What SBTi target-setting actually involves

The Science Based Targets initiative (SBTi) provides a framework for corporate emissions reduction targets that are grounded in climate science, specifically, what is required to limit global warming to 1.5C above pre-industrial levels. Companies submit near-term targets (typically 5-10 years) and long-term net zero targets for validation against SBTi's criteria. Near-term targets must reduce absolute Scope 1 and 2 emissions by at least 42 percent and Scope 3 by at least 25 percent within approximately ten years (2030 from a 2020 base). Net zero targets require at least 90 percent absolute reduction across all scopes. SBTi validation is conducted by an independent expert team and confers the right to use the SBTi badge in corporate communications.

Why it's harder in practice than it looks

Scope 3 target coverage requirements depend on materiality

SBTi requires Scope 3 targets when Scope 3 emissions exceed 40 percent of total footprint, which is the case for most companies. The required reduction level (25 percent absolute or intensity-based depending on sector) must be demonstrated against a verified baseline. Companies without a credible Scope 3 inventory cannot set a compliant Scope 3 target, which blocks SBTi validation.

Sector-specific methodologies apply different rules

SBTi has developed sector-specific guidance for financial institutions, buildings, power, transport, steel, cement, and apparel, each with methodology differences that significantly affect target calculation. Companies in covered sectors must use the applicable methodology; applying the wrong one leads to targets that cannot be validated.

The two-year commitment window creates programme management risk

When a company commits to SBTi, it has two years to submit validated targets. Companies that commit without having first built a credible emissions inventory and abatement pathway frequently find themselves unable to meet the submission deadline, which affects both the SBTi commitment and any public communications built around it.

Validation delays are a real programme risk

SBTi's validation queue has faced significant backlogs in recent years. Companies should factor validation timescales into their programme planning and avoid making public commitments about validation timelines that may not be met.

What good looks like

A well-prepared SBTi submission is underpinned by a verified emissions baseline covering all three scopes, uses the correct sector-specific methodology, includes near-term and long-term targets with a documented calculation methodology, and is supported by an abatement plan that demonstrates how the targets will be met. The company has reviewed the SBTi criteria carefully and confirmed target eligibility before formal submission, minimising the risk of resubmission.

When to bring in external support

SBTi methodology selection, target calculation, and submission preparation all benefit from specialist support, particularly for companies in covered sectors with bespoke methodologies. Leafr's network includes SBTi specialists who have supported target development and validation for companies across financial services, manufacturing, retail, and real estate, helping teams navigate methodology choices and prepare submissions that clear validation first time.

Frequently asked questions

What is SBTi and why do companies use it?

The Science Based Targets initiative (SBTi) is a collaboration between CDP, the United Nations Global Compact, World Resources Institute, and WWF that provides a framework and validation service for corporate emissions reduction targets aligned with climate science. Companies use SBTi because validated targets provide external credibility, demonstrating to investors, customers, and regulators that climate commitments are grounded in science rather than set arbitrarily.

What is the difference between an SBTi near-term target and a net zero target?

An SBTi near-term target covers roughly the next five to ten years and must align with a 1.5C reduction pathway, typically at least 42 percent absolute reduction in Scope 1 and 2 and 25 percent in Scope 3 by 2030. An SBTi net zero target applies the Corporate Net Zero Standard and requires at least 90 percent absolute reduction across all scopes by 2050 at the latest, with any residual emissions addressed through permanent carbon removal. Both target types must be submitted separately for validation.

Which companies are required to set Scope 3 targets under SBTi?

SBTi requires Scope 3 targets when a company's Scope 3 emissions are 40 percent or more of total Scope 1, 2, and 3 combined. For most companies in supply-chain-intensive sectors, retail, consumer goods, financial services, Scope 3 far exceeds this threshold. Companies where Scope 3 is less than 40 percent are encouraged but not required to set Scope 3 targets.

How long does SBTi validation take?

SBTi publishes current processing times on its website, which have varied from a few months to over a year depending on submission volumes. Companies should check current timescales when planning their submission and build buffer into any public communications about expected validation dates. The SBTi FastTrack pathway offers faster validation for a fee for companies meeting specific criteria.

Can a company lose SBTi validation?

Yes. SBTi can remove a company's validated target status if the company fails to disclose annual progress, makes a public statement inconsistent with its SBTi commitment, or significantly revises targets without resubmission. SBTi publishes a list of companies whose targets have been removed, which carries significant reputational consequences. Annual progress reporting aligned with SBTi's disclosure expectations is therefore an ongoing obligation, not just a post-validation formality.