SBTi - Science Based Targets initiative

EcoVision
Nov 10
3 min read

What Is SBTi?

SBTi (Science Based Targets initiative) is a global framework that helps companies set greenhouse‑gas (GHG) reduction targets that are aligned with climate science — specifically, with the goals of the Paris Agreement to limit global warming to 1.5 °C above pre‑industrial levels.

SBTi was co‑founded by CDP, UN Global Compact, WRI, and WW

Launched in 2015, SBTi is a collaboration among:

CDP (formerly Carbon Disclosure Project)
United Nations Global Compact (UN GC)
World Resources Institute (WRI)
World Wide Fund for Nature (WWF)

🎯 Core Purpose of SBTi

It ensures that corporates and financial institutions:

Quantify emission‑reduction targets scientifically (rather than arbitrarily);
Align business models with net‑zero transition pathways;
Gain stakeholder trust that their climate commitments are real, measurable, and Paris‑aligned.

Put simply:

SBTi translates climate goals into measurable, science‑backed emission targets that can be independently validated.

💡 How It Works — The SBTi Process

Step	Description
1. Commit	The company publicly commits to setting a science‑based target (SBT).
2. Develop	Use SBTi calculation tools (linked to IPCC carbon budgets) to design reduction targets covering Scope 1,  2,  and sometimes 3 emissions.
3. Submit for validation	SBTi reviews methodology and confirms alignment (1.5 °C or “well below  2 °C” scenario).
4. Announce & disclose	Company publicly announces approved target; appears on the SBTi registry.
5. Implement & report	Monitor progress through annual ESG/ climate disclosures.

Typical commitment timeframe: 5 – 15 years reduction horizon, often aiming for net‑zero by 2050.

🌱 Relationship with ESG Frameworks

SBTi relates directly to the “E” (Environmental) dimension of ESG — particularly climate strategy, emissions, and risk management.

Here’s how it connects to prominent ESG reporting and disclosure frameworks:

ESG / Sustainability Framework	SBTi Impact / Integration
TCFD (Task Force on Climate‑related  Financial Disclosures)	SBTi  targets provide quantitative evidence for TCFD’s “Metrics  and  Targets”  pillar.
ISSB / IFRS S2 (Climate Standard)	SBTi  data supports disclosure of Scope  1‑3 emissions  and  transition plans  consistent  with  IFRS  S2  mandates.
GRI 305 (Emissions)	SBTi  validated  targets  serve as  credible emissions  reduction  benchmarks  under  GRI  reporting.
UN Sustainable Development Goals (SDG 13:  Climate Action)	SBTi  targets  directly  advance  SDG 13  and  related  SDGs  7  (energy)  &  12  (consumption).
CDP Questionnaire	Companies with  SBTi‑approved targets  score higher  on  climate  leadership and  transparency.

In essence:

SBTi gives ESG reports climate depth and credibility — transforming climate talk into quantifiable, science‑verified commitments.

⚙️ Strategic Impact on ESG Practices

Impact Area	Effect of Adopting SBTi
Governance	Boards must oversee measurable climate objectives → stronger “G” integration.
Strategy	Aligns long‑term business models with low‑carbon transition → part of TCFD/ ISSB disclosures.
Risk Management	Reduces transition risk (e.g., carbon pricing, regulation, supply chain).
Metrics & Targets	Provides robust, auditable key metrics → strengthens ESG credibility for investors.
Investor Perception	SBTi validation signals seriousness →  better ESG ratings and financing opportunities (green bonds, sustainability‑linked loans).

📊 Hong Kong & Regional Context

Many major Hong  Kong‑listed enterprises (e.g.  CLP,  Swire  Pacific,  Hong  Kong  &  China  Gas,  Hang  Seng  Bank) have adopted SBTi‑validated targets, driven by:

HKEX ESG Reporting Code (Appendix 27) requiring climate‑risk disclosure and emissions data;
SFC & TCFD alignment policy pushing for physical/ transition risk reporting;
Global capital markets  and  investor  pressure for Paris‑aligned climate strategies.

🔍 Quick Summary

	SBTi	ESG Framework  Relationship
Nature	Science‑based carbon‑target‑setting standard	Supports and strengthens ESG environmental disclosures
Focus	GHG  reduction targets (Scopes 1–3);  net‑zero pathways	Environmental pillar: climate  &  resource  management
Validation body	Science  Based  Targets  initiative	Used  within  ESG  frameworks (TCFD,  GRI,  ISSB,  HKEX  ESG  Code)
Output	Verified emissions  reduction  targets  aligned  with  1.5 °C	Provides quantitative  metrics  and  improves  ESG  ratings
Impact	Enhances credibility, transparency, and investor  confidence	Central tool in climate and  sustainability  strategy

SBTi is the scientific backbone behind credible climate target‑setting,and it bridges ESG disclosure with real emissions performance — turning environmental promises into measurable, Paris‑aligned action.