The global urgency surrounding climate change is intensifying as businesses, governments and organisations worldwide are stepping up to the challenge of achieving net-zero emissions by 2050. One of the main strategies to attain this goal is through the Science-Based Targets (SBTs) developed by the Science-Based Target Initiative (SBTi). The SBTi was founded in 2014 to develop standards, tools and guidance to assist companies in setting greenhouse gas (GHG) emissions reduction targets in line with climate science. The current standard (Corporate Net-Zero Standard) covers a range of criteria, including the GHG emissions inventory and target boundary, emissions accounting requirements and a target time frame. In this article, we explore what SBTs are, why they are important and how they help organisations in their journey towards a sustainable future.

What are science-based targets (SBTs)?

Essentially, SBTs are GHG emission reduction goals that show businesses how much and how quickly they need to reduce their GHG emissions to prevent the worst effects of climate change. They are based on the latest climate science and aligned with the global goal of limiting global warming to well below 2°C - preferably to 1.5°C - above pre-industrial levels, as outlined in the Paris Agreement. These targets are developed based on scientific models that calculate the emissions reductions needed by businesses to meet the necessary global temperature thresholds. Entities that join the SBTi are required to set a net-zero target that clearly and transparently communicates each of the target’s relevant components, including the net-zero target year, the magnitude of emissions reductions that will be achieved for net-zero science-based targets and a base year.

Origin of the SBTi

Before 2015, a consistent framework for setting organisations’ net-zero ambitions was lacking, leading to varied and unaccountable targets. To address this, four of the largest environmental organisations worldwide - CDP (formerly the Carbon Disclosure Project), the UN Global Compact, the World Resources Institute (WRI) and the WWF - World Wildlife Fund  - partnered together to form the Science-Based Targets Initiative (SBTi). The SBTi developed the Corporate Net-Zero Standard, which is subject to successive revisions and which includes guidance on near-term and net-zero targets. The standard provides a validation process for companies to demonstrate that their net-zero targets and emissions reduction targets are adequate to limit global warming, as per the Paris agreement. The emissions reductions must be achieved through absolute reductions, not offsets. The standard caters to a range of companies and institutions and includes corporate and small to medium enterprise (SME) routes, with the SME route having less stringent requirements. Currently more than 7,500 companies that have joined the SBTi initiative.

Why are science-based targets Important?

Credibility and transparency
SBTs provide an evidence-based, transparent approach to setting and tracking emissions reductions, ensuring that organisations are contributing to global climate goals in a credible way, aligned with climate science recommendations. For example, IKEA committed to reducing by 2050 the absolute GHG emissions from its value chain by at least 90% compared to 2016, with residual emissions being neutralised by the removal and storage of carbon within the value chain. This science-based target was validated by the SBTi in 2024.

According to the SBTi monitoring report dated 31 December 2023, the geographic spread* of companies with science-based targets was as follows: North America 14%, Latin America (2%), Africa (1%), MENA (1%), Europe (53%), Asia (27%) and Oceania (2%). Japan, the UK and the USA have the highest numbers of businesses with approved targets.
* i.e. share per region of total companies with validated science-based targets

Clarity and accountability
SBTs deliver clarity to both internal and external stakeholders. Setting these targets creates a clear roadmap for companies' emissions reductions, allowing for targeted interventions at key points of production processes, supply chains and energy use. In addition, it helps organisations prioritise actions based on the most significant emissions sources, ensuring that efforts are focused on achieving the most substantial impact.  

Risk mitigation and emerging opportunities
The transition to a low-carbon economy poses both risks and opportunities. Businesses that fail to align with the science of climate change risk facing increasing regulatory scrutiny, reputational damage or financial penalties, as governments implement more stringent climate policies. In contrast, businesses that set science-based targets are better positioned to navigate this transition, boost innovation and capitalise on emerging opportunities, such as clean technologies, renewable energy and low-carbon solutions.

Market leadership and competitive advantage
Sustainability is becoming a significant factor in consumer choices and investor decisions, so businesses that lead with ambitious science-based targets gain a competitive edge. Companies that set SBTs demonstrate leadership in environmental stewardship, appealing to a larger segment of their stakeholders. Science-based targets also enhance a company’s attractiveness to investors who are increasingly integrating Environmental, Social and Governance (ESG) considerations into their decision-making processes.

How do science-based targets help achieve net-zero?

Science-based targets lead the way to a net-zero economy and directly contribute to the global net-zero target by ensuring that the emissions reductions are both scientific and achievable. The ways in which SBTs guide organisations in meeting their net-zero commitments include:

Guiding emissions reduction
SBTs cover scope 1, scope 2 and scope 3 emissions, ensuring that all areas of a company’s carbon footprint are considered. Scope 1 emissions refer to direct emissions from owned or controlled sources, while Scope 2 emissions cover indirect emissions from the consumption of purchased electricity, steam or heating. Scope 3 emissions, often the largest and hardest to manage, come from the entire value chain, including suppliers and customer use of products.

Tracking and reporting progress
SBTs help businesses track their progress against scientifically validated benchmarks. Regular reporting and tracking ensure that organisations stay on course and make adjustments as necessary along their journey to net-zero. Tools such as  the SBTi target-setting tool enable companies to quantify their emissions reduction targets and align them with the latest climate science. Companies that have set their net-zero targets in line with SBTi are required to publicly report their greenhouse gas (GHG) emissions inventory and progress against published targets every year.

Conclusion

The adoption of Science-Based Targets (SBTs) is a critical step for organisations committed to achieving net-zero emissions and driving sustainable growth. By aligning their goals with the latest climate science, businesses not only contribute to global efforts to limit temperature rise but also gain credibility, transparency and a competitive edge. The Science-Based Targets Initiative (SBTi) provides a robust framework that guides businesses in setting and validating their emissions reduction targets, ensuring accountability and measurable progress. 

BDO supports organisations who want to establish their greenhouse gas emission inventory, develop their net-zero, decarbonisation or emissions reduction plan and other sustainability and ESG-related services. Find out about how BDO can help, specifically around Activating your  Sustainability journey and Calculating an organisation's baseline year carbon footprint Please also feel free to reach out to our sustainability experts tagged on this page for more information about your sustainability needs.

Author: Charles Tungwarara
Head of Business Process, ESG & Sustainability, BDO UAE