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Science-based target Initiative (SBTi)
Climate change is a hazard to the entire environment; thus, we must promptly cut global greenhouse gas emissions to mitigate the worst effects on our civilization. The IPCC’s top scientists have emphasized the need of keeping global warming to 1.5°C over pre-industrial levels, although the globe is now growing much warmer. Businesses and companies are directly or indirectly responsible for the bulk of world emissions. These corporations must play a critical role in our efforts to meet the Paris Agreement’s target.
The SBTi provides a well-defined roadmap for businesses and financial institutions to cut their greenhouse gas emissions (GHG), allowing them to avoid the worst effects of climate change and ensure future corporate success. These targets are deemed science-based when they match with the most recent climate considerations needed to accomplish the Paris Agreement’s goals of limiting global warming to well below 2°C above pre-industrial levels and participating in efforts to limit warming to 1.5°C. The SBTi is a collaboration of CDP, the UN Global Compact, the World Resources Institute (WRI), and the World Wide Fund for Nature (WWF). The effort identifies and promotes best practices in science-based target setting, provides tools and assistance for removing barriers to adoption, and conducts external evaluations.
The SBTi Net-Zero Standard has launched ahead of COP26, giving the world’s first framework for corporate net-zero target setting. The Standard, which is based on climate science and 1.5°C pathways, mandates industries to undertake swift and profound emission cuts through both near- and long-term science-based objectives. We want this to be the new normal for all companies. The majority (80%) of enterprises with authorized objectives in 2021 were aligned, according to the SBTi’s Business Ambition. Almost two-thirds (63%) of firms with classified objectives indicate they expect to reduce emissions faster than is necessary. Encouragingly, 96 percent of SBTi enterprises with authorized science-based objectives have scope 3 emissions targets. As the SBTi achieved a ‘critical mass’ internationally and in key areas, the most influential firms are now establishing science-based objectives, with 27 percent of high-impact companies setting science-based targets globally. The number of firms participating in the program has now reached 2252, with 1082 setting science-based objectives and 1171 committing to limit global warming to 1.5 degrees Celsius. The aims assist firms in combating climate change and certifying future growth, saves money, encourage regulatory flexibility, increase investor trust, stimulate innovation and effectiveness, and attract “progressively-aware customers.”
There are three target-setting methods from which companies can choose to implement based on the suitability of the methods in various sectors. There are three methods available- Absolute Emissions Contraction, the Sectoral Decarbonisation Approach, and Economic Intensity Contraction. Generally, a common SBTi method has three components: Carbon Budget, Emissions Scenario, Allocation Approach (Convergence or Contraction)
Absolute Emissions Contraction
It is a way of establishing absolute objectives that use the contraction of absolute emissions. Companies using this strategy cut their emissions at the same pace, regardless of their beginning emissions performance. Following that, an absolute emissions reduction objective is defined as a total decrease of GHGs emitted to the atmosphere by the target year in comparison to the base year. The yearly linear decrease for attaining objectives should be below 2°C scenarios at 2.5 percent. Companies in affluent nations should set objectives of a 4.2 percent yearly linear reduction to limit warming to 1.5°C. This method is a straightforward approach to setting and tracking progress toward goals that is relevant to most industries.
Sectoral Decarbonization Approach (SDA)
The SDA is a method for determining physical intensity targets that use emission intensity merging. An intensity objective is defined as a reduction in emissions relative to a certain business parameter, such as the company’s production output or tonnes of CO2e per tonne product produced. The SDA anticipates worldwide convergence in the intensity of important industries’ emissions by 2060. The SDA employs the B2DS scenario from the International Energy Agency’s (IEA) publication “Energy Technology Perspectives (ETP) 2017,” which includes emissions and activity predictions used to compute sectoral paths aimed at keeping temperatures well below 2°C.
Economic Intensity Contraction
Greenhouse Gas Emissions per Value Added (GEVA) is a method for determining economic intensity objectives that use economic intensity contraction. The GEVA method targets are defined by an intensity decrease of tCO2e/$ value added. 17 Companies are obligated to lower their GEVA by 7% every year under the GEVA approach (compounded). The 7% year-on-year reduction rate is predicated on a 75% decrease in absolute emissions from 2010 levels by 2050.
How can companies set a Science-Based Target Initiative (SBTi)?
The business sector can play an important role in decreasing greenhouse gas emissions. It is critical to include science-based goals in sustainable management.
Developing a science-based goal consists of five steps:
Sign up online and write letters to pledge for establishing a science-based target or even have your current targets independently validated.
- Use the SBTi commitment procedure to register online. Small and medium-sized businesses must instead choose the simplified approach for SMEs.
- Fill out the usual commitment letter and send it in. We encourage businesses to commit to net-zero energy and join the 1.5°C Business Ambition and the Race to Zero. Please note that at this time, oil and gas firms, airports, and companies that use more than 50% coal or are in danger of adopting a non-parental strategy are not eligible to participate in the Race to Zero. Please email Race to Zero at [email protected] if you have any questions.
- On our website and our partner website, We Mean Business, all committed firms are identified as “Committed.”
- After you’ve committed, you’ll have 24 months to submit your aims to the SBTi.
- Develop a target
Create your target(s) based on scientific criteria.
- SBT provides thorough information to help your business through this process.
- They advise organizations to start by reading the SBTi How-To Guide or Net-Zero Getting Started Guide for an overview of the target development process, then examining the target setting criteria in the SBTi Criteria and Recommendations or Net-Zero Standard Criteria. Companies should examine the Target Validation Protocol and utilize the target setting tool, the target setting tool for well-below 2°C objectives, or the net-zero tool to begin designing targets to better understand these criteria.
- Some industries have their own set of rules and regulations.
- From the time you signed your commitment letter until the time you submitted your aim, you had 24 months.
Validate your goal by submitting it.
Fill out the appropriate form for your organization and target group:
- Form for submitting corporate short-term goals
- Part I of the SBTi Net-Zero Target Submission Form (Word), Part II of the SBTi Net-Zero Target Submission Form (Excel), and the Net-Zero target-setting tool
- The near-term target submission form for financial institutions
- SMEs can take a more direct approach.
To minimize delays, SBT recommends that you carefully evaluate the relevant materials and complete the form clearly and correctly.
- Use the SBTi booking system to schedule your validation.
SBT’s technical specialists will analyze your application, evaluate something against their science-based standards, and provide detailed comments on their choice.
- They provide a variety of costed target validation services, including Validation of near-term science-based targets, including a second submission for validations that are rejected and resubmitted within six months: $9,500
- Companies who want to align their aims with our new minimum ambition level of 1.5°C, or update or change previously authorized targets, can do so by updating or editing the following: $4,750
- Small and medium-sized companies (SMEs) should submit a science-based target submission shortly: $1,000.
- Submissions with a net-zero target: $9,500
- Package Rate: $12,750 – Near-term science-based target update + Net-zero target submission
- Submission of near-term science-based targets + submission of net-zero targets – $14,500 for the entire package
- SME submissions with a net-zero target: $1,000
- Submission goal for financial institutions: $14,500
Declare your goal and notify your stakeholders.
- We’ll post your goal on our Companies Taking Action page and partner websites after we’ve approved it.
- Unless otherwise specified, we publish objectives one month after they have been approved. Your goal must be made public within six months of approval, or it will need to be revalidated to ensure it meets the most recent scientific requirements.
- A welcome package will be sent to your organization with information on how to communicate with your new target.
Make your progress public.
- Following approval, you should report your company’s emissions on an annual basis and track progress toward your goal.
- Disclosure through CDP, yearly reports, sustainability reports, and your company’s website are all suggestions for reporting.