Measure twice, cut once: How to set effective science-based targets

March 15, 2024

Committing to science-based targets (SBTs) is a significant step for companies to align their emissions reduction efforts with climate science. Following this commitment, companies are required to develop and submit their targets to the Science-Based Targets initiative (SBTi) for validation within 24 months.

Too often, companies don’t adequately prepare for their target submission, resulting in excessive spending, significant validation delays, and, worse, an unrealistic target. Avoiding such pitfalls is easy—it requires a systematic and robust approach upfront; as the saying goes: “Measure twice, cut once.”

This article introduces the essential steps companies need to take to set realistic targets, streamline validation, and build a solid foundation for achieving the targets.

Download our guide in PDF for a comprehensive summary of SBTi requirements and resources.

Set Science-Based Targets guide

What is a science-based target?

A science-based target (SBT) is a greenhouse gas emissions reduction target set by the private sector in line with the level of decarbonization required to limit global warming from exceeding 1.5°C above pre-industrial levels—a central goal of the Paris Agreement.

The Science Based Targets initiative (SBTi), established in 2015, supports and validates these targets, ensuring they are grounded in climate science. SBTi provides companies and financial institutions with technical guidance, independent assessment, and target validation services.

The SBTi has a five-step process for science-based target setting as shown below. This article focuses on the key actions for target development and submission after your commitment.

SBTi 5-step process for setting science based targets

How to develop and submit effective science-based targets

1. Understand your timeline

To plan your target setting, it is essential to understand the submission deadline and the SBTi official validation timeframe.

Under the SBTi commitment compliance policy, companies with near-term or net-zero commitments must submit a science-based target for validation within 24 months from the date the commitment letter is signed, with the deadline falling on the last day of the same month two years later. For example, a commitment signed on May 20, 2023, would have a deadline of May 31, 2025.

The SBTi validation timeline primarily depends on the accuracy and completeness of the emissions reduction targets and supporting documentation. SBTi aims to complete the validation of targets within 30 business days for near-term targets and 60 business days for net-zero targets after the contract is fully executed, provided the company addresses any queries from the validation team within 2 business days. If the information provided is deemed insufficient by the SBTi after at least two query attempts, the SBTi may consider the submission to be non-compliant.

Note: It is the companies’ responsibility to justify that their target aligns with SBTi’s rigorous science-based criteria and provide all necessary information to demonstrate compliance. In practice, the validation process may take up to 2 years for companies submitting inaccurate or incomplete information.

2. Review your GHG inventory against SBTi requirements

Before setting your target, you will need to evaluate your existing GHG inventory following SBTi’s guiding questions below and identify which SBTi criteria and guidance you are subject to.

1) Have you completed a full and recent GHG inventory/screening of Scope 1, 2 and 3 emissions?

A company-wide Scope 1 and 2 carbon emissions inventory must be completed. Companies must complete a Scope 3 screening for all relevant categories considering the minimum boundary each category. Refer to relevant guidance and standards under the GHG Protocol.

2) Have you included all relevant Scope 3 activities?

All relevant Scope 3 sources must be calculated before submitting targets to the SBTi. Refer to GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard Table 6.1 (page 61) for criteria to identify relevant Scope 3 activities.

3) Does your inventory include any of the following?

All emissions below should be reported separately in the annual GHG inventory.

  • Offsets
  • Avoided emissions
  • Direct emissions from bioenergy
  • Optional Scope 3 emissions (e.g., indirect use-phase emissions in ‘Use of Sold Products’)

4) Does your company have significant Forestry, Land and Agriculture (FLAG) emissions?

Emissions from FLAG follow a separate emissions mitigation pathway that includes both reductions and removals. FLAG emissions must be disaggregated within the GHG inventory to set separate FLAG targets. Refer to SBTi FLAG Sector Guidance and GHG Protocol Land Sector and Removals Guidance.

5) Do you wish to set near-term SBTs only?

All near-term targets must be aligned to the most recent criteria, where Scope 1+2 targets are 1.5°C-aligned, Scope 3 targets are well below 2°C-aligned and the target year must be 5-10 years from submission. Refer to SBTi Corporate Near-Term Criteria.

6) Do you wish to set targets aligned with the Net-Zero Standard?

Companies must set both near-term and long-term science-based emissions reduction targets aligned to 1.5°C for a target year no later than 2050. Refer to SBTi Corporate Net-Zero Standard and SBTi Net Zero Standard Criteria.

7) Are you in one of the sectors with specific requirements?

Companies in these sectors should follow specific methodologies and guidance in addition to the core methodologies and resources:

  • Apparel and footwear
  • Cement
  • Financial institutions
  • Forest, Land and Agriculture (FLAG)
  • Information & Communication Technology (ICT)
  • Maritime
  • Power
  • Steel

Note: The SBTi requires companies to provide 100% of their greenhouse gas emissions for validation, including what they eventually exclude from the target coverage.

Spend-based vs. Process-based LCAs for target setting and tracking

The SBTi encourages companies to develop full value chain inventories to set the target baseline, which requires a process-based LCA approach. While spend-based LCAs are acceptable for target submissions, they are primarily considered as a screening tool for prioritizing data collection. Moreover, certain sectors (e.g., agriculture and food, apparel) need to establish whether they are subject to additional requirements like FLAG when submitting targets for validation, which also requires process-based LCAs.

Process-based LCAs also enable accurate tracking and reporting of year-on-year progress against targets. In contrast, spend-based LCAs, while suitable for high-level reporting, are inadequate for precise target tracking due to various limitations, including susceptibility to price distortions.

Bottom line: Companies cannot effectively track SBT progress without process-based LCAs; therefore, if not initially employed, they will eventually need to transition to this approach.

Learn more about process-based LCA and how to apply it at a corporate scale.

3. Develop and document targets

Based on the targets you have committed to and the GHG inventory review, you will need to develop specific targets following the SBTi criteria, including the general near-term and long-term targets for Scope 1, 2 and 3, and separate FLAG near-term and long-term targets.

While all companies are encouraged to set Scope 3 targets, a near-term Scope 3 target is mandatory for companies whose Scope 3 emissions exceed 40% of their total emissions.

Companies in the designated FLAG sectors (see list below), or with FLAG-related emissions accounting for more than 20% of their total emissions, are required to set separate Science-Based Targets for FLAG.

SBTi science based targets dedicated FLAG sectors and sectors potentially affected

Note: Even if your total Scope 3 or FLAG emissions fall below the threshold for mandatory targets, you must still develop and document your respective inventory to qualify for the exemption. As pointed out above, this requires the use of process-based LCA.

What are the criteria for science-based targets?

The tables below summarize the target year, coverage, methods, and level of ambition for the general and FLAG SBTs.

General science-based targets

Target typeTarget yearTarget coverageMethod & minimum ambition
Near-term Science-based Targets5-10 years from the date of submissionScope 1 & 2: 95% of total Scope 1 & 2 emissionsAbsolute reduction: minimum of 4.2% linear annual reduction (LAR)
Sector-specific intensity convergence: vary
Renewable electricity (RE) (Scope 2): 80% RE procurement by 2025 and 100% by 2030
Scope 3: 67% of total Scope 3 emissions (If Scope 3 >40% of total emissions)Absolute reduction: 2.5% LAR
Sector-specific intensity convergence: vary
Physical and economic intensity reduction: 7% year-on-year (both options)
Supplier or customer engagement: e.g., 80% of suppliers by emissions by 2025
Long-term and Net-Zero Science-based Targets2050 or soonerScope 1 & 2: 95% of total emissionsAbsolute reduction: 90%
Sector-specific intensity convergence: vary
Renewable electricity (RE) (Scope 2): 100% RE
Scope 3: 90% of total emissionsAbsolute reduction: 90%
Sector-specific intensity convergence: vary
Physical and economic intensity reduction: 97% (both options)

FLAG science-based targets

Target typeTarget yearTarget coverageMethod & minimum ambition
Near-term FLAG Targets5-10 years from the date of submissionScope 1: 95% of total FLAG-related Scope 1 emissions  
Scope 3: 67% of total FLAG-related Scope 3 emissions
Sector pathway: minimum of 3.03% linear annual reduction (LAR) for Scope 1 and 3 separately*  
Commodity pathway: annual intensity reduction % by commodity (beef, chicken, dairy, leather, maize, palm oil, pork, rice, soy, wheat, and timber and wood fiber)  
No deforestation across primary deforestation-linked commodities with a target date of FY2025.
Long-term and Net-zero FLAG Targets2050 or soonerScope 1: 95% of total FLAG-related Scope 1 emissions  
Scope 3: 67% of total FLAG-related Scope 3 emissions
Sector pathway: Reduce Scope 1 and 3 FLAG GHG emissions by 72%*
*Target includes FLAG emissions and removals.

How to account for land-based emissions for FLAG and non-FLAG targets?

For FLAG targets, companies are required to account separately for:

  • Land use change (LUC) CO2 emissions.
  • Land management emissions, including biogenic CO2, N2O and CH4 related to on-farm activities.
  • Carbon removal & storage.

The removals are not considered “offsets” because they enhance carbon sinks while also reducing emissions. They can contribute up to 37% of the target mitigation through 2030, and up to 20% by 2050. Companies that choose NOT to set a separate FLAG target are still required to account for land-based emissions separately in their non-FLAG target. FLAG mitigation (removals) cannot be used to meet non-FLAG targets.

4. Plan your strategic roadmap

As you develop your SBTs, it is highly recommended that you initiate an internal discussion about your roadmap for achieving these targets. Companies are expected to track and report their progress against SBTs every year through the CDP or their sustainability reports. The SBTi publishes an annual report based on this self-disclosed data to monitor progress across organizations.

Setting unattainable targets can undermine your company’s credibility, damage stakeholder trust, and potentially cause a backlash, impeding progress toward your sustainability goals. Therefore, it is crucial to discuss your targets and actionable strategies before submission.

The discussion should involve key stakeholders across your organization to ensure alignment and feasibility of the targets set. Potential considerations include:

  • How each target will be met
  • Timelines and key milestones
  • Metrics for measuring progress
  • Resources, technologies, and processes required
  • Gaps and opportunities
  • Budget allocation

5. Submit target for validation

Based on the targets that you are setting, there are several documents and tools that you will need to submit:

Companies should cross-check with the SBTi Criteria Assessment Indicators when completing the submission form to ensure the proposed targets meet all relevant criteria. This document offers verifiable control points for the validation team to evaluate submitted information.

You submit all required materials and initiate the validation process via SBTi’s Target Validation Service Booking System.

Common pitfalls of flawed target-setting

Generic, often spend-based, target-setting methodologies that lack granularity and transparency can impede target validation and progress tracking, leading to inefficient use of resources and unattained targets.

  • Prolonged validation process: The SBTi requires a complete GHG inventory with separate calculations for all Scope 3 categories and FLAG emissions. Without accurate targets and comprehensive documentation, the 30/60-day validation process can stretch up to 2 years to rectify deficiencies in the GHG inventory and documentation.
  • Resource-intensive re-baselining: The SBTi demands recalculating the target baseline for changes over 5%. Methods relying on high-level assumptions and spend data are susceptible to frequent updates as their initial estimates often significantly deviate from primary data.
  • Failure in achieving targets: Analysis based on spend data or limited products is unable to identify emissions hotspots and interventions effectively across the value chain. This results in misguided strategies hindering progress towards meeting set targets.

How can Aligned Incentives help

Aligned Incentives offers an AI-powered enterprise sustainability planning solution that helps companies efficiently set, track, and achieve science-based targets.

  • Develop robust GHG inventory effortlessly: With a GenAI-enabled core LCA database covering hundreds of thousands of agricultural/industrial processes, we make it easy to create granular, process-based GHG inventories for Scope 1, 2, and 3. Our analytics enable clients to quickly answer specific SBTi questions, such as the percentage of FLAG emissions across your entire product portfolio.
  • Set validated targets efficiently: We help you navigate the SBTi guidance and requirements to develop realistic targets and complete documentation. This ensures expedited validation, whether you’re setting new targets, updating existing SBTs, or adding net-zero emissions targets.
  • Achieve target cost-effectively: With our solution, you can accurately pinpoint and mitigate emission hotspots for specific product components, procurement items, suppliers, and production practices. Our dynamic financial tools enable clients to prioritize their scarce resources on the interventions with the highest return. Our custom-built dashboards also facilitate streamlined tracking and reporting of year-on-year progress with CDP.

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