As opposed to other approaches which are generally based on the reduction potentials of each business (bottom-up), SBTs are based on the goals set by the Paris Agreement and the need to limit average global temperature to +1.5°C by 2100. In other words, SBTi takes a top-down approach: science requires that business targets align with the trajectory of +1.5°C and that business review their business models in the light of this target. Why? Because there is no alternative.

 

With the SBTi approach, reduction targets (SBTs) concern first of all the emissions associated with the core activities of the company, i.e. Scope 1 (direct emissions) and Scope 2 (indirect emissions). However, if Scope 3 emissions (indirect emissions across the value chain) exceed 40% of the company’s overall emissions (Scope 1 + 2 + 3), then it also becomes mandatory to set reduction targets for these emissions. Bear in mind that Scope 3 usually constitute the most important hotspot of the company’s climate impact. Clearly then, in order to be able to quantify and set science-based targets the company must first and foremost have quantified its Corporate Carbon Footprint which is the first step towards building a climate strategy.

 

For Small and Medium Enterprises (SMEs), SBTi criteria allows for simplified procedures.

 

The initiative (SBTi) has also released the first “Net zero standard” with a view to helping companies define long term reduction targets (by or before 2050) which can integrate near term targets (5 – 10 years from the baseline year) described thus far. A company which wants to set long-term targets must necessarily have already defined near term targets.

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