The impact of setting science-based targets on businesses
The SBTi has released a new report demonstrating that science-based targets deliver competitive advantage—not just climate impact.
In The Impact of Setting Science-Based Targets on Businesses report, a survey of 171 companies, a literature review of 22 studies, and three case studies indicate that companies benefit from a wide range of positive effects as a result of setting science-based targets. This spans from improved investor relations, to better financing terms, enhanced strategic cohesion, more alignment with suppliers, and resilience across multiple areas of risk. This is in addition to higher climate ambition and a faster pace of decarbonization.
Overall impact
91% of companies surveyed reported that science-based targets have had an overall positive impact on their organizations.
Strategic impacts
Strategy, supply chain alignment, and managing future regulatory changes are high-impact areas that survey respondents said were positively affected by having validated targets.
- 80% noted improved strategic cohesion and long-term vision as a key benefit of setting science-based targets.
- Three-quarters (74%) said targets helped them align with supply chain and customer requirements.
- Two thirds (67%) reported a positive impact on their competitiveness compared to peers.
- 71% cited improved resilience against future regulatory changes as a positive impact, aligning with academic research suggesting that this resilience could contribute to the lower stock price volatility observed among companies with validated targets (Guerrero-Escobar et al., 2025).
“Businesses that operate more efficiently and contribute to the global decarbonization agenda tend to be more resilient and drive lasting value creation for our investors and our stakeholders...For us, this is not just theory—we’ve seen this firsthand with our portfolio”.
Denise Odaro, Head of ESG & Sustainability, PAI Partners.
Reputational impacts
Most survey respondents reported positive or very positive reputational impacts from target setting.
- Almost all respondents (95%) reported a positive reputational impact.
- 80% said target setting strengthened investor perception and relations.
- Three in four (75%) respondents flagged a positive impact on credibility within their sectors and the wider business ecosystem.
- 69% said target setting improved how they were perceived as a supplier.
- 67% noted a positive impact in consumer perception and brand trust.
Financial impacts
Having science-based targets is reported to have positive impacts across multiple financial indicators according to both the study and academic findings. Studies found that companies who adopted targets maintained gross margins, enjoyed beneficial loan terms, and experienced reduced stock price volatility. Across every metric, companies were neutral or positive about the impact of science-based targets, with very few reporting downsides. Surveyed companies reported positive impacts on both short-term and long-term financial performance, suggesting a strong financial motive for setting targets.
- Three in every four companies (76%) said that setting science-based targets had a positive impact on investor confidence.
- Recent findings from the European Central Bank indicate that European banks are offering better loan terms to those with climate targets, including SBTi targets (Altavilla et al., 2024).
- Operating costs were the only area with any statistically significant downsides reported in the survey, with 31% of companies reporting negative impacts. This is contrasted by 41% who report positive impacts on long-term financial performance (rising to 92% when including neutral impacts).
- Studies show no negative impacts on gross margins or profitability from target setting (Li et al., 2025; Zhang, 2022).
- Early research suggests that companies with targets initially spend 60–64% more on climate initiatives annually in the short term, but this is estimated to result in future annual savings of 17-19% in CO2 emissions and 22-33% in costs (Freiberg et al., 2021).
Climate action impacts
Science-based targets support climate action and the pace of decarbonization at companies.
- 90% of companies said that target-setting had positively impacted their climate ambition.
- 86% reported a positive impact on their pace of decarbonization.
- Multiple studies that showed that companies with validated targets are cutting emissions more than their peers. In these studies, companies with targets, on average, reduce absolute and intensity emissions more than those without targets (Li et al., 2025; Romito et al., 2024; Zhang, 2022). This is most potent when validated targets are paired with externally assured emissions data (Berg et al., 2025).
The business case is clear: companies setting science-based targets are building the foundations of future success.
“More than just guiding our internal efforts, these targets have enabled us to share insights and best practices with our value chain partners—engaging and aligning them with our Net Zero commitment”.
Vaishali Sinha, Co-founder and Chairperson, Sustainability, ReNew
