SBTi Explained: Science-Based Targets for Businesses

The Science Based Targets initiative (SBTi) has become the gold standard for corporate climate ambition. In 2026, setting science-based targets is no longer a nice-to-have - it's increasingly expected by investors, regulators, customers, and employees. But what exactly is SBTi, and how do you develop targets that will pass validation? This guide walks you through everything you need to know.

What is the SBTi and Who Runs It?

The Science Based Targets initiative is a global collaboration between the Carbon Disclosure Project (CDP), the United Nations Global Compact, the World Resources Institute (WRI), and the World Wide Fund for Nature (WWF). Together, these organizations set the criteria and validate corporate climate targets to ensure they align with the latest climate science.

In simple terms, SBTi answers this question: what reduction percentage does my business need to achieve to play its fair share in limiting global warming to 1.5°C or well-below 2°C? Rather than picking an arbitrary reduction target, SBTi works backward from the climate science, using climate models and carbon budgets to determine what your specific sector and business need to do.

SBTi has validated over 7,000 targets across more than 2,000 companies globally as of 2026. Major corporations across every sector - from tech to consumer goods to financial services - now use SBTi methodology. The initiative has become a key benchmark for climate leadership and is increasingly referenced in ESG ratings, investor due diligence, and procurement requirements.

The Four Partner Organizations

Each partner brings distinct expertise:

• CDP: Operates the world's largest corporate environmental disclosure platform
• UN Global Compact: Provides global governance and stakeholder convening
• WRI: Delivers climate science, economics, and policy expertise
• WWF: Contributes conservation science and supply chain knowledge

Why SBTi Matters

Science-based targets provide credibility. When you set an SBTi-validated target, you're not making a marketing claim - you're submitting to independent, expert review against published criteria. This builds trust with investors, regulators, and stakeholders. In a regulatory environment where carbon reduction plans and mandatory climate disclosures are becoming standard, having validated science-based targets strengthens your compliance position and reduces climate-related risk.

Near-Term Targets vs Long-Term Net Zero Commitments

SBTi distinguishes between two timeframes, and most businesses will commit to both.

Near-Term Targets (5-10 Years)

Near-term targets typically cover the next 5-10 years (often aligned to 2030 or 2035). These targets are specific, measurable, and focus on absolute or intensity-based emissions reductions. For example: "Reduce absolute Scope 1 and 2 emissions by 42% by 2030 from a 2022 baseline."

Near-term targets drive immediate action. They're concrete enough to influence capital allocation, procurement decisions, and operational strategy. They also provide a checkpoint - investors and regulators can assess whether your company is on track, not just making distant promises.

Long-Term Net Zero Targets (2050)

Long-term targets typically extend to 2050 and commit to net zero greenhouse gas emissions. For most businesses, this means reducing emissions by 90%+ and neutralizing residual emissions through high-quality carbon removal.

Long-term targets show systemic ambition. They acknowledge that reaching net zero requires fundamental business transformation - new technologies, circular business models, or portfolio change - not just incremental efficiency. Read more about the net zero vs carbon neutral distinction to understand how SBTi defines "net zero" precisely.

Why Both Matter

Regulators and investors increasingly expect both. The UK's Financial Conduct Authority, the SEC, and emerging CSRD guidance all ask for medium-term and long-term climate targets. SBTi aligns with this expectation - your near-term target shows you're serious now, and your long-term target shows you have a strategic direction.

1.5°C vs Well-Below 2°C Pathways: Which Applies to Your Business?

The Paris Agreement set two temperature goals: limit warming to 1.5°C, or at least "well-below 2°C." SBTi operationalizes these through two distinct pathways, and your business must choose one.

The 1.5°C Pathway

The 1.5°C pathway is the more ambitious of the two. It aligns with the latest IPCC science and is considered necessary to avoid the most severe climate impacts. Businesses choosing 1.5°C commit to deeper, faster reductions - typically 42-45% by 2030 for Scope 1 and 2 combined.

The 1.5°C pathway is increasingly expected of large corporations, particularly in high-emission sectors. Many investors and major clients now specify it as a requirement. If your business operates in a high-carbon sector (energy, automotive, chemicals, cement) or is subject to EU climate law (including CSRD), 1.5°C is likely the more defensible choice.

The Well-Below 2°C Pathway

The well-below 2°C pathway is less stringent, typically requiring 25-30% reductions by 2030. Some sectors where transition is slower may find this more achievable, though it's increasingly seen as insufficient by leading investors and regulators.

Which Should You Choose?

• 1.5°C: If you're a large corporation, in a high-emission sector, or operating in regulated markets (EU, UK), choose 1.5°C.
• Well-below 2°C: If you're smaller and earlier in your climate journey, this can be a starting point - though many businesses upgrade to 1.5°C after their first validation.

SBTi allows you to upgrade from well-below 2°C to 1.5°C later, but choosing 1.5°C upfront sends a stronger market signal.

SBTi SME Programme: Simplified Pathways for Smaller Businesses

Large corporations have resources to set detailed, sector-specific science-based targets. Smaller businesses often lack this capacity. That's why SBTi introduced an SME programme in 2024, which has now matured significantly as of 2026.

What is the SME Programme?

The SME programme provides pre-built, sector-specific target pathways for small and medium-sized enterprises. Instead of developing custom targets from scratch, SMEs can adopt standardized reduction percentages that SBTi has already validated for their sector and company size.

Key Benefits

• Simplified process: No need to hire consultants to develop complex climate models
• Pre-validated pathways: Targets meet SBTi criteria immediately upon adoption
• Cost-effective: Significantly lower validation fees than standard SBTi targets
• Faster time-to-validation: Weeks or months instead of 6-12 months

Eligibility

The SME programme is open to businesses with less than 500 employees or less than EUR 100 million annual turnover. If you fall into this category, the SME pathway can dramatically accelerate your SBTi journey.

Step-by-Step: How to Set and Validate Science-Based Targets

Setting an SBTi-validated target follows a structured process:

Step 1: Commit

Publicly commit to developing science-based targets. This signals intent to investors and stakeholders and creates accountability. Your commitment letter should state your target temperature pathway (1.5°C or well-below 2°C) and your near-term target year (typically 2030 or 2035).

Step 2: Develop Your Targets

Work with your climate or sustainability team (and possibly external consultants) to calculate what reduction percentage aligns with your sector and the chosen pathway. This requires:

• Establishing a robust baseline year and emissions baseline (typically your most recent fiscal year)
• Deciding on absolute vs intensity-based targets (absolute is usually stronger)
• Including all material Scope 1, 2, and Scope 3 emissions
• Calculating your fair-share reduction percentage using SBTi's online tool or working with a consultant

Step 3: Submit for Validation

Submit your targets to SBTi using their online portal. You'll upload your target document, baseline data, and supporting climate models. SBTi's technical team reviews for alignment with criteria.

Step 4: Iterate if Needed

SBTi may request clarifications or adjustments. Most targets require one or two rounds of feedback before approval.

Step 5: Announce and Disclose

Once validated, announce your SBTi targets publicly. Update your climate strategy, board disclosures, and ESG reports. Include your official SBTi validation badge in sustainability reports.

Step 6: Monitor and Report

Annually track progress against your targets. Report in your TCFD, BRSR, SECR, or CSRD disclosures (depending on your jurisdiction). SBTi targets must be reported consistently and transparently.

Why Scope 3 Targets Are Mandatory When Applicable

One of SBTi's strongest requirements is the inclusion of Scope 3 (value chain) emissions. If Scope 3 exceeds 40% of your total emissions, you must set a Scope 3 target to pass SBTi validation.

Why This Requirement Exists

Scope 3 emissions - including supplier emissions, customer use of your products, and end-of-life - often dwarf Scope 1 and 2. For a software company, Scope 3 might be 95% of total emissions. For a consumer goods firm, it could be 85%. Ignoring Scope 3 means ignoring the bulk of your climate impact.

What Counts as Scope 3

SBTi recognizes 15 Scope 3 categories:

• Purchased goods and services (usually the largest)
• Capital goods
• Fuel and energy-related activities
• Upstream transportation and distribution
• Business travel
• Employee commuting
• Upstream leased assets
• Downstream transportation
• Processing of sold products
• Use of sold products (often the biggest for manufacturers)
• End-of-life treatment of sold products
• Downstream leased assets
• Franchises
• Investments
• Other

Making Scope 3 Measurable

Many companies struggle with Scope 3 measurement because supplier data is sparse. SBTi allows you to use:

• Spend-based methodologies (multiplying supplier spend by average sector emissions intensity)
• Physical unit data where available
• Hybrid approaches combining direct data and estimates

Tools like Greenio can help you systematize Scope 3 data collection and ensure your baseline and targets are robust.

FAQ: Science-Based Targets

What is the SBTi and who runs it?

The Science Based Targets initiative is a collaborative effort by the Carbon Disclosure Project (CDP), UN Global Compact, World Resources Institute (WRI), and World Wide Fund for Nature (WWF). It sets criteria and validates corporate climate targets to ensure they align with climate science and limiting warming to 1.5°C or well-below 2°C.

How long does SBTi validation take?

Validation typically takes 3-6 months for standard targets and 2-4 weeks for SME programme targets. The timeline depends on the complexity of your targets, the quality of your baseline data, and how quickly you respond to SBTi's technical review queries.

Is SBTi mandatory or voluntary?

SBTi is currently voluntary. However, in 2026, it's increasingly expected by investors, regulators, and major procurement partners. If you're a large company in Europe subject to CSRD, setting science-based targets is practically mandatory due to regulatory expectations. For smaller businesses, it remains voluntary but increasingly valuable for market competitiveness.

When should we commit to SBTi targets?

The sooner the better. Committing signals climate leadership and gives you 24 months to develop and submit targets for validation. Most companies commit immediately after establishing their GHG Protocol-compliant emissions baseline. Earlier commitment allows more time for internal alignment and strategy development.

Can SMEs set science-based targets?

Yes - absolutely. The SBTi SME programme makes this accessible and affordable for businesses with fewer than 500 employees or EUR 100 million in turnover. SMEs can adopt pre-validated sector pathways without building custom climate models, reducing both cost and timeline.

Conclusion

Science-based targets have moved from optional to expected in 2026. Whether you're a multinational corporation or a 100-person firm, SBTi provides a credible, science-backed framework for climate ambition. By committing to SBTi targets, you align your business with climate science, build stakeholder trust, and reduce climate-related risk.

Your next step is straightforward: establish your GHG Protocol-compliant emissions baseline (Scopes 1, 2, and material Scope 3), decide on your temperature pathway (1.5°C or well-below 2°C), and then publicly commit to developing science-based targets. From there, the SBTi framework guides you through development and validation.

Whether you use the standard SBTi pathway or the simplified SME programme, getting validated targets in place positions your business as a climate leader - and increasingly, as a business that meets investor and regulatory expectations for 2026 and beyond.