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Developing a target

Most companies follow this five-step process to set science-based targets:

1. Commit: Submit a letter establishing your intent to set a science-based target

2. Develop: Work on an emissions reduction target in line with the SBTi’s criteria

3. Submit: Present your target to the SBTi for a complete validation

4. Communicate: Announce your target and inform your stakeholders

5. Disclose: Report company-wide emissions and track target progress annually

See our detailed guidance for each step.

Small and medium-sized enterprises (SMEs) can follow a stream-lined process. View the streamlined pathway for SMEs.

You can view definitions of each sector classification and their activities in our Sector Classification Descriptions document.

Companies need to establish a base year to track emissions performance consistently and meaningfully over a target period. Companies that are submitting targets for the first time are encouraged to set the most recent year with available data as the base year. If a company has more detailed data for a previous year, this is acceptable for the validation purposes as long as a most recent year data is also submitted to be assessed for ambition.

The following considerations are important for selecting a base year:

• Scope 1, 2, and 3 emissions data should be accurate and verifiable.
  

• Base year emissions should be representative of a company’s typical GHG profile.

• Targets must cover a minimum of 5 years and a maximum of 10 years from the date the target is submitted to the SBTi for validation. The choice of base year must be no earlier than 2015.

• For targets submitted for an official validation in the first half of 2024, the valid target years are 2028-2033 inclusive. For targets submitted in the second half of 2024, the valid target years are between 2029 and 2034 inclusive.

• For targets submitted for validation in 2024, the most recent inventory data submitted must be for 2022 at the earliest.

Yes. Companies and financial institutions may set science-based targets using calendar or fiscal years.

The SBTi requires companies to provide 100% of their GHG emissions for validation. Companies are allowed to exclude 5% of emissions. The SBTi requires that 100% of scope 1 and 2 emissions be covered under a target. The SBTi requires that 67% of the mandatory scope 3 emissions (see GHGP Corporate Value Chain Scope 3 Standard page 35) are covered under target(s). Companies are not allowed to exclude certain branches, geographies, businesses streams, etc. for validation of a science-based target.

No. However, companies that committed to the SBTi on or after 15 July, 2022 are required to use our criteria which requires alignment with a 1.5°C-pathway for most companies.

The SBTi has a streamlined route for small and medium-sized enterprises (SMEs), defined as a non-subsidiary, independent company which employs fewer than 250 employees and is not a Financial Institution (FI) or Oil & Gas (O&G) company.

Effective January 1st, 2024, the SBTi has updated the definition of an SME. You can find more information in our announcement.

This pathway enables SMEs to bypass the initial stages of committing to set a science-based target and the standard target validation process. SMEs can immediately set a science-based target for their scope 1 and 2 emissions by choosing from one of several predefined target options. Unlike larger companies, the SBTi does not require SMEs to set targets for their scope 3 emissions; however, SMEs must commit to measure and reduce their scope 3 emissions.

The SBTi introduced this expedited option for SMEs because smaller companies often lack the resources and capabilities needed to set scope 3 targets and monitor progress against them. The SBTi’s speedy and simplified approach for SMEs balances the need for them to take account of emissions across their value chains without imposing too great a burden on them.

However, from November 1st 2023, companies classified/qualified as SMEs will be granted the option to submit targets via the standard target validation route for corporates, and contribute to scaling the impact of robust science-based targets globally.

Like larger companies using our standard target validation route, SMEs are required to complete a recent, comprehensive greenhouse gas emissions inventory following the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard and Scope 2 Guidance. They are required to publicly report their company-wide scope 1 and 2 GHG emissions inventory and progress against published targets on an annual basis.

Smaller SMEs (<150 employees) in the earlier stages of developing their emissions inventory can use the tools provided by the SME Climate Hub to support the measurement and reporting of emissions.

The SBTi also has a streamlined route net-zero target setting for SMEs, which does include commitments on scope 3 target setting and reduction. SMEs aiming to establish net-zero targets need to submit their Scope 3 emissions accounting adhering to the Scope 3 Calculation Guidance.

Targets submitted through the dedicated route for SMEs will be approved and posted to the SBTi website pending due diligence review and payment. Companies will be sent a communications welcome pack and will be able to use the SBTi logo on their website and in company communications.

If you still have an outstanding question reach out to smes@sciencebasedtargets.org.

The Science Based Targets initiative (SBTi) requires companies that meet either of the following two criteria to set a FLAG science-based target:

i) Companies with land intensive activities in their value chain from the following FLAG-designated sectors are required to set FLAG targets:
• Forest and Paper Products – Forestry, Timber, Pulp and Paper
• Food Production – Agricultural Production
• Food Production – Animal Source
• Food and Beverage Processing
• Food and Staples Retailing
• Tobacco

ii) Companies in any other SBTi-designated sector that have FLAG-related emissions that total 20% or more of overall emissions across scopes 1, 2 and 3.

If your company meets the criteria above, FLAG targets will be required and should be submitted along with other targets through the SBTi Target Validation Booking System using the SBTi Corporate Target Submission Form and FLAG Annex. Please note that FLAG Targets can not be submitted individually and companies who already have a validated target will need to submit a Near Term Update + FLAG target.

Refer to our FLAG Getting Started Guide, FLAG FAQs, and FLAG Sector Guidance for additional information.

Should you have a question unanswered by these resources, please contact FLAG@sciencebasedtargets.org

The following applies to companies that are required to set separate FLAG targets as per FLAG-C1 of the Forest, Land and Agriculture guidance.

Companies with existing science-based targets must submit FLAG targets within six months after the release of the final version of the GHG Protocol Land Sector and Removals Guidance. Businesses that are required to set a FLAG target and decide to set it after the release of the final version of the GHG Protocol Land Sector and Removals Guidance, must still commit to no-deforestation upon submission, with a target date no later than December 31, 2025.

Companies without an existing science based target and that are in the process of developing targets, will also be required to set FLAG targets upon submission.

As of April 2023, companies anticipating target recalculation for any reason or companies submitting net-zero targets are required to include FLAG targets.

Please find more information on the FLAG project implementation timelines in this blog post.

Aware of the need for robust frameworks to be able to monitor, report and assess progress against voluntary climate targets in the corporate sector, the SBTi is conducting research to identify current best practices and critical topics to measure progress and to assess progress against targets in a robust and standardized way.

Meanwhile, companies should report their company-wide GHG emissions and progress against targets through annual reports, sustainability reports, the company’s website, and/or disclosure through CDP’s annual questionnaire.

Approved company commitments and targets are shown on the Target Dashboard and accompanying data download file. The target wording and publication date are agreed by the company with the SBTi.

The SBTi safeguards other information provided by the company to assess its targets in accordance with the target validation service contract, which companies review and sign before the target validation process begins.

The SBTi publishes information about companies and their targets and commitments on our website.

The following information is published after a commitment is made:

1. Company name

2. ISIN

3. LEI

4. Headquartered region and location

5. Sector

6. Commitment type

7. Commitment status

8. Commitment deadline

9. Reason for commitment extension or removal

10. Commitment publication date

The following information is added once a target is approved:

11. Full target language

12. Target type, scopes covered, base year, target year and target value

12. Company temperature alignment

13. Target publication date

Companies are able to set near-term scope 3 emission reduction targets using the following methods:

1. Absolute contraction in line with 1.5°C or well-below 2°C.

2. Sectoral Decarbonization Approach in line with 1.5°C or well-below 2°C.

3. Supplier or Customer Engagement Targets.

4. Economic Intensity Targets.

5. Physical Intensity Targets.

More details are included in the new version of the criteria.

The SBTi’s target-setting requirements are based on GHG inventory accounting practices, as specified in the GHG Protocol Corporate Standard, Scope 2 Guidance and Value Chain Standard (Scope 3). Avoided emissions fall under a separate accounting system from corporate inventories and therefore do not play a role in emission reduction target-setting or achievement with the SBTi.

The SBTi requires that companies set targets based on emission reductions through direct action within their own boundaries or their value chains.

The use of carbon credits must not be counted as emission reductions toward the progress of companies’ near- or long-term science-based targets. This means that companies cannot purchase carbon credits as a substitute for emission reductions.

For more information on market-based accounting approaches, see What role do market-based accounting approaches play in target-setting with the SBTi?

When it comes to GHG emissions accounting, companies should follow guidance from the experts at the Greenhouse Gas Protocol (GHGP). Market-based accounting approaches include the use of certificates conveying emissions attributes that differ from the physical emissions attributes of a company’s activities.

The GHGP allows for market-based accounting for purchased steam, heat, electricity and cooling via the scope 2 market-based accounting approach. The GHGP does not provide guidance for market-based accounting for scope 1 or scope 3 emissions (with the exception of supplier- or customer-provided market-based emissions factors). Therefore, as part of the checks carried out during the target validation process, it is not currently possible for the SBTi to assess whether inventories that include market-based approaches to scope 1 and scope 3 emissions are aligned with the GHGP.

Other uses of market-based instruments, such as book-and-claim, are topics that require further research and clarification.

The SBTi is working with the GHGP to ensure we coordinate on requirements for corporate greenhouse gas inventories. As accounting standards evolve and further research is conducted by the SBTi, SBTi resources will be updated to reflect best practice.

As part of the SBTi’s MRV (Monitoring, Reporting, and Verification) project, the SBTi is conducting research into how companies achieve their targets and the parameters that should be considered for robust reporting of target progress, delivery and achievement. This research is for investigative purposes, and any updates to SBTi standards are subject to thorough consideration and approval in line with the SBTi’s governance.

The SBTi cannot guarantee support for legacy versions of Microsoft Excel, and recommends that users of its target-setting tools update to the latest version available.

In the event that submitted targets, even if matching or exceeding the output(s) of any of the SBTi's target-setting tools, fall short of the SBTi's ambition requirements, the Target Validation Team may deem the tool an output(s) to be erroneous. The tool output does not override target assessment criteria, and the validation team may consequently request target adjustment.