Climate change is no longer a distant threat, and businesses are facing increasing pressure to reduce their environmental impact. Setting ambitious yet achievable emissions reduction targets is crucial, and this is where the Science Based Targets initiative (SBTi) comes in.
What is SBTi and Why Does it Matter?
The SBTi is a collaborative effort between four leading institutions – CDP, the UN Global Compact, World Resources Institute (WRI), and WWF. It drives ambitious corporate climate action by defining and promoting best practices in emissions reductions. The initiative provides a framework for companies to set science-based targets (SBTs) aligned with the goal of limiting global warming to well below 2°C, preferably 1.5°C, compared to pre-industrial levels.
Here’s why SBTi plays a critical role in a company’s sustainability journey:
- Science-based Approach: Unlike arbitrary reduction goals, SBTs are grounded in climate science. They ensure companies are contributing their fair share to achieving the Paris Agreement goals. This scientific rigor builds trust with stakeholders and provides a clear roadmap for decarbonization.
- Credibility and Transparency: The SBTi validation process independently assesses a company’s targets, ensuring they are ambitious and aligned with climate science. This validation adds credibility to a company’s sustainability efforts and fosters trust with investors, consumers, and other stakeholders.
- Competitive Advantage: In a world increasingly focused on sustainability, setting SBTs demonstrates a company’s commitment to environmental leadership. This can attract environmentally conscious investors, enhance brand reputation, and position a company for success in a low-carbon economy.
- Risk Management: Climate change poses significant risks to businesses, such as disruptions to supply chains, regulatory changes, and reputational damage. Setting SBTs helps companies proactively manage these risks by fostering innovation and resource efficiency.
- Collaboration and Innovation: The SBTi framework encourages companies to engage with their value chain partners to reduce emissions collaboratively. This can lead to innovative solutions and broader sustainability benefits across industries.
The SBTi Journey: A Step-by-Step Guide
The SBTi process empowers companies to take a structured approach to setting and achieving their decarbonization goals. Here’s a breakdown of the key steps:
- Commitment: A company publicly announces its commitment to setting SBTs through the SBTi website.
- Target Setting: The company works with internal teams and external experts to develop emissions reduction targets aligned with the SBTi criteria.
- Submission and Validation: The company submits its targets for SBTi’s independent assessment. This process involves providing detailed information on emissions calculations, reduction methodology, and long-term decarbonization strategy.
- Approval and Communication: Once approved, the company receives a formal SBTi validation, which signifies their commitment to science-based climate action. They can then publicly communicate their SBTs and their roadmap for achieving them.
- Implementation and Reporting: Following the validation, it’s crucial for companies to implement a robust action plan to achieve their SBTs. This may involve investments in renewable energy, operational efficiency improvements, product lifecycle assessments, and collaboration with suppliers. Regular progress reporting and updates to SBTi demonstrate a company’s commitment to the journey.
Beyond Setting Targets: The Ongoing Journey
The SBTi process is not a one-time event. As scientific understanding evolves and technological advancements emerge, companies are encouraged to revisit and update their SBTs regularly to reflect the latest climate science and ensure they remain on track for a low-carbon future.
Conclusion: Partnering with Science for a Sustainable Future
The SBTi framework provides a clear pathway for companies to navigate the complexities of decarbonization. By setting ambitious science-based targets, companies can not only contribute to mitigating climate change, but also unlock a range of benefits – from fostering innovation to strengthening investor confidence. As the world transitions to a low-carbon economy, companies that embrace SBTi will be well-positioned to lead the way and build a more sustainable future for all.
If you would like to understand how the SBTi’s rules and regulations would impact your company, get KarbonWise to make the reporting aeries, efficient and faster.