SBTi Progress Report 2021

The SBTi theory of change is becoming reality

According to the SBTi’s theory of change based on the ‘diffusion of innovations’ theory, adoption of an innovation by 10 to 25% of a system’s members is followed by rapid adoption from the remaining members. The SBTi takes the threshold of 20% as a critical mass, or potential ‘tipping point’, for setting science-based targets within a given sector or geography.

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To measure progress towards the 20% critical mass threshold, this analysis uses a sample of 2,233 companies, with a potential “high impact” on climate mitigation. The 'High Impact Sample' was curated by CDP in 2019 and considers companies as “high-impact” based on a combination of greenhouse gas (GHG) emissions and market capitalization, using the MSCI ACWI Index as a starting point. This sample covers around $67 trillion worth of market capitalization and emissions, equivalent to the total annual emissions of the United States and the European Union combined. As the sample represents the largest, heaviest-emitting companies, they are the key private sector players to be engaged in science-based climate action due to their influence on market standards, width of supply chain, and emissions reduction potential.

In 2021, the SBTi High Impact Sample reached a critical mass globally and in key regions, surpassing the threshold with more than a quarter (27%) of high-impact companies setting science-based targets. Based on market capitalization, SBTi companies represent half of the high-impact companies, equivalent to $33 trillion out of $67 trillion.

As of December 2021, 598 SBTi companies are high-impact, including 386 with approved targets and 212 with commitments. There was a significant uptake in the High Impact Sample in 2021, with 308 additional high-impact companies setting targets or making commitments.

$67t of market capitalization & emissions covered by High Impact Sample companies

SBTi high-impact company coverage in 2021

386 with approved targets
SBTi companies are high-impact
of high-impact companies set science-based targets
of high-impact company market cap covered by SBTi

Reaching a critical mass in key regions, countries and industries

Europe is leading with 46% of high-impact companies having set or committed to science-based targets in 2021, compared to 34% of companies in 2020. Encouragingly, three regions – North America, Latin America and Oceania – crossed the 20% threshold in 2021.

Uptake of science-based targets among high-impact companies has also been significant across all regions and countries. On average, 2021 saw a 14% increase in the number of high-impact companies with targets or commitments across all countries. The majority (almost 80%) of OECD countries have crossed the 20% threshold, with Denmark, France, Ireland, and the United Kingdom leading the way.

While progress is still slower in non-OECD countries, Brazil and Saudi Arabia crossed the 20% threshold in 2021, joining India and Singapore which reached a critical mass in 2020.

Critical mass progress by industry

In most industries, SBTi companies reached or surpassed a critical mass in 2021, including five new industries crossing the 20% threshold. Heavy industries, such as manufacturing, transportation, infrastructure, power generation and materials, represent a significant share of the High Impact Sample. Encouragingly, most have just reached the 20% threshold, with the exception of infrastructure and power generation, showing the persisting gap in these industries.