There are three science-based target (SBT) setting approaches:
Sector-based approach: The global carbon budget is divided by sector and a company’s required emissions reduction is sector-specific.
Absolute-based approach: A percentage of absolute emissions reductions is assigned to individual companies.
Economic-based approach: The carbon budget is equated to global GDP and a company’s share of emissions is determined by its gross profit, since the sum of all companies’ gross profits worldwide equate to global GDP.
Within these three approaches there are six existing SBT setting methods. These methods aim to ensure that emission reductions are defined according to what science says is necessary for preventing dangerous climate change.
The Science Based Targets initiative recommends two specific methods (the Sector Decarbonization Approach and the Absolute Emission Contraction) when it comes to setting a target, described in more detail below.
For more information on the other existing methods please consult the linked resources below as well as the the Science Based Target Setting Manual.
The Science Based Targets initiative recommends companies use either the Sectoral Decarbonization Approach or the Absolute Emissions Contraction Method to set their Scope 1 and 2 targets as these methods ensure that global emissions are reduced in absolute terms in the long term. They are the most robust methods to ensure the 2°C carbon budget is conserved. In addition, the other methods (C-FACT, GEVA, CSI and CSO) might not be updated with recent data.
Companies who wish to use economic-based methods to set intensity targets may do so but note that intensity targets would be considered science-based only if they lead to absolute reductions in line with climate science or are modelled using an approved sector pathway or method approved by the Science Based Targets initiative (e.g. the Sectoral Decarbonization Approach). Reductions must be at a minimum consistent with the low end of the range of emissions scenarios consistent with the 2°C goal,2 or aligned with the relevant sector reduction pathway within the Sectoral Decarbonization Approach.”