What is the Science-Based Targets initiative (SBTi) and what issues does it raise?
Science-based targets provide companies with a clearly-defined path to reduce emissions in line with the Paris Agreement goals.
Formed in 2014 by a coalition of non-profit groups, the SBTi recently published its annual monitoring report, showing that more companies set targets through the SBTi in 2022 than over the previous seven years combined.
Companies that go through the SBTi process first make a commitment to set a science-based target, after which they have 24 months to develop their target in line with the SBTi’s criteria. The SBTi then validates that the target is consistent with the Paris Agreement goal of preventing global temperatures increasing above 1.5 degrees Celsius against pre-industrial levels.
A total of 1,097 companies published their SBTi-validated emissions reduction targets last year. The SBTi says that companies representing 34% of the global economy by market capitalisation have committed to science-based targets. This includes 69% of FTSE 100 companies and 42% of S&P 500 companies.
In total, 2,079 companies have had targets validated by the SBTi. A further 2,151 companies have made commitments, but are yet to complete the process of setting targets.
However, not all companies that made commitments to the SBTi can or are willing to follow through with their emissions reduction targets.
The SBTi has removed 121 firms, including Amazon, from its list of companies with science-based commitments. Amazon claimed in a statement on August 3 it was “difficult for us to submit in a meaningful and accurate way” due to changes in the SBTi’s requirements for companies submitting targets.
Which highlights the problems with effective targets being verified. One key problem is that the economics don't work in emission-reduction plans, or rely on technologies that don’t yet exist. A voluntary commitment, such as the SBTi, may not be enough of an incentive for some companies to determine detailed plans, he adds.
In addition, are companies that have had their targets validated by the SBTi genuinely taking meaningful action on their emissions?
According to a recent report The New Climate Institute (NCI), of 25 companies the NCI analysed, only one had been validated against its new “net zero standard”.
This raises the claims that dogged SBTi over the years – that it is a platform for greenwashing. Firms rated as 1.5C-compatible by SBTi but as “very low integrity” by the New Climate Institute report include Accenture, BMW Group, Nestle and IKEA Novartis and Unilever.
With integrity at stake businesses need to ensure that their emissions targets are truly achievable, and the SBTi need to scale up to ensure an efficient, independent and reliable ratings for all stakeholders.
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