How to Set Science-Based Targets

What Science-Based Targets Are

Science-based targets (SBTs) are greenhouse gas reduction goals aligned with what climate science says is necessary to limit global warming to 1.5°C above pre-industrial levels. The Science Based Targets initiative (SBTi) — a partnership between CDP, the United Nations Global Compact, World Resources Institute, and WWF — validates these targets against established criteria.

As of 2026, over 7,000 companies have committed to or set SBTs. Many regulatory frameworks (CSRD, ISSB) and investor expectations now reference SBTi-validated targets as a credibility benchmark for corporate climate strategy.

Step 1: Commit to the SBTi

Submit a commitment letter through the SBTi website. This publicly signals your intent and gives you 24 months to submit targets for validation. The commitment is free; validation fees depend on company size (ranging from roughly $1,000 for SMEs to $14,500+ for large enterprises).

Once you commit, your company name appears on the SBTi's public tracker. There's no going back quietly — treat this as a binding public pledge.

Step 2: Complete Your GHG Inventory

You cannot set credible reduction targets without a robust emissions baseline. Complete a GHG inventory covering:

• Scope 1: Direct emissions from owned or controlled sources (fuel combustion, process emissions, fugitive emissions, fleet vehicles)
• Scope 2: Indirect emissions from purchased electricity, heat, steam, and cooling (report both market-based and location-based)
• Scope 3: All 15 categories per the GHG Protocol Corporate Value Chain Standard. Screen for relevance, then calculate.

Your inventory must follow the GHG Protocol Corporate Standard. Choose a base year that is representative of your typical emissions profile — avoid years with anomalies (COVID-19 years, major acquisitions, etc.).

Critical threshold: If your Scope 3 emissions are 40% or more of total emissions (Scopes 1+2+3), you must set a Scope 3 target. For most companies, this threshold is easily exceeded.

Step 3: Choose Your Target Type

SBTi offers two target timeframes:

Near-Term Targets (required)

• Cover 5-10 years from submission
• Must reduce Scope 1 and 2 emissions in line with 1.5°C pathways
• Scope 3 target required if Scope 3 ≥ 40% of total
• Methods: absolute contraction approach or sectoral decarbonization approach (SDA)

Net-Zero Targets (optional but increasingly expected)

• Long-term target covering Scope 1, 2, and 3
• Must reduce emissions by at least 90% before using any neutralization (carbon removal)
• Residual emissions (≤10%) must be neutralized through permanent carbon removal
• Interim target at or before 2035

Most companies start with near-term targets and add net-zero commitments within 1-2 years.

Step 4: Select a Target-Setting Method

Absolute contraction approach: Reduce total emissions by a fixed percentage. The minimum ambition for 1.5°C alignment is a 4.2% linear annual reduction for Scopes 1 and 2. This is the simplest and most common method.

Sectoral decarbonization approach (SDA): Available for specific sectors (power generation, cement, steel, aluminum, pulp/paper, transport). Targets are set based on sector-specific decarbonization pathways and expressed as emissions intensity metrics (e.g., tCO₂e per MWh generated).

For Scope 3: SBTi requires at minimum a 2.5% linear annual reduction in absolute Scope 3 emissions for near-term targets, or engagement of suppliers covering 67% of Scope 3 emissions to set their own SBTs within 5 years (supplier engagement approach).

Step 5: Model Your Reduction Pathway

Build a decarbonization model that maps your current emissions to your target:

1. Baseline emissions (base year inventory)
2. Business-as-usual projection (expected emissions growth without intervention)
3. Reduction levers — identify specific actions:
   • Energy efficiency improvements
   • Renewable electricity procurement (PPAs, RECs, on-site generation)
   • Fleet electrification
   • Process changes and fuel switching
   • Supplier engagement and procurement shifts
   • Product redesign for lower use-phase emissions
4. Abatement potential of each lever (estimated tCO₂e reduction per year)
5. Gap analysis — does the sum of your levers close the gap to the target?

If reduction levers don't reach your target, you need to revisit your strategy — not lower your ambition. Common gaps are closed through accelerated renewable procurement, deeper supplier engagement, or business model adjustments.

Step 6: Draft Your Target Language

SBTi has specific formatting requirements. Examples:

• "[Company] commits to reduce absolute Scope 1 and 2 GHG emissions 42% by 2030 from a 2022 base year."
• "[Company] commits to reduce absolute Scope 3 GHG emissions from purchased goods and services and use of sold products 25% within the same timeframe."
• "[Company] commits that 67% of its suppliers by emissions covering purchased goods and services will have science-based targets by 2027."

Ensure your target language specifies: scope coverage, boundary, reduction percentage, base year, and target year.

Step 7: Submit for Validation

Prepare your submission package:

• Target submission form (from SBTi portal)
• GHG inventory data (base year and most recent year)
• Target calculation workbook showing methodology
• Supporting documentation (boundary definitions, exclusions, recalculation policy)

SBTi validation typically takes 4-8 weeks. Reviewers may come back with questions or request modifications. Common issues include incomplete Scope 3 inventories, boundary mismatches, and targets that don't meet minimum ambition thresholds.

Step 8: Implement and Track Progress

Once validated, integrate your targets into:

• Annual sustainability reporting (disclose progress against targets)
• Executive compensation metrics
• Capital expenditure planning (e.g., renewable energy investments)
• Procurement policies (supplier engagement requirements)
• Product development processes

Report progress annually through CDP and your sustainability report. SBTi expects companies to publicly report emissions data at least annually.

Step 9: Recalculate When Necessary

Recalculate your base year emissions when:

• Structural changes occur (mergers, acquisitions, divestitures)
• Methodology changes significantly affect comparability
• Errors are discovered in the base year inventory

SBTi requires a recalculation policy that defines triggers and thresholds for base year adjustments. A common threshold is a 5% change in base year emissions.

Frequently Asked Questions

How much does SBTi validation cost?

Fees are tiered by company size. SMEs (under 500 employees) can use the streamlined SME route at reduced cost (approximately $1,000). Large enterprises pay approximately $9,500-$14,500 depending on target type. Net-zero target validation has an additional fee. Check the SBTi website for current pricing.

Can we exclude certain Scope 3 categories from our target?

You can exclude categories that are genuinely not relevant to your business, but your Scope 3 target must cover at least 67% of total Scope 3 emissions. If you exclude material categories, SBTi reviewers will challenge the exclusion.

What happens if we miss our target?

SBTi doesn't currently penalize companies for missing interim milestones, but your progress (or lack thereof) is publicly visible through CDP disclosures and your annual reporting. Persistent underperformance risks reputational damage and investor scrutiny. If your business has fundamentally changed, you can resubmit updated targets.

Do renewable energy certificates (RECs) count toward Scope 2 reductions?

Yes, under the market-based accounting method per the GHG Protocol Scope 2 Guidance. SBTi accepts market-based Scope 2 accounting for target tracking. However, the quality and credibility of RECs matters — bundled PPAs and on-site generation are viewed more favorably than unbundled RECs by investors and rating agencies.

How often do SBTi criteria change?

SBTi updates its criteria periodically. Major updates occurred in 2021 (Corporate Net-Zero Standard) and 2024 (updated near-term criteria). Companies with existing validated targets may need to revalidate if criteria tighten. Monitor SBTi announcements and plan for revalidation every 5 years at minimum.