SBTi to ‘transform’ governance as corporate demand for climate target-setting skyrockets

Stock image from UKGBC

The plans, unveiled by the initiative today (13 September), follow on from a 87% year-on-year increase (2021 to 2022) in companies setting out their intention to verify their emissions goal in line with climate science.

More than 3,300 companies have had their emissions goals SBTi-verified to date. The body anticipates that this cohort will grow to exceed 10,000 companies by the end of 2025.

To facilitate this growing demand, the SBTi will look to upscale its target validation service team. It is, therefore, creating a validation entity that is separate from its team developing standards and supporting guidance resources. This will build on a doubling of total headcount at the SBTi within the past 12 months – an increase that has contributed to a 50% reduction in average waiting times for target validations.

At the new standard-setting arm of the SBTi, staff will be tasked with reviewing technical governance. The SBTi has notably created a new independent Technical Council within the past year. This Council reviews and approves SBTi standards before formal adoption, taking into account the latest climate science and changes in corporate climate requirements set by governments.

The SBTi has, in recent times, been urged by NGOs to update its Net-Zero Standard in line with guidance issued by a UN-backed high-level expert group at the COP27 summit in Egypt last winter. It has also been pressed to clarify how smaller businesses could possibly align with this Standard, which requires a 90% reduction in emissions across all scopes, while growing rapidly.

Another key facet of the SBTi’s ‘transformation’ plan is incorporation. The Initiative has, to date, been a partnership-based organisation comprising CDP, WWF, the WRI, the UN Global Compact and the We Mean Business Coalition. It has now incorporated as a company in the UK and has submitted an application to the Charity Commission to become a charity.

The initiative has stated that it “will retain close links with its founding partners”. A key link is the representation of members from each organisation on the SBTi board.

Big-name appointments

As a company with hopes of becoming a charity, the SBTi has established a new Legal Board of Trustees. It has today confirmed the first three appointments external to the key partners that have made up the SBTi.

Francesco Starace will chair the Board. He has worked in the energy industry since the 1980s and recently ended his tenure as chief executive officer and general manager of Italian electricity and gas company Enel, to take up a role at global investment organisation EQT. He is a member of the Global Energy Alliance for People and Planet’s Global Leadership Council, a member of the European Investment Bank’s climate and environment advisory council and a participant in the European Clean Hydrogen Alliance.

The SBTi has also confirmed former President of Colombia Ivan Duque and Novazymes’ chief executive officer Ester Baiget as members of the Board of Trustees.

Commenting on his appointment, Starace said: “I am very impressed by the momentum the SBTi has built since its inception. Today, the organization validates thousands of companies’ targets each year. The SBTi plays an important role in encouraging ambitious corporate climate action, which relies on credible target validation and robust standard-setting. I feel honoured to join as Chair during this phase of rapid growth.”