The Science Based Targets initiative (SBTi), the global body enabling businesses to set emissions reduction targets in line with climate science, is unveiling a new strategy to increase minimum ambition in corporate target setting from ‘well below 2°C’ to ‘1.5°C’ above pre-industrial levels. All companies and financial institutions that submit targets from 15 July 2022 will need to align to the new criteria.
The SBTi will focus on accelerating exponential growth in the adoption and implementation of 1.5°C aligned science-based targets, particularly from companies in high-emitting sectors and across G20 countries. The new strategy includes the adoption of new governance and operational models to strengthen the SBTi’s technical authority while providing a more structured and agile project management approach to support efficient, effective and exponential growth. This will include a new and independent technical decision-making body that will help ensure the robustness of key technical decisions, including the selection of scenarios, target setting methods and the approval of new standards and revision of existing ones.
Lila Karbassi, SBTi Board Chair and Chief of Programmes at UN Global Compact, said: “The SBTi has become the de facto standard for businesses to set credible targets to address the climate crisis. However, to have a fighting chance of limiting warming to 1.5°C, we need to urgently scale-up and mainstream the adoption of 1.5°C-aligned targets. This strategy enables us to consistently provide businesses across the globe with the most robust target setting framework so that companies can confidently align with climate science.”
1.5°C-aligned targets are now the most common choice for businesses, representing 66% of all submissions to the SBTi in 2021. Overall, more than 600 companies from across the world have committed to the highest 1.5°C-aligned ambition through the SBTi’s Business Ambition for 1.5°C campaign since it launched in June 2019 in response to the IPCC Special Report on 1.5°C. These companies represent $13 trillion in market capitalization, just less than the GDP of China.
Selwin Hart, Special Adviser and Assistant Secretary-General for Climate Action at the UN, said: “To keep the 1.5 degree goal of the Paris Agreement within reach, we need all hands on deck. Increasing the ambition level of the Science Based Targets initiative is a step in the right direction and provides much needed clarity to businesses on setting credible emissions reduction targets in line with this goal. By updating and strengthening its criteria, this initiative is helping companies set climate science aligned targets to help prevent the worst effects of the climate crisis on people across the world. I urge all companies that have yet to set goals to do so and back up their 1.5°C targets with clear and credible plans to achieve them.”
The new strategy is being rolled out in response to increasing urgency for climate action and the success of science-based targets to date. The announcement comes ahead of the Intergovernmental Panel on Climate Change (IPCC) Working Group I contribution to the Sixth Assessment Report, due to be released on 9 August. To spearhead the new strategy and operational model, Alberto Carrillo Pineda, a co-founder of the SBTi, has been appointed as Managing Director. He said: “COVID-19 and climate breakdown are the two biggest challenges facing life as we know it. We can’t solve either without widespread global action. For COVID, it’s vaccination of people. For the climate, it’s decarbonization of our economies. We need every company to play their part, and set science-based 1.5°C-aligned emission reduction targets to help us halve global emissions in the next eight years.”
Well below 2°C scope 1 and 2 targets will be gradually phased out from the target validation framework for companies and financial institutions. Companies that had targets approved in 2020 or earlier will have until 2025 as per the current SBTi criteria to update their targets. Companies that have been approved after that date will need to review and update their targets at least every 5 years.
Science-based target setting has evolved from a nascent concept in 2015 into a movement covering nearly 20% of the global economy. Recent data shows science-based targets are driving corporate decarbonization – between 2015 and 2020 companies with validated targets cut emissions by 25% compared with an increase of 3.4% in global energy and industrial emissions.
