SBTi Target Setting 2.0: What Enterprises Need to Know Now
Setting Science-Based Targets (SBTi) is now a key expectation for large enterprises. Investors, regulators, and stakeholders increasingly scrutinize climate commitments, demanding transparency, credibility, and measurable progress. Yet many organizations struggle to translate these commitments into actionable strategies.
In this article, we’ll cover:
Why setting SBTi targets is challenging for large enterprises
Key pitfalls to avoid when developing science-based targets
Practical steps to turn climate commitments into actionable strategies
How SBTi Target Setting 2.0 shifts focus from compliance to transformation
Why SBTi Target-Setting Remains Challenging
While the concept of setting science-based targets may seem straightforward, the operational reality is far more complex. Enterprises often face challenges such as:
Inconsistent emissions data: Data is scattered across business units, geographies, and operational categories. Without a unified, complete dataset, organizations risk inaccurate calculations, reporting gaps, and most importantly can’t set credible sustainability targets in the first place.
Complex target options: Organizations must carefully balance near-term and long-term goals while deciding between absolute, intensity-based, or sector-specific targets. This requires considering business structure, growth projections, and industry norms, as well as ensuring alignment with relevant standards and any SBTi-specific processes for their sector.
Organizational alignment: Sustainability initiatives frequently operate in silos, making cross-functional collaboration challenging. Gaining buy-in from finance, operations, and leadership is crucial to ensure feasibility and accountability. Equally important is establishing awareness of your organization’s decarbonization levers before committing to any reduction targets, ensuring that goals are both ambitious and achievable.
Navigating technical frameworks: The SBTi methodology is rigorous, with detailed documentation requirements that can overwhelm teams new to the process.
Balancing ambition with operational feasibility: Targets that are too aggressive may be unrealistic, while overly conservative targets can undermine credibility with stakeholders. It’s often best to benchmark against high-performing peers to gauge an appropriate level of ambition and ensure goals are both credible and achievable.
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The Shift to SBTi Target Setting 2.0
SBTi Target Setting 2.0 is about moving beyond compliance. Enterprises are increasingly expected to integrate climate goals directly into business strategy and operations, rather than treating them as a separate reporting initiative. Key principles include:
Holistic strategy: Aligning sustainability goals with corporate objectives, investment decisions, and operational planning.
Data-driven decision-making: Using scenario analysis, forecasts, and trend projections to anticipate challenges and prioritize interventions.
Cross-functional collaboration: Engaging stakeholders across departments early ensures realistic targets and smoother implementation.
Transparent processes: Establishing robust documentation, reporting, and validation practices to maintain credibility and readiness for external review.
Practical Insights for Enterprises
Organizations aiming to succeed in SBTi target-setting should focus on:
Mapping emissions comprehensively: Begin with a clear inventory of Scope 1, 2, and relevant Scope 3 emissions, taking a coherent approach to material emissions sources across your entire value chain. This helps identify gaps and opportunities for meaningful improvement.
Scenario planning: Evaluate multiple decarbonization pathways to understand the trade-offs and implications of different strategies.
Internal governance: Create a cross-functional governance structure to drive accountability and streamline decision-making.
Operationalizing targets: Translate strategic goals into concrete projects, KPIs, and timelines for measurable results.
Continuous improvement: Monitor progress, refine assumptions, and adjust targets as business conditions evolve.
Beyond Compliance: Turning Targets into Impact
The ultimate value of SBTi target-setting lies in its ability to drive real business transformation. By embracing a structured, data-driven approach, enterprises can reduce emissions, improve operational efficiency, and strengthen stakeholder trust, while future-proofing their business in a low-carbon economy.
SBTi Target Setting 2.0 is not just about meeting external expectations. It’s about creating a strategically aligned, resilient enterprise that can thrive under increasingly stringent climate regulations and investor scrutiny.
