Setting a climate target requires solid data, clear boundaries and a reduction pathway aligned with business decisions. Customers, investors, financial institutions and large buyers assess the quality of emissions information carefully: baseline, Scope 1, Scope 2, Scope 3, interim targets and annual progress.

The Science Based Targets initiative, known as SBTi, provides companies with a recognized method to set emissions reduction targets aligned with climate science. Its value lies in its structure: an SBTi target starts from a measured carbon footprint, defines a reduction pathway, includes relevant emissions across the value chain and connects to a verifiable decarbonization plan.

For companies, this approach makes climate targets more useful in relationships with customers, investors, supply chains and financial stakeholders. A well-structured science-based target helps define operational priorities, allocate investments, monitor results and reduce the risk of generic environmental objectives that are difficult to demonstrate.

What Is SBTi?

The Science Based Targets initiative, abbreviated as SBTi, is a non-profit organization that defines standards, criteria and tools to help companies and financial institutions set emissions reduction targets aligned with climate science. Its objective is to make corporate climate targets more comparable, verifiable and aligned with the pathways required to limit global warming.

SBTi was launched in 2015 as a collaboration between some of the leading international organizations working on climate, sustainability and disclosure: CDP, United Nations Global Compact, World Resources Institute, WWF and the We Mean Business Coalition. In 2023, the initiative was incorporated in the United Kingdom and is now registered as a charity in England and Wales; alongside the charity, SBTi Services Limited operates as the subsidiary responsible for target validation services.

The logic behind SBTi is clear: if a company wants to contribute to the climate transition, its reduction targets must be consistent with the level of decarbonization required by science. For this reason, SBTi develops standards and guidance, provides target-setting tools and independently assesses the targets submitted by companies and financial institutions.

For a company, starting an SBTi pathway means building a climate target with precise elements: emissions baseline, organizational boundary, Scope 1, Scope 2 and Scope 3 coverage, base year, target year, reduction percentage and monitoring approach. The credibility of the target depends on the quality of these elements and on the company’s ability to update them over time.

Why SBTi Matters for Companies

SBTi introduces discipline into the way a company defines its climate targets. Emissions reductions are expressed through numbers, boundaries and deadlines, avoiding overly generic formulations. This makes it easier to connect climate strategy with budgets, investments, procurement, operations and product development.

The commercial value is equally concrete. In supplier qualification processes, tenders, ESG ratings, due diligence and discussions with banks and investors, companies need to demonstrate the quality of their environmental information. An SBTi target can strengthen a company’s position when it is supported by updated data, clear internal responsibilities and a credible operational plan.

SBTi also helps companies interpret climate risk in business terms. Energy, raw materials, logistics, suppliers, compliance and investments are all areas influenced by the transition. A science-based target makes it possible to assess in advance where emissions are concentrated, which levers can reduce them and which decisions require priority.

Where to Start: Carbon Footprint and Emissions Baseline

The first step in setting up an SBTi pathway is measuring the company’s corporate carbon footprint. The baseline must reliably represent direct Scope 1 emissions, indirect Scope 2 emissions from purchased energy and relevant Scope 3 emissions across the value chain.

The quality of the baseline shapes the entire process. An incomplete emissions inventory can lead to underestimated targets, unrealistic reductions or difficulties during validation. For this reason, companies should start from a structured carbon footprint calculation, with clear criteria for organizational boundaries, data sources, emission factors, assumptions and internal responsibilities.

For companies with multiple sites, business units, Scope 3 categories or strategic suppliers, manual data management can quickly become fragile. A carbon footprint software helps centralize data collection, calculations, emission factors, annual updates and reduction scenarios. The goal is to build a data foundation capable of supporting target setting, validation and progress monitoring over time.

Before starting an SBTi pathway, a company should assess the quality of its data foundation. Does the carbon footprint cover all relevant emissions categories? Are the data primary, estimated or proxy-based? Are assumptions documented? Have the most relevant Scope 3 categories been identified? Are reduction levers already connected to owners, budgets and timelines?

This initial assessment reduces the risk of building targets that are difficult to validate or unrealistic compared with the company’s emissions profile.

Scope 1, Scope 2 and Scope 3 in the SBTi Pathway

SBTi requires company-wide coverage of Scope 1 and Scope 2 emissions for near-term targets. For Scope 3, SBTi criteria require inclusion when relevant Scope 3 emissions represent 40% or more of total Scope 1, 2 and 3 emissions.

To understand the differences between the three emissions categories, companies can refer to this dedicated guide on Scope 1, 2 and 3 emissions.

Scope 3 requires a different type of work compared with Scope 1 and Scope 2. Many data points sit outside company systems: suppliers, carriers, distributors, customers, sold products, purchased materials and outsourced processes. In the early stages, companies often use estimates; over time, a credible pathway requires more specific data, especially for the emissions categories with the greatest weight.

The supply chain therefore becomes a central part of SBTi alignment. Procurement, operations, logistics, technical teams and sustainability teams need to work on shared priorities: which categories matter most, which suppliers can provide primary data, which materials have the highest emissions intensity and which contractual or design levers can reduce emissions.

This is particularly relevant for sectors such as fashion, food, packaging, chemicals, manufacturing, construction and retail, where a large share of the carbon footprint sits outside the company’s direct control. A dedicated article on Scope 3 emissions can help connect the theory behind SBTi targets with the practical challenges of data collection, source quality and supplier engagement.

Near-Term, Long-Term and Net Zero Targets

In the SBTi pathway, it is useful to distinguish between near-term targets, long-term targets and Net Zero targets. Near-term targets define the reductions to be achieved in the short to medium term and guide operational decisions over the next few years. Long-term targets define the level of reduction required to reach a pathway consistent with Net Zero.

Within the SBTi framework, Net Zero requires deep emissions reductions across the entire value chain. Residual emissions are addressed only after reducing as much as possible through structural interventions. This approach limits reliance on targets based mainly on offsetting and shifts attention to real decarbonization levers.

For companies, the challenge is connecting long-term ambition with decisions already active by 2030. A 2050 target is valuable when translated into interim milestones, emissions budgets, investments, internal owners and annual indicators. Without this structure, the target risks remaining disconnected from operational priorities.

The Corporate Net-Zero Standard is the main SBTi reference for companies that want to set science-based Net Zero targets and define a reduction pathway aligned with climate science.

How the SBTi Pathway Works: Commitment, Validation and Target Set

The SBTi pathway follows a formal sequence. For corporate companies, the first step can be the commitment: a public commitment to develop emissions reduction targets aligned with SBTi criteria. After committing, the company is listed in the SBTi Target Dashboard with an active status and has 24 months to develop its science-based targets and submit them for validation.

The next step is target validation. The company submits its targets to SBTi Services, together with the required technical information: organizational boundary, base year, emissions inventory, Scope 1, Scope 2 and Scope 3 coverage, calculation methodology and reduction pathway.

SBTi Services operates as a separate legal entity from the Science Based Targets initiative and manages target validation for companies, financial institutions and SMEs.

If validation is successful, the company moves from commitment status to “target set” status, meaning that its targets have been approved and published. From that point, the work continues over time: the company must monitor progress against the defined pathway, update its carbon footprint, assess the effectiveness of decarbonization levers and maintain consistency between targets, performance and business decisions.

SBTi validation is a paid service. Fees vary depending on the type of organization, revenue tier and service requested, such as near-term targets, Net Zero targets, updates or SME pathways. SBTi Services uses a tiered pricing model, defined at registration based on the organization’s financial information.

SBTi Calculator: What It Is For and What Its Limits Are

When people refer to the SBTi calculator or SBTi target-setting tool, they usually mean the tools provided by SBTi to support emissions reduction target modelling. Their role is to help companies translate an emissions baseline into pathways aligned with SBTi criteria, especially when defining near-term targets and, where applicable, Net Zero targets.

The value of the calculator depends on the quality of the inputs. Before using it, a company needs a reliable GHG inventory, a defined base year, correctly calculated Scope 1 and Scope 2 emissions and an initial assessment of relevant Scope 3 categories. If the underlying data are incomplete, the output may create a false sense of precision: the target looks numerical, but it rests on weak assumptions.

The calculator is useful for scenario building. It allows companies to test different pathways, assess the impact of the base year, compare absolute reduction approaches and sectoral methodologies, and understand whether the level of ambition is compatible with SBTi criteria. This helps sustainability teams bring a more concrete discussion to finance, operations, procurement and leadership: not a generic target, but a pathway with operational implications.

The main limit is that the calculator does not validate the target and does not replace a decarbonization plan. Validation remains a formal process managed by SBTi Services; the plan requires internal analysis of reduction levers, costs, technical feasibility, timelines, owners and organizational dependencies. A tool can indicate how much to reduce, but it does not decide how to reduce.

For this reason, the calculator should be used as a working tool, not as the final step. A stronger sequence is: build the carbon footprint, verify the quality of the baseline, identify the most relevant Scope 3 categories, model targets using SBTi tools, assess operational levers and prepare the documentation for validation. In this way, the calculation becomes part of a more robust and useful decision-making process for the company.

How to Build an SBTi Decarbonization Plan

A science-based target must be supported by a credible decarbonization plan. Even before validation, the company needs to understand which emissions it can reduce, through which levers, over what timeframe and with which internal responsibilities. The SBTi pathway starts from a technical base and quickly leads to a management question: which actions can actually deliver the target?

Actions may include energy efficiency, process electrification, renewable energy procurement, consumption reduction, logistics optimization, product redesign, replacement of emissions-intensive materials and supplier engagement. Each lever should be assessed based on reduction potential, cost, technical feasibility, implementation timeline and organizational dependencies.

After validation, the work continues year after year. The company must update its carbon footprint, monitor progress against the target, verify the effectiveness of reduction levers and adjust the plan when results are not aligned with the expected pathway. This is where the target enters business management: budgeting, procurement, operations, product development, logistics and investment planning.

To explore operational levers in more detail, the natural reference is a guide on corporate decarbonization strategies, because the SBTi pathway works only when the target is translated into measurable actions, internal owners and reduction milestones.

SBTi FLAG, Buildings and Sector-Specific Approaches

Emissions profiles vary significantly from sector to sector. For this reason, SBTi has developed specific criteria and guidance for certain industries. Two relevant examples are SBTi FLAG and SBTi buildings.

The FLAG guidance, which stands for Forest, Land and Agriculture, applies to companies with emissions linked to forests, land use and agriculture. It is relevant for food, agriculture, consumer goods, fashion, paper, packaging and companies with supply chains exposed to agricultural or forest-based raw materials.

The buildings sector follows specific logic because emissions can come from construction, materials, building use, operational energy and real estate assets. This confirms a practical rule: an SBTi pathway must be built around the company’s emissions profile, business model and actual level of influence across the value chain.

Common Mistakes When Setting an SBTi Target

The first mistake is starting from the target before having a reliable baseline. Without a solid emissions inventory, the company risks setting objectives that do not reflect its real emissions profile.

The second mistake concerns Scope 3. Many companies start with Scope 1 and Scope 2 because data are more accessible, then discover that the most relevant share of their carbon footprint sits in the value chain. A target that neglects relevant indirect emissions gives an incomplete view of climate risk.

The third mistake is confusing Net Zero with offsetting. In the SBTi framework, the priority remains emissions reduction across the value chain. Neutralization concerns residual emissions after structural reduction measures have been implemented.

The fourth mistake is keeping the target outside business processes. A climate target without budget, owners, milestones and monitoring remains fragile. An effective SBTi target influences energy choices, procurement, logistics, investments, suppliers and product development.

Conclusion

SBTi provides companies with a recognized framework for setting measurable climate targets aligned with science and connected to emissions reduction. Its usefulness depends on the quality of the preparatory work: complete carbon footprint, reliable baseline, Scope 1, Scope 2 and Scope 3 coverage, supply chain analysis and an operational decarbonization plan.

For companies, the main advantage lies in making climate strategy more concrete. A science-based target helps set priorities, monitor progress, improve data quality and respond more effectively to the expectations of customers, investors and supply chain partners.

SBTi validation is an important milestone, but the real value comes from execution: reliable data, clear responsibilities, appropriate tools and business decisions aligned with the reduction pathway. This is how a Net Zero objective becomes part of the company’s industrial, financial and operational management.