SBTi to increase minimum target-setting requirements to 1.5C
The Science Based Targets initiative (SBTi) is updating its strategic approach to increase the minimum ambition for corporate climate action from "well below 2C" to 1.5C above pre-industrial levels, as envisioned by the Paris Agreement.
When the SBTi was introduced in 2015 as a nascent movement for corporate sustainability, it encouraged businesses to set targets in line with the Paris Agreement pathways, namely 2C, “well below” 2C and 1.5C trajectories.
Six years on, the movement now covers nearly 20% of the global economy. To reflect on the need to combat the climate crisis in line with the 1.5C limit, the initiative is updating its target validation criteria.
The SBTi’s board chair and chief of programmes at UN Global Compact Lila Karbassi 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 1.5C, we need to urgently scale-up and mainstream the adoption of 1.5C-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.”
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. In fact, 1.5C-aligned targets accounted for 66% of all submissions to the SBTi in 2021.
In total, more than 600 companies globally have committed to 1.5C targets through the SBTi’s Business Ambition for 1.5C since its launch in 2019. These companies represent $13trn in market capitalisation.
As part of the new strategy, “well below” 2C targets will be phased out from the validation framework. Any corporate that had targets approved in 2020 or earlier has until 2025 to update targets.
All companies and financial institutions that submit targets from 15 July 2022 will need to align to the new criteria. A particular focus will be given to companies in high-emitting sectors and across G20 countries.
The SBTi will set up a new independent technical decision-making body to oversee key decisions, such as scenario selection, target-setting methods and approval of future SBTi standards.
Alberto Carrillo Pineda, a co-founder of the SBTi, has been appointed as managing director of this new body.
"Covid-19 and climate breakdown are the two biggest challenges facing life as we know it,” Pineda said. “We can't solve either without widespread global action. For Covid-19, it's vaccination of people. For the climate, it's decarbonisation of our economies. We need every company to play their part, and set science-based 1.5C-aligned emission reduction targets to help us halve global emissions in the next eight years.”