The Credibility Problem in Climate Targets and Where SBTi Fits In
Corporate sustainability commitments are growing year after year, but how many of them rest on a scientific foundation? Evaluating whether "net zero" or "carbon neutral" pledges correspond to a concrete reduction plan is becoming increasingly difficult for investors and customers alike.
The Science Based Targets initiative (SBTi) was established precisely to fill this credibility gap. SBTi provides a global mechanism that independently assesses and validates whether a company's GHG reduction targets are aligned with the Paris Agreement's goal of limiting global temperature rise to 1.5 degrees Celsius (SBTi, 2023).
Who Is Behind SBTi?
SBTi was founded in 2015 as a partnership between four international organizations:
- CDP (formerly the Carbon Disclosure Project) — the global environmental data disclosure platform
- United Nations Global Compact (UNGC) — the corporate sustainability framework
- World Resources Institute (WRI) — a climate and environmental research organization
- World Wide Fund for Nature (WWF) — an international conservation organization
This partnership structure gives SBTi both scientific and institutional credibility. According to the CDP and SBTi 2023 progress report, more than 4,000 companies worldwide have committed to SBTi, with a combined market capitalization exceeding one-third of global GDP (CDP and SBTi, 2023).
What Does "Science-Based Target" Actually Mean?
For a GHG reduction target to qualify as "science-based," it must be aligned with the Paris Agreement's goal of limiting global temperature rise to 1.5 degrees Celsius above pre-industrial levels (Paris Agreement, 2015). In practical terms, this means the company's emissions reduction pathway must be consistent with the pace of decarbonization that climate science demands.
The SBTi Corporate Manual (v2.1) offers two fundamental approaches for target-setting:
Near-Term Targets
- Cover a 5 to 10 year timeframe.
- Require absolute reductions for Scope 1 and 2 emissions.
- If Scope 3 emissions represent more than 40 percent of total emissions, a Scope 3 target is also mandatory.
- Validated against a 1.5 degrees Celsius-aligned pathway (SBTi, 2023).
Long-Term (Net-Zero) Targets
- Aim for 2050 or earlier.
- Require at least a 90 percent reduction in emissions across the value chain.
- Remaining emissions (10 percent maximum) are neutralized through carbon removal methods.
- Must comply with SBTi's Net-Zero Standard.
How Does the Commitment and Validation Process Work?
The SBTi process consists of four core steps:
-
Commitment letter: The company formally notifies SBTi of its intention to set a science-based target. Targets must be submitted for validation within 24 months of the commitment date.
-
Target development: The company develops its targets in accordance with the SBTi Corporate Manual and SBTi Criteria. Specific reduction rates and timelines are defined for Scope 1, 2, and (where applicable) 3 emissions.
-
Validation: SBTi's technical team evaluates submitted targets against the criteria. Targets are reviewed for alignment with the 1.5 degrees Celsius pathway, scope, and methodology.
-
Public disclosure: Approved targets are published on the SBTi website, and the company commits to progress reporting.
Concrete Benefits for Enterprise Teams
Investor Confidence and Access to Capital
Institutional investors are increasingly demanding science-based climate targets from portfolio companies. Having an SBTi-validated target has become a credibility signal in investor relations. According to the CDP and SBTi 2023 report, companies with science-based targets are reducing emissions at more than twice the global average rate (CDP and SBTi, 2023).
Supply Chain Requirements
Major international buyers have started requiring SBTi commitments from their suppliers. Being part of the supply chain of a customer with Scope 3 targets now requires an SBTi commitment or, at minimum, emissions reporting capability. This pressure is growing rapidly in the automotive, food, retail, and technology sectors.
Regulatory Alignment Advantage
The EU's Corporate Sustainability Reporting Directive (CSRD) requires companies to disclose climate transition plans. SBTi-validated targets can form the backbone of such a transition plan and provide a strong foundation for meeting the requirements of ESRS E1 (Climate Change).
Operational Efficiency
The science-based target-setting process forces companies to map their emission sources in detail. This process makes energy efficiency opportunities, cost savings, and operational risks visible.
SBTi Adoption in Turkey
The number of Turkish companies committing to SBTi grows each year. Industrial companies that export to the EU market are entering the SBTi process particularly driven by supply chain pressure. SBTi commitments are becoming increasingly common among BIST 100 index companies.
Factors accelerating this trend:
- CBAM pressure: The reporting and pricing of embedded emissions in carbon-intensive products exported to the EU makes emission reduction targets more urgent.
- International investor expectations: International investors in Turkey's major holding companies are demanding SBTi-aligned climate strategies.
- Competitive advantage: Early movers gain an edge in supply chain relationships and access to green financing.
Frequently Asked Questions
How much does an SBTi commitment cost? The commitment letter is free. For target validation, SBTi applies a tiered fee structure based on company size. A simplified, lower-cost process is available for SMEs.
What happens if our targets are not approved? SBTi provides reasoned feedback and allows companies to revise and resubmit. The process is focused on improvement rather than rejection.
Can we start if our Scope 3 data is insufficient? Yes. SBTi allows for progressive improvement of Scope 3 data. Sector averages and spend-based estimates can be used in the initial years, with a transition to supplier-specific data over time.
Next Steps
SBTi is the most powerful mechanism for transforming corporate climate commitments from statements of good intent into measurable, verifiable targets. Supply chain pressures, investor expectations, and regulatory developments are making this mechanism more important every day.
Action Item: Download the SBTi Corporate Manual (v2.1) and review it alongside your Scope 1 and 2 emissions inventory. If you do not yet have an inventory, start by building an ISO 14064-1 compliant GHG inventory first.
References:
- SBTi, Science-Based Target Setting — Corporate Manual (Version 2.1), 2023.
- SBTi, SBTi Criteria and Recommendations (Version 5.1), 2023.
- CDP and SBTi, Ambitious Corporate Climate Action: Progress Report 2023.
- Paris Agreement, United Nations Framework Convention on Climate Change (UNFCCC), 2015.
See how enterprise teams track progress toward science-based targets.