- The Science Based Targets initiative (SBTi) drives ambitious climate action in the private sector by enabling organisations to set science-based emissions reduction targets
- 4,204 companies validated by the SBTi by end of 2023
- The SBTi awarded charitable status
- Sector-specific standards for high-emitting sectors to be developed
- An independent Validation Council will be formed for target validations
The Science Based Targets initiative (SBTi) says that the number of companies and financial institutions setting greenhouse gas reduction targets and having them validated by the Science Based Targets initiative (SBTi) doubled in 2023 (up from 2,079 in 2022).
This demand for corporate decarbonisation standards and target validation services has prompted a major scale-up operation to quickly develop a broader range of trusted, credible, emissions reduction standards and increase capacity for validating companies’ targets, while aiming for the highest level of service excellence for companies and financial institutions.
Several months after the SBTi announced its de-merger from its partner organisations, it has been granted charitable status by the Charity Commission for England and Wales. Previously a collaborative initiative between CDP, We Mean Business Coalition, World Resources Institute (WRI), World Wide Fund for Nature (WWF) and the UN Global Compact, the SBTi now takes its place as an independent organisation alongside its partners to build out its critical role in the corporate climate ecosystem.
The SBTi has also incorporated a subsidiary which will, when fully operational, house its target validation services, with all profits donated to the charity. Standard-setting will remain in the charity, which announced a legal board of trustees in September, chaired by the former ENEL CEO Francesco Starace.
The registration of the SBTi’s charitable status by the UK’s Charity Commission means that IKEA Foundation’s $18m funding pledge is now coming to fruition, supporting the development of standards and building and strengthening of SBTi infrastructure. This matches the $18m from the SBTi’s other principal funder, the Bezos Earth Fund, which has been instrumental in enabling the SBTi’s significant upscaling since 2021.
Luiz Amaral, CEO of the SBTi, said, “We would like to extend our gratitude to IKEA Foundation, the Bezos Earth Fund and all our funders for their valuable contribution, supporting the SBTi in pursuit of its mission and the build out and scale up of our organisation. We promised to prepare the SBTi for the next phase of growth and are delivering on that, once again doubling the number of companies validated in a single year while establishing our independence and strengthening our governance.”
SBTi standard development priorities for 2024
In 2024, the SBTi will review the Corporate Net-Zero Standard for potential updates the following year. Building upon the near term target-setting guidance for financial institutions, the SBTi Financial Institutions Net-Zero Standard will be developed in tandem. The SBTi is also prioritising the development of sector-specific standards for six high impact sectors: oil and gas, electric utilities, automotives, chemicals, insurance and apparel.
In addition, the SBTi is to pilot a hybrid model for developing sector-specific standards, partnering with external organisations and pooling expertise. This model could lead to a step-change in how some SBTi standards are developed, paving the way for a major acceleration in the number of sector-specific standards developed in 2025 and beyond.
Call for Validation Council members
Following work started in 2023 to strengthen the robustness of the SBTi’s standards, including the appointment of an independent Technical Council, a similar process is also underway to strengthen the efficiency, accessibility, and credibility of SBTi validation services. A Validation Council will be formed to ensure independence in decision-making. A call for members for the Validation Council, along with Terms of Reference for the Council and requirements for Council Members, will be published on the SBTi website in the coming weeks.
Compliance capacity is increasing with the appointment of two compliance managers, and the forthcoming appointment of two quality managers. The pace of validation continues to accelerate, with the number of companies setting targets doubling in 2023, while average waiting times halved.