What is the Science Based Targets initiative (SBTi)?

The Science Based Targets initiative (SBTi) is a global partnership between the Carbon Disclosure Project (CDP), United Nations Global Compact (UNGC), World Resources Institute (WRI), and World Wide Fund for Nature (WWF) that enables corporations and financial institutions to set greenhouse gas emissions reduction targets aligned with climate science. Over 10,000 companies have validated targets through SBTi as of early 2026.

What does 'science-based' mean in the context of SBTi targets?

A science-based target aligns with the latest climate science necessary to meet the Paris Agreement goals: limiting global warming to 1.5°C above pre-industrial levels and reaching net-zero emissions by 2050 or sooner. Science-based targets are not arbitrary commitments but are grounded in climate scenarios and emissions budgets consistent with international climate agreements.

What are the four elements of the SBTi Corporate Net-Zero Framework?

The SBTi Corporate Net-Zero Framework comprises: (1) Near-term science-based targets (5–10 year reductions), (2) Long-term science-based targets (at least 90% reduction by 2050), (3) Neutralization of residual emissions (permanent carbon removal after reductions), and (4) Beyond value chain mitigation (voluntary investment in external climate projects). These four elements work together to define credible corporate net-zero strategy.

What is the 5-step SBTi target-setting process?

The five steps are: (1) Select a base year (2015 or later), (2) Calculate your company's emissions (95%+ Scope 1&2, 100% Scope 3), (3) Set target boundaries (95% Scope 1&2 / 67% Scope 3 near-term, 90% Scope 3 long-term), (4) Choose target years (5–10 years near-term, 2050 or sooner long-term), (5) Calculate targets using approved methodologies (Absolute Reduction or Sectoral Decarbonization Approach).

What is the difference between near-term and long-term SBTi targets?

Near-term targets are set for 5–10 years and drive immediate action on emissions reduction aligned with 1.5°C pathways. Long-term targets aim for 2050 or sooner and typically require at least 90% reduction from baseline, representing the deep decarbonization necessary for net-zero. Both are required elements of the SBTi framework.

What is Scope 1, Scope 2, and Scope 3 in SBTi?

Scope 1 are direct emissions from company-owned or controlled sources (fuel combustion, chemical reactions). Scope 2 are indirect emissions from purchased electricity, steam, heating, and cooling. Scope 3 are all other indirect emissions from the value chain (purchased goods and services, capital goods, transportation, waste, business travel, use of products). SBTi requires comprehensive coverage of all three scopes in target setting.

Can companies use carbon credits to achieve their SBTi reduction targets?

No. Carbon credits cannot be counted toward achieving SBTi reduction targets. Targets must be achieved through real, measurable emissions reductions. However, carbon credits can be used for two purposes: (1) neutralizing residual emissions at the net-zero date (post-2050), and (2) beyond-value-chain mitigation investments prior to net-zero. This maintains integrity in the reduction pathway.

What is neutralization of residual emissions in the SBTi framework?

Neutralization is the process of permanently removing or offsetting emissions that remain after a company has achieved its long-term reduction targets (typically 90%+ reduction). Residual emissions are neutralized through carbon removal technologies and permanent storage solutions. This typically occurs at or after the net-zero target year (2050 or sooner).

What happens if a company's circumstances change after setting SBTi targets?

SBTi targets must be reviewed and revalidated every five years or when significant structural changes occur (mergers, acquisitions, major divestment). Companies must also apply Forward-Looking Ambition (FLA) adjustments if using a base year earlier than their most recent reporting year, ensuring targets reward early action without penalizing companies that have already made progress.

What is Climate Decode's Canopy platform and how does it support SBTi?

Canopy is an AI-powered residual emission procurement platform that supports SBTi implementation through six modules: (1) Residual Calculation—quantify post-reduction emissions, (2) AI Curator—match residuals with vetted carbon projects, (3) RFQ Builder—streamline procurement, (4) Portfolio Optimisation—balance quality/cost/geography, (5) Procurement Management—track from PO to retirement, (6) Reporting & Compliance—generate CSRD/CDP/VCMI reports. It enables companies to manage the last 20% of emissions aligned with SBTi requirements.

Do all companies need to follow the same SBTi methodology?

Not entirely. SBTi provides sector-specific guidance for heavy-emitting industries like Power, Forest Land and Agriculture (FLAG), and Maritime Transport. These sectors may use specialized methodologies such as the Sectoral Decarbonization Approach (SDA) instead of the standard Absolute Reduction method, tailored to their specific decarbonization pathways and physics.

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SBTi 101: The Science Based Targets Initiative Explained

A comprehensive guide to setting science-based targets, understanding the net-zero framework, and implementing corporate climate strategy aligned with the Paris Agreement.

By Koorosh Behrang • March 2026 • 8 min read

10,000+

Companies with validated SBTi targets

1.5°C

Global warming limit for science-based targets

2050

Latest net-zero year for long-term targets

In This Article

What is SBTi? • Net-Zero Framework • 5-Step Process • Key Considerations • Canopy

SBTi 101: The Science Based Targets Initiative Explained — Climate Decode

Comprehensive overview of the Science Based Targets initiative (SBTi), explaining its purpose, the corporate net-zero framework, and the detailed 5-step process for target setting. The SBTi is a global partnership between CDP, United Nations Global Compact, World Resources Institute, and World Wide Fund for Nature that enables businesses to set GHG emissions reduction targets aligned with climate science necessary to meet the Paris Agreement goals of limiting warming to 1.5°C and reaching net-zero by 2050. Over 10,000 companies have validated targets through SBTi. The net-zero framework comprises four key elements: near-term science-based targets (5-10 year reductions), long-term science-based targets (90%+ reductions), neutralization of residual emissions through carbon removal, and beyond-value-chain mitigation investments. The 5-step process includes selecting a base year, calculating emissions with at least 95% Scope 1 & 2 and complete Scope 3 inventory, setting boundaries (95% Scope 1&2 / 67% Scope 3 for near-term, 90% for long-term), choosing target years, and calculating targets using approved methodologies. Key requirements include 1.5°C ambition for Scope 1 & 2, annual reporting, five-yearly revalidation, and sector-specific guidance for power, agriculture, and maritime industries. Climate Decode Canopy supports SBTi implementation through residual calculation, AI curation, RFQ management, portfolio optimization, procurement management, and audit-ready compliance reporting. By Koorosh Behrang, Climate Decode.

1	What is the Science Based Targets Initiative?

The Science Based Targets initiative (SBTi) is a global corporate climate action organization that enables businesses and financial institutions to set greenhouse gas (GHG) emissions reduction targets aligned with the latest climate science.

These targets are considered "science-based" if they align with what climate science says is necessary to meet the goals of the Paris Agreement — specifically, limiting global warming to 1.5°C above pre-industrial levels and achieving net-zero emissions by 2050 at the latest.

“Science-based targets ensure that corporate climate commitments are credible, measurable, and aligned with what climate science says is needed to address the climate crisis.”

The initiative is a partnership between four major organizations:

Carbon Disclosure Project (CDP)

United Nations Global Compact (UNGC)

World Resources Institute (WRI)

World Wide Fund for Nature (WWF)

The Bottom Line

As of early 2026, over 10,000 companies worldwide have validated targets through SBTi, demonstrating widespread corporate commitment to science-aligned climate action.

The SBTi provides a clear methodology, sector-specific guidance, and a third-party validation process that ensures targets are rigorous and credible.

2	The SBTi Corporate Net-Zero Framework

The SBTi Corporate Net-Zero Standard defines a clear, science-aligned framework for achieving net-zero emissions. This framework consists of four integrated pillars:

Near-Term Science-Based Targets 5-10 year emission reduction targets for Scope 1, 2, and 3 emissions, aligned with limiting warming to 1.5°C.	Long-Term Science-Based Targets Reduce absolute emissions by 90% or more by 2050 to align with net-zero pathways.
Carbon Removal & Neutralization Use carbon removal or sequestration to neutralize residual emissions that cannot be eliminated through reduction alone.	Beyond Value-Chain Mitigation Invest in emissions reduction projects outside your organization's value chain to contribute to broader climate goals.

Together, these four pillars create a comprehensive pathway for organizations to achieve true net-zero emissions while contributing to global climate mitigation efforts. The framework ensures that targets are ambitious, science-aligned, and credible.

“The net-zero framework transforms corporate climate action from aspirational goals into measurable, time-bound commitments backed by rigorous science.”

3	The 5-Step Target Setting Process

The SBTi provides organizations with a structured, five-step methodology to ensure targets are rigorous, scientifically grounded, and achievable:

Step 1

Select Base Year

→

Step 2

Calculate Emissions

→

Step 3

Set Boundaries

→

Step 4

Choose Target Years

→

Step 5

Calculate Targets

Here's what each step entails:

Step 1: Select a Base Year

Choose a historical year as your baseline for measuring emissions reductions. For near-term targets, this is typically within the last 5 years. For long-term targets, the same base year should align with near-term targets.

Step 2: Calculate Emissions Baseline

Conduct a comprehensive GHG inventory covering at least 95% of Scope 1 & 2 emissions and 100% of relevant Scope 3 categories. This provides the foundation for your targets and ensures scientific credibility.

Step 3: Set Scope Boundaries

For near-term targets: minimum 95% of Scope 1 & 2 emissions and 67% of relevant Scope 3 categories. For long-term targets: 90% of Scope 1 & 2 emissions and all relevant Scope 3 categories. These boundaries define the scope of your commitment.

Step 4: Choose Target Years

Select your target year(s) for achieving reductions. Near-term targets must be 5-10 years from the base year. Long-term targets should extend to 2050 or later for net-zero alignment. The timeline demonstrates your commitment level.

Step 5: Calculate Reduction Targets

Use SBTi-approved methodologies (e.g., Sectoral Decarbonization Approach, Absolute Contraction Approach) to calculate the specific percentage reduction required for your organization. This ensures alignment with global climate pathways.

Pro Tip: Use SBTi Resources

The SBTi provides detailed technical guidance documents, sector-specific methodologies, and an online target-setting tool to support you through each step. Leverage these resources to ensure compliance and accuracy.

4	Key Considerations & Requirements

To maintain the credibility and rigor of SBTi-validated targets, organizations must meet several critical requirements throughout their climate journey:

1.5°C Ambition for Scope 1 & 2

Scope 1 and 2 targets must align with limiting warming to 1.5°C. This is a non-negotiable requirement that ensures your organization contributes meaningfully to global climate goals.

Annual Emissions Reporting

Commit to transparent, annual reporting of your emissions progress against targets. This accountability mechanism ensures stakeholders can track your climate performance year-over-year.

Five-Yearly Target Revalidation

Every five years, you must revalidate your targets to ensure they remain aligned with the latest climate science and updated global mitigation pathways. This ensures continuous rigor and climate ambition.

The Bottom Line

Meeting SBTi requirements demonstrates genuine climate commitment. It's not just about setting targets—it's about maintaining transparency, staying aligned with climate science, and continuously raising your ambition.

Sector-Specific Guidance

SBTi provides tailored guidance for specific sectors including power generation, agriculture, forestry, land use, maritime shipping, and financial institutions. If your industry has sector-specific requirements, ensure your targets align with those guidelines for maximum credibility and impact.

5	Implementing SBTi: Canopy for Residual Emission Procurement

While aggressive emission reduction is the priority under SBTi targets, organizations also need reliable solutions to address residual emissions—the portion that cannot be eliminated through operational changes alone. Canopy is designed specifically for residual emission procurement, helping you source, verify, and manage high-quality carbon credits, offsets, and removals at scale.

Calculate

Curate

RFQ

Optimise

Report

1	Residual Emission Calculation Quantify What Reduction Can't Cover Calculate residual emissions at corporate, product, or customer level across Scope 1+2+3. Set neutralisation targets, benchmark against peers. SBTi V2 OER tier alignment built in.

2	AI-Powered Credit Curation Discover & Shortlist the Right Instruments Match your residual profile with curated offsets, removals, and carbon credits ranked by quality, geography, and SBTi eligibility. Filter by avoidance, NBS removals, or Tech CDR.

3	RFQ & Procurement Support Best Price. No Intermediaries. Send RFQs directly to project developers and suppliers. Compare quotes side-by-side. Manage full procurement cycle from RFQ through PO, invoicing, credit delivery, and retirement.

4	Portfolio Optimisation & Procurement Build the Optimal Portfolio for Your Target & Budget AI-generated portfolio strategies (High Quality, Removals-focused, Balanced, Cost Effective) with budget awareness. Supports Spot and Multi-Year contracts.

5	Reporting & Compliance Audit-Ready Reports. Verified Claims. Generate compliance reports for CSRD, AB1305, VCMI disclosures. Full inventory ledger of offsets with retirement status. Push data to CDP Portal.

Platform + Expertise

Canopy is built to work alongside your advisory team to develop and execute a holistic SBTi strategy. From residual emissions quantification to credit procurement to compliance reporting, Canopy provides the transparency and operational efficiency needed to scale your carbon removal programme with confidence.

SBTi Readiness: As you implement SBTi targets, Canopy ensures your residual emission procurement strategy is aligned with SBTi's rigorous standards for additionality, permanence, and quality. This translates to credible climate action that withstands stakeholder scrutiny.

Ready to implement your SBTi targets with Canopy?

Talk to our team to learn how Canopy can accelerate your pathway to science-based climate targets, streamline carbon removal procurement, and future-proof your compliance documentation.

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SBTi 101: The Science Based Targets Initiative Explained

What is the Science Based Targets Initiative?

The SBTi Corporate Net-Zero Framework

Near-Term Science-Based Targets

Long-Term Science-Based Targets

Carbon Removal & Neutralization

Beyond Value-Chain Mitigation

The 5-Step Target Setting Process

Step 1: Select a Base Year

Step 2: Calculate Emissions Baseline

Step 3: Set Scope Boundaries

Step 4: Choose Target Years

Step 5: Calculate Reduction Targets

Pro Tip: Use SBTi Resources

Key Considerations & Requirements

1.5°C Ambition for Scope 1 & 2

Annual Emissions Reporting

Five-Yearly Target Revalidation

Sector-Specific Guidance

Implementing SBTi: Canopy for Residual Emission Procurement

Residual Emission Calculation

AI-Powered Credit Curation

RFQ & Procurement Support

Portfolio Optimisation & Procurement

Reporting & Compliance

Platform + Expertise

Buying credits under the 2026 rules?