Carbon management trends

SBTi science-based decarbonization

What

What is SBTi?

The Science Based Targets initiative (SBTi) is a corporate climate action framework co-founded by the United Nations Global Compact (UNGC), Carbon Disclosure Project (CDP), World Resources Institute (WRI), and the World Wide Fund for Nature (WWF). It drives companies to set science-based emission reduction targets aligned with the global effort to limit warming to 1.5°C.

Core Principles of the SBTi Net-Zero Standard:

Target Boundaries Must Consider All Scopes of GHG Emissions

Near-term targets must cover at least 95% of Scope 1 and Scope 2 emissions.
If Scope 3 emissions account for 40% or more of a company’s total inventory, Scope 3 must be included in near-term targets.
Long-term targets must cover at least 95% of Scope 1 and Scope 2, and 90% of Scope 3 emissions.

Setting Near-term and Long-term Reduction Targets

Near-term Targets: Set a 5-to-10-year reduction timeline from the base year, strictly aligned with the 1.5°C pathway.
Long-term Targets: Commit to deep decarbonization, reducing Scope 1, Scope 2, and Scope 3 emissions by at least 90% no later than 2050.

Neutralizing Residual Emissions for Net-Zero

Implement carbon dioxide removal (CDR) and permanent storage solutions to neutralize residual, unavoidable emissions.
Invest in mitigation activities outside the value chain to support CO2 removal from the atmosphere.

Why

Why Should Enterprises Adopt SBTi?

Globally Recognized Climate Standards

SBTi addresses climate impacts from a global perspective, providing a rigorous, science-based reduction framework recognized by international experts. Furthermore, companies signing the SBTi commitment letter are officially designated as "Publicly Committed" across major platforms, including SBTi, CDP, the UN Global Compact, and the We Mean Business Coalition.

Elevating Corporate Reputation

By setting phased reduction targets and committing to net-zero by 2050, companies demonstrate their commitment to sustainability. Transparently disclosing these targets and progress strengthens corporate reputation and builds customer trust.

Enhancing Corporate Competitiveness

Enterprises can actively respond to the risks of climate change and take clear, practical actions during the transition to a net-zero economy, gradually enhancing corporate competitiveness.

Carbon Fee Offsets

With Taiwan's carbon fee set to be levied in May 2026, science-based carbon reduction is one of the government-recognized primary "Self-determined reduction method," offering a high chance for preferential fee levels.

Who

Which Enterprises are Suitable for SBTi?

Any enterprise with the ambition to commit to a 1.5°C science-based net-zero pathway is suitable to join SBTi!

※ Note: The Oil & Gas and Automotive sectors are temporarily excluded as official guidance remains under development. The Financial Institutions sector follows its own independent framework.

Enterprises can apply through different routes based on their scale. SBTi currently offers the Standard Route and SME Route as outlined below:

Standard Route Version: For parent companies or group-level applications.
SME Route: Must meet the following criteria:
- Total Scope 1 and Scope 2 emissions are below 10,000 tCO2e
- Non-financial institutions and non-Oil & Gas industry
- Not applicable for SDA (Sectoral Decarbonization Approach) specific targets
- Not a subsidiary of a parent company eligible for the Standard Route, and must meet at least three of the following:
  1. ① Fewer than 250 employees
  2. ② Turnover less than €50 million
  3. ③ Total assets less than €25 million
  4. ④ Does not belong to the mandatory FLAG (Forest, Land, and Agriculture) sectors

How

How to Apply for SBTi?

Following the latest SBTi validation criteria, enterprises can establish science-based targets through a five-step process:

Five steps to apply and set science-based targets

Commit: Submit a commitment letter to formally declare your intent to set science-based targets.
Develop: Formulate specific reduction targets aligned with SBTi guidance within 2 years of signing the commitment.
Submit: Submit targets for SBTi validation. Once approved, targets must be reviewed or recalculated every 5 years.
Communicate: Following approval, SBTi will publish your targets. Your company must publicly announce them within 6 months to avoid required re-validation.
Disclose: Annually disclose your GHG emissions and track progress toward your targets.

Solution

How can SGS assist with your SBTi journey?

Through SBTi Practical Training, SGS provides comprehensive support for enterprises, ranging from guidance interpretation, application support, review and adjustment of GHG emission data, target setting, and advice on reduction strategies. We accompany you through every stage to ensure a seamless SBTi validation. Please contact us to learn more about our services.

Q&A

Frequently Asked Questions

01. What is the difference between the SME Version and the Standard Version?

Scheme	Standard Route	SME Route
Employees	-	< 250
Turnover	-	< €50 Million
Total Assets	-	< €25 Million
Organizational Boundary	The parent company determines if subsidiaries are included in the boundary	Must not be a subsidiary of a company using the Standard Version
Scope 1 & 2 Coverage	95%	95%
Scope 3 Coverage	Near-term: 67%^[1] Long-term: 90%	Not required for Near-term Long-term: 90%
SDA Industry Guidance	Applicable for setting sector decarbonization targets	Not Applicable
FLAG (Forest, Land, and Agriculture)	Applicable	Not Applicable
Excluded Industries	Financial Institutions and Oil & Gas Industry

^[1] If Scope 3 accounts for 40% or more of total emissions, near-term targets must cover at least 67% of Scope 3 emissions; if less than 40%, inclusion in near-term targets is not required.

02. If an enterprise has already implemented ISO 14064-1:2018, can it serve as the GHG inventory for SBTi?

SBTi primarily follows the GHG Protocol. Because its emission classifications, boundary settings, and requirements differ slightly from ISO 14064-1:2018, the inventory cannot be directly adopted. However, since both frameworks share similar logic in emission identification and quantification, enterprises that have completed ISO 14064-1:2018 can leverage their existing data as a foundational reference for their SBTi GHG inventory.

Source: Ambitious corporate climate action - Science Based Targets

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What is SBTi?
Why Should Enterprises Adopt SBTi?
Which Enterprises are Suitable for SBTi?
How to Apply for SBTi?
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