Amid the rising global environmental crises, businesses and industries worldwide have been grappling with their environmental impact. The Science Based Targets initiative (SBTi) has emerged as a crucial framework for guiding companies in setting and achieving greenhouse gas (GHG) emission reduction targets that are consistent with climate science. Launched in 2015 by the Carbon Disclosure Project (CDP), United Nations Global Compact (UNGC), World Resources Institute (WRI), and the World Wide Fund for Nature (WWF), the SBTi provides a comprehensive approach for businesses to align their operations with the Paris Agreement goals.
As of 2025, over 9,000 companies are performing SBTi aligned actions, with 5000+ companies aligning to the specification of 1.5°C in near-term and over 400 companies now confident to align their targets with the specifications of ‘well-below 2°C in near-future.
The Role of SBTi in Promoting Environmental Sustainability
The SBTi 2025 framework offers a structured approach for companies to set and meet GHG emission reduction targets based on scientific evidence and is based on the GHG protocol. This approach is pivotal in driving environmental sustainability for several reasons:
- Alignment with Global Climate Goals: The SBTi 2025 framework ensures that companies’ emission reduction targets are aligned with the Paris Agreement objectives. By adhering to science-based targets, companies contribute to a collective effort to mitigate the worst impacts of climate change.
- Long-term Strategic Planning: By encouraging them to set targets that span 5 to 15 years into the future, companies are prompted to think beyond short-term gains and consider long-term environmental and economic implications affecting their operations. This approach fosters resilience and sustainability in business practices, enabling companies to anticipate and adapt to future regulatory, market, and environmental changes.
- Encourages Innovation and Efficiency: Companies are compelled to explore new technologies, optimize resource use, and implement sustainable practices to meet sustainability targets. This drive for innovation can lead to the development of new products, services, and processes that reduce environmental impact and create new business opportunities.
- Enhancement of Corporate Reputation and Stakeholder Trust: The SBTi 2025 framework’s emphasis on transparency and accountability through regular reporting and third-party validation strengthens stakeholder confidence in a company’s commitment to sustainability. This, in turn, can lead to increased customer loyalty, investor interest, and competitive advantage in the marketplace.
- Contribution to a Low-Carbon Economy: By setting and achieving science-based targets, companies play a crucial role in the transition to a low-carbon economy. Their collective effort can drive significant reductions in global GHG scope1, 2, and 3 emissions, supporting the broader goal of decarbonizing the global economy. This transition is essential for mitigating climate change, protecting ecosystems, and ensuring the long-term viability of industries and economies.
Challenges and Limitations of the SBTi Framework
While the SBTi framework offers significant benefits for companies seeking to improve their environmental sustainability, it is not without its challenges and limitations. A critical viewpoint of several areas where companies may encounter difficulties:
- Complexity and Resource Intensity: Developing a comprehensive understanding of a company’s GHG scope 1,2, and 3 emissions, identifying reduction opportunities, and implementing changes can be complex and resource-intensive for small and medium-sized enterprises (SMEs), as it requires significant time, expertise, and financial resources. For companies with limited capacity, the demands of the SBTi framework may be challenging to meet.
- Sectoral and Geographical Disparities: The SBTi framework’s applicability varies across different sectors and regions. Industries like heavy manufacturing and energy, may struggle to set and achieve science-based targets due to the inherent carbon intensity of their operations. Similarly, companies operating in regions with limited access to renewable energy or supportive infrastructure may face additional challenges in meeting their targets. These disparities can create an uneven playing field, where some companies may struggle to achieve the same level of progress as others.
- Potential for Greenwashing: Despite the SBTi’s emphasis on transparency and accountability, there is a risk that companies may use the framework for greenwashing—portraying themselves as more environmentally responsible than they truly are. This could occur if companies set targets that are not ambitious enough, focus on less impactful areas of their operations, or fail to fully disclose their progress. While the SBTi’s validation process helps mitigate this risk, it cannot eliminate the possibility of greenwashing, particularly if companies are not genuinely committed to sustainability.
- Market and Regulatory Uncertainties: The dynamic nature of markets and regulations can pose challenges for companies seeking to meet their science-based targets. Changes in energy prices, shifts in consumer behavior, and evolving regulatory requirements can affect a company’s ability to achieve its targets. Additionally, the lack of a consistent global carbon pricing mechanism or regulatory framework can create uncertainty for companies operating across multiple jurisdictions. This uncertainty can complicate long-term planning and investment in sustainability initiatives.
- Dependence on Broader Systemic Changes: The success of the SBTi framework is partly dependent on broader systemic changes in the global economy. For companies to meet their science-based targets, they often rely on external factors such as the availability of renewable energy, advancements in low-carbon technologies, and supportive government policies. If these systemic changes do not occur at the required pace or scale, companies may struggle to achieve their targets despite their best efforts. This highlights the need for coordinated action at multiple levels—corporate, governmental, and societal—to achieve the desired environmental outcomes.
Maximizing the Impact of the SBTi Framework and how NeoImpact can Help
The SBTi framework advances corporate sustainability, though it comes with complexity, sectoral disparities, and the potential for greenwashing. To maximize the impact of the framework, companies must approach it with genuine commitment and a willingness to invest in the necessary resources and innovations. Policymakers and industry leaders must also work together to create supportive environments that enable all companies, regardless of size or sector, to set and achieve ambitious science-based targets. By addressing these challenges and fostering a collaborative approach to sustainability, the SBTi framework can play a pivotal role in driving the global transition to a more sustainable and resilient future.
Our technical team are well equipped to assist firms in navigating the complex reporting processes associated with the SBTi reporting framework:
- Long-term strategic planning and SBTi target-setting: NeoImpact assists clients in setting SBTi targets by developing a decarbonization roadmap, ensuring alignment with SBTi 2025 net-zero standard, and ensure core integration of climate goals into business strategy and operations.
- SBTi baseline assessment and strategy development: Our expert team helps clients identify emissions hotspots, conduct gap analysis against SBTi criteria, and performs GHG inventory and carbon footprint analysis across scope 1,2, and 3 emissions. We also conduct sector-specific analysis of scope 1,2, and 3 emissions and develop decarbonization strategy aligned with client and supplier expectations.
- NeoImpact SBTi monitoring, ESG reporting, and communication services: NeoImpact drives investor confidence through creating ESG reporting and SBTi reporting aligned with ESG/sustainability frameworks including CDP standards, TCFD standard, and ISSB standard.
