Science-Based Targets (SBTi): A Practical Guide

The Science Based Targets initiative (SBTi) has become one of the most widely cited corporate climate frameworks. Not because it is the most straightforward, but because it is one of the few that requires companies to demonstrate their targets are actually consistent with limiting global warming to 1.5°C. That rigour is also what makes it demanding. Most companies that start the SBTi process underestimate how much work their GHG inventory needs before they can submit.

What Science-Based Targets Are

Science-based targets define how much and how quickly a company must reduce its greenhouse gas emissions to align with the Paris Agreement's 1.5°C pathway. The term 'science-based' means the targets are derived from what climate science says is required — not from what the company finds operationally convenient.

The SBTi sets the standards for what counts as a valid corporate science-based target. It defines:

• Coverage: which scopes (1, 2, 3) must be included and at what threshold
• Timeframe: near-term targets (5–10 years) and long-term net-zero targets (by 2050 or earlier)
• Ambition: the rate of annual emissions reduction required to stay on a 1.5°C trajectory
• Sector-specific pathways: different methodologies apply to power, buildings, transport, finance, and land-intensive sectors (FLAG)

Which Companies Need Science-Based Targets

No regulation currently mandates SBTi targets. But the path from voluntary best practice to effectively required is shortening:

• CSRD ESRS E1: companies in scope must set GHG reduction targets consistent with the Paris Agreement. SBTi provides the most credible methodological framework for meeting that requirement
• Investor pressure: major asset managers and index providers (MSCI, CDP) score companies on science-based target alignment
• Supply chain requirements: large corporates with net-zero commitments increasingly require their suppliers to demonstrate SBTi alignment, since their Scope 3 includes your emissions
• CDP scoring: CDP's climate questionnaire rewards SBTi-committed companies and penalises those without credible targets

The SBTi Validation Process — Step by Step

Getting from 'we want science-based targets' to 'our targets are SBTi-validated' takes most companies 9–18 months. The process has five stages:

• Commit: sign the SBTi commitment letter. This gives you 24 months to submit validated targets
• Develop: calculate your baseline inventory, identify material Scope 3 categories, and model target scenarios using the SBTi Corporate Manual and tools
• Submit: send your target letter and supporting documentation to SBTi for review. SBTi validates whether your targets meet the required ambition and follow the correct methodology
• Communicate: once approved, publish your targets publicly and commit to annual progress disclosure
• Demonstrate: report Scope 1, 2, and material Scope 3 emissions each year; recalculate base year if business boundary changes materially

The most common bottleneck is step 2. Most companies spend 6–12 months building and documenting a GHG inventory they are confident enough to submit. Rushing this stage produces targets that either fail validation or are later identified as methodologically inconsistent.

What Your GHG Inventory Must Look Like Before You Submit

This is the part most guides skip. SBTi validation evaluates the inventory the targets are based on, not just the targets themselves. Your GHG inventory must:

• Cover Scope 1 and Scope 2 completely — no significant unaccounted sources
• Include a Scope 3 screening to identify material categories (any category exceeding 40% of total Scope 1, 2, and 3 must be included in your target)
• Use a documented base year with a recalculation policy for boundary changes
• Apply emissions factors that are version-controlled, geographically appropriate, and documented in your methodology
• Be supported by a methodology document — ideally a GHG Inventory Management Plan — that a reviewer can follow independently

Submissions that are rejected or require significant revision almost always come from inventories with undocumented methodology, inconsistent Scope 3 category coverage, or base year issues that only surface when SBTi reviews the supporting materials.

Common Mistakes in the SBTi Process

• Committing before the inventory is ready: the 24-month clock starts on commitment. If building your inventory takes 18 months, you have 6 months to develop and submit targets
• Excluding Scope 3 without a documented screening: companies often assume their Scope 3 is immaterial. SBTi requires a formal screening to justify any exclusions
• Using the wrong FLAG / non-FLAG split: companies with agriculture, forestry, or land use in their value chain must separate FLAG from non-FLAG emissions and set separate targets for each
• Underestimating Category 1 (purchased goods and services): for most manufacturers, this is the largest Scope 3 category. Spend-based estimates are acceptable initially but must improve over the target period
• Setting targets without modelling the actions required: a validated target with no credible action plan attached is a reputational liability

SBTi and Third-Party Verification

SBTi validation is not the same as third-party assurance. SBTi reviews your targets and methodology; an assurance provider verifies your reported inventory figures. Both are increasingly expected for companies under CSRD — ESRS E1 requires targets aligned with a 1.5°C pathway and recommends third-party assurance of the underlying inventory. Companies preparing for SBTi validation should treat the inventory documentation work as simultaneously preparing them for assurance engagement: the same methodology documentation, QA processes, and data traceability that SBTi reviewers look for are exactly what assurance providers test.