Introduction to Science-Based Targets
In the face of escalating climate challenges, the emergence of Science-Based Targets (SBTs) offers a structured, data-driven framework for corporate contributions to global climate goals. As firms grapple with the realities of a carbon-constrained world, SBTs stand out as both a moral obligation and a strategic advantage.
But what are these targets, and why do they matter to the future of business and the planet? This insight delves into the Science-Based Targets initiative (SBTi), the principles, methodologies, and the profound implications they could have for humanity and the environment.
Defining Science-Based Targets (SBTs)
The Origins of Science-Based Targets
The 2015 Paris Climate Change Agreement established a common goal of limiting the increase in global average temperature to well below 2°C, above pre-industrial levels and striving to restrict the increase to 1.5°C. Achieving the goal of limiting warming to 1.5°C or well below 2°C necessitates countries consistently reducing emissions over the next two decades, phasing out carbon emissions, and investing in permanent carbon removals.
Recognising the gap between the level of ambition required to reach the Paris goals and the level of ambition being shown in the corporate sector, the Science Based Targets Initiative (SBTi) was established by the Carbon Disclosure Project (CDP), UN Global Compact (UNGC), World Resources Institute (WRI), and the World Wide Fund for Nature (WWF) in 2015. Its purpose is to encourage corporate efforts towards the shared climate objective of stopping the rise in global temperatures
The purpose of Science-Based Targets (SBTs)
The main objective of the Science-Based Targets (SBTs) is to achieve the climate targets set in COP21 within the Paris Agreement. Primarily, this is to limit the temperature increase to below 2°C or even 1.5°C.
The SBT approach to climate action is based on scientific evidence and the principles of urgency and ambition. SBTs are emission reduction targets that align with the latest climate science, ensuring that the world stays on track to limit global warming.
The Science Behind Science-Based Targets
Grounded in climate science
The science of climate change indicates that global greenhouse gas emissions must reach Net Zero to stabilise global temperatures, whether at +2°C, +3°C, or any other level. To keep warming below 1.5°C, Net Zero would need to be achieved by around 2050, or by approximately 2070 to keep warming well below 2°C.
As a result, Science Based Targets (SBTs) usually involve setting ambitious goals for reducing greenhouse gas emissions across all sectors of the economy. These targets are informed by the latest climate science and are often consistent with long-term decarbonisation trajectories outlined in Intergovernmental Panel on Climate Change (IPCC) assessments and other scientific research.
By incorporating scientific knowledge about the causes and effects of climate change, SBTs offer a sturdy framework for establishing emission reduction targets that align with global climate objectives.
Comprehensive scope and coverage
SBTs are forward-looking, aligned with planetary boundaries and societal long-term goals, cover the most relevant impacts and risks within a company’s value chain, and are formulated within a timeframe that drives action and creates accountability.
SBTs encompass all scopes of emissions, including direct emissions (Scope 1), indirect emissions from purchased electricity (Scope 2), and indirect emissions from the value chain (Scope 3). This comprehensive approach ensures that emissions reduction efforts address the full range of activities and sources within an organisation's influence.
Why should companies sign up to Science-Based Targets (SBTs)?
For businesses, adopting SBTs is not merely a question of corporate responsibility—it is a strategic necessity. The benefits span financial, operational, and reputational domains:
Strategic and financial benefits:
Competitive advantage: setting and achieving SBTs can differentiate a company from its competitors, demonstrating leadership in sustainability and attracting environmentally conscious customers.
Investor confidence: investors increasingly prioritise companies with robust sustainability commitments. SBTs provide a credible framework that can enhance investor confidence and attract capital.
Regulatory preparedness: governments and regulators are progressively implementing stricter climate policies. SBTs help companies stay ahead of regulatory requirements and reduce the risk of non-compliance penalties.
Operational and risk management benefits:
Cost savings: energy efficiency and sustainable practices can lead to significant cost savings in operations, reducing waste, energy consumption, and resource use.
Risk mitigation: climate-related risks, including physical risks from extreme weather and transitional risks from shifting markets, can be mitigated through proactive climate strategies aligned with SBTs.
Reputation and market position:
Enhanced reputation: commitment to SBTs boosts a company’s reputation among stakeholders, including customers, employees, and partners, fostering loyalty and trust.
Attracting talent: employees, especially younger generations, prefer to work for companies with strong environmental commitments. SBTs can help attract and retain top talent.
Environmental and social responsibility:
Contribution to global goals: by aligning with SBTs, companies contribute to global efforts to limit warming to 1.5°C or well below 2°C, playing a crucial role in combating climate change.
Positive impact: companies can make a tangible positive impact on the environment, supporting sustainability goals and contributing to a healthier planet for future generations.
By committing to SBTs, companies not only help address climate change but also unlock multiple strategic, operational, and reputational benefits, positioning themselves for long-term success in a rapidly changing world.
Setting Science-Based Targets: Principles and Best Practices
Requirements of Science-Based Targets (SBTs)
The SBTi originally aligned its criteria to require companies’ Scope 1 and 2 science-based targets to limit global warming to 2°C above pre-industrial levels. As the science has evolved, the SBTi has updated its requirements.
The current level of reductions required for Scope 1 and 2 targets is aligned to well below 2°C. The SBTi announced that it was “raising the bar” by requiring companies to align with 1.5°C from 15 July 2022. This change is due to the increasing urgency for climate action and the success of science-based targets to date.
The recognition that reaching net zero by 2050 will require emissions reductions at a greater speed and scale has also driven this change. Following these updates, the ambition temperature for Scope 3 will move from 2°C to well below 2°C. Furthermore, the timeframe for meeting the targets will be shortened; from 15 July 2022, it will be ten years instead of five to 15 years from the baseline.
Science-Based Targets (SBTs) vs Net Zero
SBTs set the goal for reductions that a business needs to make to align with the Paris Agreement, while a Net Zero target builds on a science-based target to define long-term actions required for a company to align to a 1.5°C pathway.
A Net Zero target includes reducing Scope 1, 2, and 3 emissions on a scale consistent with limiting warming to 1.5°C by no later than 2050 and offsetting any remaining emissions through permanent carbon removals.
Transforming Business Through Ambition
The implementation of SBTs requires senior leadership buy-in and cross-functional collaboration. Targets must integrate into core strategies, guiding decision-making and resource allocation. Moreover, businesses are expected to communicate their progress transparently, building credibility and inspiring others to act.
By committing to SBTs, companies signal their intent to drive systemic change. They move beyond the rhetoric of sustainability to measurable action, contributing meaningfully to the global climate effort.
The Imperative of Science-Based Targets: Why They Matter
Aligning with global climate goals
SBTs play a crucial role in aligning corporate and societal actions with global climate goals, as outlined in the Paris Agreement and the latest United Nations IPCC reports. By setting targets that are consistent with the level of carbon dioxide emission reductions needed to limit global warming to well below 2 degrees Celsius, SBTs contribute to the collective effort to mitigate climate change and safeguard the planet for future generations.
Driving innovation and transformation
SBTs serve as catalysts for innovation and transformation, inspiring organisations to rethink business models, develop new technologies, and explore sustainable solutions as an alternative to burning fossil fuels. By setting ambitious targets and committing to emissions reductions, organisations can unlock new opportunities for growth, competitiveness, and resilience in a carbon-constrained world.
Enhancing Transparency and Accountability
SBTs also promote transparency and accountability by providing clear, measurable targets for emissions reductions and progress tracking. By publicly committing to SBTs and reporting on their progress, organisations demonstrate their commitment to climate action, build trust with stakeholders, and inspire others to follow suit.
Conclusion: embracing the potential of Science-Based Targets
The adoption of Science-Based Targets represents more than a contribution to global climate goals—it is a fundamental shift in how businesses navigate an era of uncertainty. At stake is not only the stability of the planet but also the resilience and profitability of the firms that operate within it.
In embracing SBTs, corporations demonstrate ambition and accountability, aligning their strategies with scientific reality. As the economic and environmental costs of inaction mount, Science-Based Targets offer a roadmap for firms to innovate, thrive, and lead in the transition to a sustainable future.
