The Science Based Targets Initiative (SBTi) has reported a significant increase in the number of companies integrating climate science into their sustainability strategies. They reported a remarkable 102 percent surge in 2023 alone compared to previous years since the initiative.Â
Findings from the SBTi Monitoring Report
The SBTi Monitoring Report 2023 highlighted an 83% rise in the number of financial institutions and a 57 percent increase in corporations setting science-based targets in 2023 compared to 2022. The report also noted substantial growth in small and medium-sized enterprises (SMEs) adopting these targets.
In 2023, 449 corporations established targets in line with the SBTi’s Net-Zero Standard, which mandates a minimum 90 percent reduction in emissions by 2050. This represents a remarkable 245 percent increase compared to 2022 figures.
Luiz Amaral, SBTi’s Chief Executive, said that the rapid growth in science-based target setting with major exporting countries is encouraging. He added that this underscores the growing need for tools and standards to facilitate corporate decarbonisation on a large scale.Â
The expanding reach of SBTi in global markets represents a deeper understanding amongst companies of what is needed to achieve the Paris Agreement goals. Luiz remarked that now more than ever, it is critical to keep up the momentum towards these goals and urged companies globally to continue setting targets and disclosing their emissions annually.Â
Best target-setting sectors and countriesÂ
The report found that in 2023, the manufacturing and services sectors accounted for 58 percent of the companies setting targets. Moreover, the pharma and healthcare sector, which experienced the least growth in 2022, saw the highest increase last year, with a 222% rise in companies with validated targets.
In terms of countries, Japan has now surpassed the UK as the nation with the highest number of validated companies, with 768 validated firms, compared to 693 in the UK. The United States remains in third place with 465 validated companies. India recorded the highest growth rate, with 78 companies setting science-based targets in 2023, marking a 520% increase, bringing the total to 93.
Refining the Corporate Net-Zero Standard
The SBTi is currently refining its Corporate Net-Zero Standard following its initial release in 2021. In April, the SBTi announced plans to provide updated guidance on how companies can use ‘environmental attribute certificates’, including carbon credits, to account for their climate goals, particularly those related to Scope 3 (indirect) emissions.Â
This update is expected to ease restrictions on the use of offsets. Currently, companies aiming to align with the SBTi’s Net-Zero Standard can only use offsets for up to 10% of their absolute emissions across all scopes. Many companies have expressed concerns about the feasibility of achieving such substantial emissions reductions.
This report follows closely on the heels of the British Standards Institution (BSI) launching an 18-month process to develop a new, independently verifiable standard to ensure the credibility of net-zero targets set by businesses and other organisations.
Conclusion
The rapid acceleration in the number of companies setting science-based targets reflects a profound shift in the global business landscape. This surge is not just a testament to the growing awareness of the urgent need to combat climate change but also a clear signal that businesses are increasingly seeing the value in aligning their operations with the principles of environmental responsibility.Â
The path forward is challenging, but it is also filled with potential. Every target set, every emission reduced, brings us one step closer to a world where economic prosperity and environmental stewardship coexist harmoniously. Now is the time for businesses to be bold, to set the targets that will shape the future, and to lead by example. The stakes have never been higher, but the rewards are immeasurable.
