Business giants named and shamed for flouting science-based targets pledges

The Science-Based Targets Initiative (SBTi) gives corporates two years to develop credible, approved climate targets after they signal their intention to do so publicly.

Previously, the SBTi has quietly removed businesses that fail to have targets approved within this timeframe from its dashboard. Going forward, these firms will be kept on the dashboard and marked as having their ‘commitment removed’.

The SBTi gave a six-month grace period to companies ahead of the change. This grace period ended at the start of August.

More than 100 businesses have been listed as having their 2030 commitments removed since the change took effect.

These businesses include e-commerce giant Amazon USA, American restaurant chain Panera Bread and British food manufacturer Branston. Ireland’s Electricity Supply Board and public transport operator Translink have also been singled out.

Some companies in the green economy, including UK-based Forest Carbon and Spain’s GRI Renewables, are also listed as ‘commitment removed’.

In a statement, the SBTi said: “The majority of businesses that commit to setting science-based targets successfully go on to do so. The new policy makes it clear where companies have committed to set targets but then failed to comply.

“Not only does this increase transparency and accountability around commitments and eventual validation, it acts as a major disincentive for companies to make commitments without taking action.”

Some 5,700 companies have committed to set SBTi-approved targets to date. More than 3,200 have had their targets approved.

Companies listed as ‘commitment removed’ are being invited to submit targets for consideration, belatedly. They can still gain approval if they wish.

The SBTi has updated its minimum target-setting requirements in recent years. In July 2021, it began phasing out approvals for 2C-aligned targets, to make 1.5C-aligned targets the norm.

SME loopholes?

The news from the SBTi comes shortly after a scathing report was published about the initiative’s approach to target-setting for small and medium-sized businesses (SMEs).

The SBTi was initially set up to verify corporate climate action but has gone on to provide more detailed, sector-specific guidance – including pathways for SMEs.

Consultancy Eight Versa’s report this week outlines some remaining challenges for SMEs in adopting SBTi-aligned targets. A key challenge is a requirement for SMEs to reduce emissions on an absolute basis, whereas some larger businesses can reduce emissions intensity.

This is particularly pronounced in the Net-Zero Standard, which requires a 90% reduction in absolute emissions by 2050. Eight Versa argues that many growing SMEs would not be able to achieve that level of decarbonisation – even those producing clean technologies.

The report also questions why rules on reducing Scope 3 (indirect) emissions are so different for corporates and SMEs.

Eight Versa’s director Chris Hocknell said: “The SBTi methodology is simply not suitable for today’s dynamic and disruptive business environment. To tackle climate change, we obviously must slash our greenhouse gas emissions. However, for example, we must allow companies making innovative green technologies space to breathe. Under the current SBTi framework, that is simply not possible.”

The report also takes aim at corporates who fail to follow through on their SBTi commitments. It notes that dozens fail to gain approval in the two-year timeframe, and adds that many with approved targets are still not on track to achieve them.

CDP revealed earlier this year that only one-third of the companies reporting climate targets through its platform are either on track or almost on track to meet them. CDP has called the gap between ambition and delivery “worrying”.