As we move toward a low-carbon future, setting ambitious emissions reduction targets is more than a formality—it’s a commitment to leading the transition. The challenge is ensuring your targets are scientifically sound and effective. That’s where the Science-Based Targets initiative (SBTi) comes in, offering the guidance and validation you need to back your climate strategy.

Charged with aligning corporate goals to the latest climate research, the SBTi offers the validation and guidance companies need to stay on track. SBTi-approved climate targets are considered the gold standard, signaling that your goals are more than just hopeful ambitions—they’re backed by rigorous science and tracked to ensure real progress. Yet getting approval can be challenging; hundreds of companies have tried and ended up on the “SBTi commitment removed” list.

This guide will show you how to set a science-based target in accordance with the SBTi and how to avoid common pitfalls so your business can confidently lead the low-carbon transition and satisfy any related sustainability compliance requirements.

Why Set a Greenhouse Gas Emissions Target?

Setting a greenhouse gas (GHG) emissions reduction target demonstrates to your stakeholders that you are a responsible company contributing to the transition to a low-carbon economy in a rigorous and science-based manner. It also indicates to investors and employees that your company is considering the impact of climate risks and any opportunities that could improve brand trust and ensure long-term financial viability.

Emissions Targets: No Longer Optional for Mid-Market Companies

Mid-market firms have typically viewed emissions targets as a best practice to aim for. Now, these targets are rapidly becoming mandated as larger companies increasingly expect their suppliers to prove they’re reducing carbon emissions. The companies below are just a snapshot of the large multinationals with commitments to have a high percentage of their supplier spend go to suppliers with science-based targets:

• Hyatt: Have a commitment for 41% of suppliers (by emissions) covering purchased goods and services to set science-based targets by 2025.
• Ulta Beauty: 68% of Ulta’s suppliers (by emissions) covering purchased goods and services will have science-based targets by FY2027.
• Neiman Marcus Group: 75% of the retail giant’s suppliers (by spending) covering purchased goods and services will set science-based targets by 2028.
• Aldi: Aims to have suppliers responsible for 75% of its product-related emissions to establish science-based targets by 2024.
• AstraZeneca: Targeting 95% of key supplier spending with companies committed to SBTi-approved science-based targets by 2025.
• Microsoft: Microsoft has implemented ambitious requirements for its suppliers. They mandate annual reporting of Scope 1, 2, and 3 emissions and establish climate goals aligned with their own science-based targets (55% emissions reduction by 2030).
• Marriott: 22% of suppliers (by emissions) covering purchased goods and services, capital goods, and upstream transportation and distribution will have science-based targets by 2028.

What is the SBTi?

Founded in 2015, the Science-Based Targets initiative (SBTi) helps companies align with the Paris Agreement and tackle climate change head-on. It does this by:

• Defining Best Practices: Setting clear guidelines for companies aiming to achieve net zero by 2050.
• Providing Tools and Guidance: Offering standards and resources to help businesses set credible, science-based targets.
• Validating Targets: Assessing and approving emissions reduction targets to ensure they meet rigorous scientific criteria.

In 2021, SBTi released its Corporate Net Zero Standard, now the gold standard for companies seeking to reach net zero by 2050. It provides best practices, tools, and guidance.

What is a Science-Based Target?

A science-based emissions reduction target is when a company has a decarbonization strategy that aligns with limiting global warming to at least 2.0°C and ideally 1.5°C by reaching net zero emissions by 2050, as the Paris Agreement proposes.

A science-based target also includes a clear pathway and strategy for reducing the emissions necessary to achieve the 2.0°C goal across Scope 1, 2, and 3. Finally, a science-based target is one which is validated by the Science-Based Target Initiative (SBTi).

How Many Companies Have Set SBTi Targets?

As of early 2025, at least 10,602 companies have committed to an SBTi-aligned emissions reduction goal, and 7,129 of those were approved. However, 580 of those have had their commitment removed due to being unable to show that their target is science-based or after finding the process too rigorous and removing themselves.

You may have heard of SBTi removing more than 200 high-profile companies from their list in 2024. This raises the question: Are some companies setting commitments that are too ambitious? If so, this shows the importance of setting realistic yet ambitious targets to ensure long-term success and the credibility of meeting science-based goals.

The Benefits of Getting an SBTi-Approved Emissions Reduction Target

Though setting a science-based target can be challenging, it is the most effective way to demonstrate the credibility of your emissions reduction goal. Achieving SBTi approval also delivers additional business benefits, including:

• Improved Supplier-Customer Relations: Many companies with an SBTi commitment also request or require their suppliers to do the same. Having a science-based target and getting it SBTi-approved will help build rapport with your customers who require or recommend it.
• Bolsters Brand Reputation: Having an SBTi-approved emissions reduction target will help your investors, customers, and other stakeholders know that you are serious about playing your part in mitigating climate change.
• Cost Savings: Exploring decarbonization strategies usually leads to finding efficiencies, which lowers operational and energy costs.
• Reduced Risks: As climate risks accumulate, creating a science-based plan to measure and reduce emissions will help reduce your exposure to risks, such as the physical risks of climate change and future compliance risks. It will also help you minimize reputation and legal risks from greenwashing claims.
• Improved ESG Ratings: SBTi was integrated into the CDP questionnaire, which means having an SBTi-aligned goal can improve your CDP score. In addition to CDP, reporting to EcoVadis that you have an SBTi-approved target and providing supporting documentation can give you a better EcoVadis rating.  

How To Set an SBTi-Aligned Target

For most companies and financial institutions, the process for setting science-based targets and getting SBTi validation is a straightforward five-step process provided by SBTI:

• Step 1: Commit – Submit your commitment to an SBTi-aligned decarbonization goal through a letter or an online application. Once committed, you have 24 months to submit targets for validation.
• Step 2: Develop – Begin to develop a target based on the science-based criteria in SBTi documentation, like the Net Zero Standard and other guidance and tools.
• Step 3: Submit – Submit your near-term and net zero targets and pay your processing fee. You will then work with an SBTi expert who will decide whether to approve your submission and give in-depth feedback.
• Step 4: Communicate – Once your target has been approved, you will be added to the SBTi’s approved target list and be given guidance on how to announce your target approval.
• Step 5: Disclose – After receiving approval, companies must disclose their emissions annually and track progress toward goals. Reporting can be made through CDP or through annual ESG reports.

This process will be slightly different for small to medium-sized companies as they will go through an expedited validation process.

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How Small to Medium-Sized Companies Can Set SBTi-Aligned Goals

SBTi-aligned goals are not just for large multinationals. Smaller companies can and should also set SBTi-aligned goals and are being asked to do so by their biggest customers. SBTi has provided a streamlined version of the process to make it easier for companies under certain thresholds.

US-based companies can qualify for the SBTi SME route if they meet these criteria:

• Emit less than 10,000 tCO2e across Scope 1 and location-based Scope 2 emissions
• Are not part of the financial or oil and gas industries
• Not subsidiaries of a parent company whose combined operations fall under the standard validation

Additionally, at least three of the following must apply:

• Employ fewer than 250 people
• Have a turnover below $50 million
• Hold total assets under $25 million
• Operate outside the mandatory Forest, Land, and Agriculture (FLAG) industries

Regional definitions and thresholds can differ, but small and medium-sized enterprises (SMEs) have a simpler, more affordable path: they only need to set targets for Scope 1 and 2, skip the formal validation process, and choose from two predefined target options for automatic approval. However, SMEs must still calculate and report Scope 1, 2, and 3 emissions every year.

Common SBTi Challenges and How to Overcome Them

While setting an emissions target may seem straightforward, achieving SBTi validation means meeting rigorous, science-based criteria. One of the biggest challenges is addressing Scope 3 emissions, which typically accounts for more than 20x your Scope 1 and 2 emissions. Since Scope 3 covers your entire value chain, it requires:

• Accurate Data Collection: Only about 6% of companies with SBTi approved goals use detailed, supplier-specific data due to its complexity. Many opt to use industry-average factors as a practical workaround.
• Supplier Engagement: Convincing suppliers to adopt and report their own emissions and reduction plans can be difficult, as control over their climate policies is limited.
• Sector-Specific Challenges: Industries like cement, steel, and transportation face unique hurdles due to their reliance on fossil fuels. For these sectors, the SBTi offers tailored guidance to help set realistic targets.

By understanding these challenges, you can better prepare your strategy to meet SBTi requirements.

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How Good.Lab Can Help You Set an SBTi-Approved Goal

For mid-market companies ready to take decisive climate action, Good.Lab offers tailored solutions to achieve SBTi-approved targets. Our GHG Target Setting Tool streamlines your journey by:

• Establishing Your Baseline: Accurately map your current Scope 1, 2, and 3 emissions with our user-friendly calculator, to ensure you are accurate in your GHG target setting.
• Visualizing and Forecasting: Gain clear insights into your emissions data and forecast future reductions, so you know exactly what it takes to meet your targets.
• Tracking Progress: Easily monitor your improvements year-over-year, making annual reporting and sustainability disclosures a breeze.

If you need a more efficient path to SBTi approval, our software-driven consultations can help you set—and achieve—credible, science-based targets.