The Science Based Target Initiative (SBTi) experienced exponential growth over the last year in terms of companies committing to reduce their emissions in line with a 1.5°C pathway to prevent the worst impacts of climate change.
In 2021, the number of companies that set and committed to science-based targets has doubled. In addition to that, the validation rate has tripled in the same period.
In total, SBTi reports that companies covering over a third of global economy market capitalization were working with the SBTi.
This was partly caused by the launch of the SBTi Net-Zero Standard ahead of COP26. The standard provides the first of its kind framework for setting a net-zero target for corporations.
The ambition level in the net zero standard, incl. the near-term targets, has been set higher than in previous SBTi standard versions. The new standards require companies to make rapid and deep emission cuts.
About 80% of companies that committed to SBTi have a target approved that aims to reduce emissions aligned with 1.5°C.
63% of surveyed companies with 1.5°C-classified targets state their intention to reduce their emissions at a higher rate than their target would require. In this regard, the annual reduction rate of 4.2% ensures the achievement of 1.5ºC-aligned science-based targets. A typical company that has an SBTi approved target has been more ambitious and has been reduced their accounted emissions at a linear rate of 8.8% in Scope 1 and 2 reductions per year between 2015 and 2020.
Moreover, 96% of companies with an approved science-based targets have targets covering scope 3 emissions.
Most of the companies committing to science-based targets are from Europe, North America, and Japan. While global regions like Asia, Africa, and Latin America are proportionally underrepresented. Further, heavy-emitting industries continue to be underrepresented as well.
Regardless of the progress companies made towards the target fulfillment, there is a gap in reporting practices: SBTi analyzed 692 companies in total of which 46% reported their progress on all targets set. 26% reported progress on at least one target. For the other 28%, no information on progress against their targets could be found.
Due to those findings, the SBTi’s 2021-2025 strategy aims to onboard more companies especially in the heaviest emitting sectors as well as emerging markets to close the current emissions and ambition gap.
The SBTi therefore implemented various Country Activation and Incubators Projects, that focus on corporate engagement in Asia, Latin America, and Africa. Additional sector-specific guidance, especially for financial institutions, are also in development to enable science-based target setting in specific industries and across the value chain.
In the upcoming years it will become more and more mandatory for companies to focus on reporting against their target progress consistently and transparently as well as develop concrete plans on how to achieve them.
DFGE can help in building a robust and sufficient detailed data management structure for companies that allow a reliable target progress tracking, especially for Scope 3 emissions. DFGE further supports companies in deriving concrete action plans to achieve their targets. As part of our service, we support companies in defining measures as well as in the practical implementation of those. If you have further questions, please contact us via or by phone at +49 8192-99733-20.
Sources on SBTi:
SCIENCE-BASED NET-ZERO Scaling Urgent Corporate Climate Action Worldwide
SCIENCE BASED TARGETS INITIATIVE ANNUAL PROGRESS REPORT, 2021; May 2022