has driven innovation within their organization, while also delivering benefits in terms of energy and resource cost savings.
How does SBTi work?
SBTi categorizes the target setting process into two main groups: Small and Medium Enterprises (SMEs) and Large Companies/Financial Institutions. While SMEs may adopt a simpler process, large companies need to follow a detailed 5-step process to ensure the accuracy and rigor of targets.
The 5-step process for large companies and financial institutions is as follows:
- Step 1 - Commit: Businesses submit a formal commitment letter to SBTi through their platform. This commitment letter demonstrates the company’s intention to set a science-based emissions reduction target. Once committed, the company has 24 months to complete and submit the target for validation.
- Step 2 - Develop: Once committed, businesses can start developing their emissions reduction targets in line with SBTi’s rigorous criteria. Guidance documents such as the “Getting Started Guide” and “SBTi Criteria” and supporting tools will help companies shape their targets in a scientific and realistic way.
- Step 3 - Submit target for confirmation: Once targets have been developed, businesses submit their proposals to SBTi’s expert panel for review and endorsement. This process ensures that targets are set in line with the latest scientific standards. SBTi also provides detailed support and feedback if required.
- Step 4 - Communicate: Once approved by SBTi, the company's goals will be made public. At the same time, these goals will also be posted on SBTi's website and its partners, helping to enhance credibility and demonstrate transparency to stakeholders.
- Step 5 - Disclose: Businesses are responsible for publicly reporting their progress on emissions reductions annually. This can be done through sustainability reports, annual reports or reporting platforms such as CDP, which help stakeholders track the company’s progress towards achieving its goals.
Current status and achievements of SBTi
The Science Based Targets initiative is proving to be a huge success on a global scale. The growth in the number of companies joining SBTi is a clear testament to its effectiveness.
By April 2025, more than 10.000 companies worldwide had committed to or set science-based emissions reduction targets, including 7.502 with SBTi-endorsed targets and 1.666 with Net-zero targets. In 2022 alone, SBTi recorded outstanding growth with 1.097 new registrations, a figure greater than the total number of businesses in the previous seven years combined. This shows a strong shift in the business community’s perception of their role in the fight against climate change.
These efforts have yielded significant results. In 2021, SBTi participants reduced CO2 emissions by 53 million tonnes, and this is expected to reach 76 million tonnes by 2022. Prominent examples of companies that have committed to SBTi include Microsoft, Unilever, IKEA, PepsiCo and Abercrombie & Fitch. In Asia, Japan is the leading country in terms of registrations, and Vietnam is also actively responding to this initiative.
Other achievements SBTi has made include:
- Wide participation: The initiative has created a wave of positive action, inspiring thousands of businesses globally.
- Big impact: SBTi is contributing significantly to the reduction of greenhouse gases, helping to limit global temperature rise.
- Encourage innovation: The initiative promotes the development of technology and changes the perception of sustainability in businesses.
- Close monitoring: SBTi publishes annual progress reports and updates them continuously on a detailed dashboard, ensuring transparency and accountability of member companies.
SBTi has been playing a key role in transforming the way businesses operate, turning climate goals from theory into concrete action.
Challenges and opportunities for businesses participating in SBTi
Participating in the Science Based Targets Initiative (SBTi) offers many opportunities but also comes with certain challenges, particularly for businesses in high-emission sectors or with complex supply chains.
Challenge:
- Investment and innovation: Achieving the expected emissions reduction targets will require significant investments in technology, processes and infrastructure. This requires strong financial resources and a willingness to innovate radically.
- Complexity of the process: The target submission and validation process can be lengthy and resource intensive, especially for large businesses.
Opportunity:
However, the benefits of SBTi far outweigh the challenges. When businesses overcome these obstacles, they can reap huge rewards:
- Enhanced reputation: Becoming a pioneer in sustainability will strengthen your brand reputation and attract customers and partners.
- Risk Mitigation: Proactively managing climate risks helps businesses better adapt to future changes in regulations and markets.
- Increase investor confidence: SBTi compliance demonstrates a company's financial stability and long-term vision, helping to strengthen investor confidence.
- Access to new markets: Demand for sustainable products and services is growing. By joining SBTi, businesses can expand their market share and access new markets.
End
In short, what SBTi is is not just a question of definition, but also a solution to the problem of how businesses can both develop economically and contribute to the common effort for a green planet. This initiative is not only an environmental commitment but also a comprehensive business strategy, helping companies develop sustainably in a rapidly changing world. The challenges of participating in SBTi are real, but the strategic benefits and opportunities it brings far outweigh these obstacles, turning participating businesses into pioneers, leading the sustainable trend.