Step 3: Set near-term and long-term targets
Companies are urged to set science-based decarbonisation targets. Science-based targets (SBTs) refer to climate goals set based on the latest climate science to ensure that global warming is kept below 1.5°Celsius above pre-industrial levels.
These targets are grounded in the Intergovernmental Panel on Climate Change (IPCC) recommendations and aim to align corporate and organisational emissions reductions with the most up-to-date scientific understanding of climate change.
By adopting SBTs, companies contribute to global efforts to reduce Greenhouse Gas emissions and transition to a low-carbon economy. When setting SBTs, companies can follow the methodologies and guidance that the Science-Based Target Initiative (SBTi) provides. The box below describes the different options companies have when setting science-based targets.
When setting targets, companies balance ambition with feasibility. Ideally, targets evoke a sense of urgency for action within the company while being feasible within the company's long-term strategy. It might be beneficial to better understand your company's main decarbonisation levers and the linked decarbonisation actions before committing formally to a target. This can help evaluate the feasibility and timelines needed for implementation.
Types of targets under SBTi
Absolute Reduction, Economic Intensity, Physiscal Intensity
Absolute Reduction
Method used to calculate absolute emissions reduction targets that require organisations to reduce annual absolute emissions by an amount consistent with onderlying mitigation pathways. Also known as 'Absolute reduction approach (ARA)', and 'Cross-sector absolute reduction.
Economic Itensity
Emissions by specific financial unit, e.g. revenue.
Physical Itensity
Method used to calculate emissions intensity targets based on the principle of converging to a sector-wide physical emissions intensity in a future year of a mitigation pathway. Also referred to as 'physical intensity convergence'or 'Sectoral Decarbonization Approach (SDA)'.
Please note: The Corporate Net-Zero Standard is currently under review (effective to be expected from 2027). The insights are based on version 1.2 of the SBTi Corporate Net-Zero Standard.