What is Science-Based Targets?

What is Science-Based Targets?

Science-based targets (SBTs) are greenhouse gas emissions reduction goals aligned with the level of decarbonization required to limit global warming to 1.5°C above pre-industrial levels, consistent with the Paris Agreement. The Science Based Targets initiative (SBTi)—a partnership between CDP, the UN Global Compact, World Resources Institute, and WWF—validates corporate targets against peer-reviewed climate science and sector-specific decarbonization pathways.

Why It Matters

The SBTi has become the gold standard for corporate climate target-setting. By early 2026, over 7,000 companies across 90+ countries have committed to or validated science-based targets, representing more than one-third of global market capitalization. This adoption reflects a fundamental shift: climate targets are no longer arbitrary percentages chosen for marketing purposes but are grounded in what atmospheric physics demands.

Investors have been a primary catalyst. The Net Zero Asset Managers Initiative, representing over $65 trillion in assets, expects portfolio companies to set SBTs. Companies without validated targets face growing pressure during shareholder engagements and risk exclusion from ESG-screened investment products. Credit rating agencies now incorporate SBT status into forward-looking assessments of transition risk.

The SBTi's validation process imposes rigor that self-declared targets lack. Companies must demonstrate feasible reduction pathways, cover material emissions scopes, set near-term targets (5-10 years), and—for net-zero commitments—show how they will achieve 90%+ absolute reductions by 2050. Targets that rely excessively on offsets or omit significant Scope 3 categories are rejected.

Sector-specific pathways add further credibility. The SBTi has developed tailored guidance for financial institutions, power generation, forest and land use, and other sectors where generic approaches fall short. These pathways account for the unique abatement challenges and timelines facing different industries.

How It Works / Key Components

Companies begin by submitting a commitment letter to the SBTi, signaling their intent to develop targets within 24 months. The target development phase involves completing a greenhouse gas inventory, selecting a target-setting approach (absolute contraction or sectoral decarbonization), and defining the target boundary, base year, and target year.

The SBTi offers two primary target-setting methods. The absolute contraction approach requires economy-wide reductions of at least 4.2% per year for 1.5°C alignment. The sectoral decarbonization approach (SDA) uses sector-specific intensity pathways, allowing companies in hard-to-abate sectors to follow trajectories that reflect their unique technical constraints.

Scope coverage requirements are non-negotiable. Targets must cover all Scope 1 and 2 emissions. If Scope 3 emissions constitute 40% or more of total emissions—which is true for most companies—Scope 3 targets are also required, covering at least two-thirds of total Scope 3 emissions. This prevents companies from setting narrow targets that miss the majority of their footprint.

Validation involves expert review against the SBTi Criteria and Recommendations document. The process typically takes 4-8 months from submission. Validated targets are publicly listed, and companies must report progress annually. Targets are recertified every five years to ensure alignment with evolving climate science.

Council Fire's Approach

Council Fire guides clients through the full SBT lifecycle—from greenhouse gas baselining and pathway modeling to target submission, validation, and annual progress reporting. We help organizations build the operational and governance infrastructure needed to deliver on ambitious targets, ensuring science-based commitments translate into measurable action.

Frequently Asked Questions

How much does it cost to set a science-based target?

The SBTi charges a validation fee based on company size—currently ranging from $1,000 for SMEs to $14,500 for large enterprises. The larger cost is the internal effort to build a comprehensive GHG inventory and reduction roadmap, which varies significantly by organizational complexity.

Can small companies set science-based targets?

Yes. The SBTi offers a streamlined route for small and medium enterprises (SMEs) with fewer than 500 employees. The SME process uses a simplified target-setting approach and reduced fees, making SBTs accessible to companies across the size spectrum.

What if a company cannot meet its science-based target?

Companies are expected to report progress transparently. If circumstances change materially (mergers, divestitures, methodology updates), targets can be recalculated. However, consistently failing to demonstrate progress risks removal from the SBTi's validated list and associated reputational consequences.