What is SBTi, and what kind of companies can join it?

Under the CSRD, companies must carefully evaluate their emission reduction targets and process for setting them. According to the Corporate Sustainability Reporting Directive, these targets must align with the Paris Agreement, and many companies have set their targets based on the Science-Based Targets initiative (SBTi). What should you know about SBTi, and how can your company set such a target?

The term SBTi may already be familiar, as nearly 10,000 companies worldwide have joined the initiative, with over 7,000 having set approved climate targets. As of January 2025, 168 Finnish companies are participating, with 118 having established either near-term targets or both near-term and net-zero targets.

What is SBTi?

The Science Based Targets initiative (SBTi) essentially means that a company reduces its emissions in line with the Paris Agreement's 1.5°C target. SBTi is an international organization formed by the UN Global Compact, the environmental organization WWF, the climate reporting organization CDP, and the World Resources Institute (WRI).

How is SBTi set?

Setting an SBTi target and the steps involved depend on the size of the company. For SMEs, the process is slightly more straightforward and easier than for large companies. The basis for setting the target is a company-level emissions calculation based on the GHG Protocol standards. SMEs should have calculated at least scope 1 and 2 emissions, while larger companies should have calculated scope 1-3 emissions, covering the company's entire value chain.

The SBTi guidelines therefore vary slightly depending on the size of the company and the sector. If a company operates in an energy-intensive sector, it has its own sector-specific guidelines and targets. Companies operating in these sectors, irrespective of their size, must follow the sector-specific guidelines. The energy-intensive sectors are:

• aluminium
• apparel and footwear
• air transport
• buildings
• chemicals
• cement
• financial institutions
• forest, land and agriculture
• ICT
• land transport
• maritime
• oil and gas
• power
• steel

For large companies, the SBTi process consists of five steps. First, a company commits to the SBTi, registers on the initiative's website, and submits a questionnaire. Once submitted, the company's name appears on the SBTi website with a "committed" flag. In the second step, the company sets a base year for the target against which future emission reductions will be compared. The base year can be up to five years in the past, meaning a very distant year cannot be chosen. Once the targets are set, the company submits them to SBTi, along with a reliable emissions calculation. The SBTi then starts a validation process, during which the company may need to address further questions regarding its emissions calculation, targets, and activities. After validation, the company receives an approval message. At the same time, a timetable is provided for publishing the company's name and targets on the SBTi website. The company also receives instructions on how to communicate about SBTi. During the monitoring phase, the company must establish a plan for emissions calculation, reporting, and reduction measures in the coming years to achieve its targets.

For SMEs, the process has been simplified. In practice, companies set and submit their targets directly through the SBTi form after registration, skipping the initial engagement phase. SBTi then validates the targets, and the company and its targets are added to the SBTi register. The company can then communicate its targets and begin tracking process.

SBTi – Near-term target and net-zero target

As stated earlier, a reliable and high-quality emissions calculation is the foundation for SBTi targets. The company must conduct a calculation based on GHG Protocol standards for the year it wants to set as the baseline for its SBT, known as the base year.

A company can set a near-term target and, if desired, a net-zero target. The near-term target can be set for 5–10 years from the base year, committing the company to reducing its emissions within this period in line with the Paris Agreement. In addition to the near-term target, the company can also set a net-zero target either at the same time or in the following years. With this target, the company commits to reducing its emissions by 90% compared to the base year. The target year for achieving net-zero falls between 2040 and 2050, depending on the company's sector.

Why choose SBTi?

Setting an SBTi target and implementing emission reduction measures require effort from companies, which may seem unnecessary or challenging. If a company fails to meet its targets or cannot respond to SBTi’s questions and requirements, the term Commitment removed may appear next to its name on the SBTi website, potentially harming its reputation. Why, then, do companies still choose to join the SBTi?

SBTi is globally recognized and has gained prominence in recent years as a key part of companies' climate efforts. The targets set through the initiative are ambitious, and staying on track with them requires companies to make real emission reductions.

Under the CSRD, companies must set their own emission reduction targets and report them in their sustainability reports. The CSRD does not specifically require commitment to the SBTi, but the sustainability reporting directive mandates that companies set targets in line with the Paris Agreement. If a company commits to the SBTi, and receives validation for its emission reduction targets, no additional justification is required for sustainability reporting.

The tools and up-to-date emission factors on the OpenCO2.net platform enable greenhouse gas emissions calculations for companies in line with the GHG Protocol standards and the ESRS E1 standard. Comprehensive emissions calculation also serves as the basis for setting an SBTi target. Our experts are here to assist you with both emissions calculation and setting your SBTi target.