SBTi Monitoring Report 2022
The SBTi's fourth report examining progress in science-based targets globally, 'Looking back at 2022 and moving forward to 2023 and beyond', finds continued significant growth in the number of companies and financial institutions setting science-based targets, despite an increasingly challenging global backdrop.
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Greatest growth from SMEs
Of the 1,097 companies with targets validated in 2022, 638 were classed as small or medium-sized enterprises (SMEs). This total was greater than the cumulative total of SMEs in 2021 and 2020, the first year in which we introduced an SME route for target validation. 2022 saw the first 52 SMEs set net-zero targets, while 88% of SME targets set that year were 1.5°C-aligned.
38 financial institutions set science-based targets in 2022, compared to nine in 2021. This brought the total number of financial institutions with science-based targets to 47. The SBTi is working to encourage greater uptake of science-based targets by financial institutions because of the exponential potential they have to drive down GHG emissions across entire sectors and economies.
Steady growth of net-zero targets
2022 was the first full year in which companies could have their targets validated against the SBTi’s Corporate Net-Zero Standard, which was introduced in October 2021 as the SBTi’s most ambitious level of decarbonization, requiring companies to set both near and long-term science-based targets to cut all possible emissions by 2050. A total of 130 organizations set net-zero targets in 2022, of which 78, or 60%, were classed as companies and the remaining 40% as SMEs. A further 889 companies committed to submit net-zero targets. Net-zero targets represented 12% of all science-based targets set in 2022.
Almost 4 in 5 SBTi companies have 1.5°C-aligned targets
As of July 2022, the SBTi has only accepted new target submissions which are aligned with 1.5ºC. Consequently, the proportion of all companies with science-based targets which are 1.5ºC aligned had reached 79% – 1,635 – by the end of 2022, compared to 68%, or 734, at the end of 2021. In 2022 alone, 945 companies set 1.5ºC-aligned targets.
Almost every SBTi company with target covers scope 3
406 companies that set targets in 2022 included scope 3 targets. This brought the total number of all companies with science-based targets covering scope 3 (excluding SMEs and financial institutions) to 1,134 or 96% by the end of 2022.
Of companies which set scope 3 targets in 2022, 63 set supplier engagement targets to incentivize suppliers in their value chains to set their own science-based targets. This brought the total number of companies with supplier and customer engagement targets to 189, or 16% of total companies with science-based targets by the end of 2022.
Emissions coverage of targets continues to increase
Combined scope 1 and 2 emissions of companies with science-based targets in 2022 represented 422 million tonnes of CO2e – a 27% increase compared to 2021, and an amount greater than the United Kingdom’s GHG emissions for 2022.
In total, the amount of scope 1 and 2 emissions covered by science-based targets increased nearly 15 times between 2015 and 2022, from 145 million to two billion tonnes of CO2e. This total is equivalent to Japan and Germany’s total combined GHG emissions for 2022. Companies headquartered in the top three countries by emissions coverage, the United States, Germany and France, were together responsible for 47% of total scope 1 and 2 emissions coverage by science-based targets between 2015 and 2022.
As of December 2022, the total committed annual emissions reductions across all approved science-based targets was 76 million tonnes of CO2e, equivalent to eliminating Switzerland’s 2022 annual CO2 emissions more than twice over. 65% of these companies with 1.5°C-classified targets said they intended to cut scope 1 and 2 emissions at a higher rate than was required, meaning their linear annual emissions reduction rate exceeds the SBTi’s 4.2% minimum threshold for targets aligned with limiting warming to 1.5°C above pre-industrial levels.