1.5°C-aligned decarbonisation pathway validation for corporate targets

Overview

The Science Based Targets initiative (SBTi) provides companies with a clearly defined pathway to reduce greenhouse gas emissions in line with the Paris Agreement's 1.5°C goal. SBTi validates that a company's emissions reduction targets are 'science-based' — meaning they align with the GHG reductions required to limit global warming to 1.5°C. Over 7,000 companies have committed to SBTi, and more than 4,000 have had targets validated.

Key Requirements

What 'science-based' means

A science-based target is one that aligns with the level of decarbonisation required to meet Paris Agreement temperature goals. SBTi uses the Sectoral Decarbonisation Approach (SDA) and the Absolute Contraction Approach (ACA) to determine the required emission reduction rate for each sector and apply it to individual companies. The key distinction from a non-validated target is that science-based targets specify the rate of reduction (not just a direction) and are independently checked for methodology and ambition.

SBTi Corporate Net-Zero Standard

SBTi's Net-Zero Standard (2021) defines corporate net-zero as: a 90–95% absolute reduction in Scope 1, 2, and 3 emissions by 2050 at the latest, with the residual 5–10% neutralised via permanent carbon removal (not offsets). This definition is significantly more demanding than most corporate 'net-zero' claims, which often involve large volumes of low-quality offset credits covering emissions that have not been reduced.

• Scope 1 and 2: 90%+ absolute reduction by 2050 at latest
• Scope 3: 90%+ absolute reduction across full value chain
• Residual emissions: Only permanent removal (not offset credits) counts
• Near-term milestone: ≥50% reduction in Scope 1 and 2 by 2030 is typical requirement

SBTi flag and the offset controversy

In 2024, SBTi published a policy clarification allowing voluntary use of environmental attribute certificates for Scope 3 emission reductions — a controversial move that many climate scientists interpreted as weakening the rigour of the standard. The policy was later partially revised. Investors should check whether a company's SBTi-validated target relies primarily on offsets for Scope 3 reduction or on genuine supply chain decarbonisation.

Common Misconceptions