Any company with Scope 1+2 emissions above 40 ktCO2e or operating in specified high-impact sectors can set and submit a corporate target to SBTi. SMEs (fewer than 500 employees, under 40 ktCO2e) have a streamlined route. Financial institutions, FLAG (Forest, Land, Agriculture) companies and oil & gas companies have sector-specific criteria.
What are near-term vs long-term targets?
Near-term targets cover 5-10 years and require at least a 1.5 C-aligned annual reduction rate for Scope 1+2 (currently 4.2% per year linear under ACA). Long-term targets commit to reaching at least 90% reduction across Scope 1+2+3 by a specified net-zero year, typically before 2050. Both are needed to commit to the SBTi Corporate Net-Zero Standard.
What is the Absolute Contraction Approach (ACA)?
ACA requires companies to reduce absolute emissions at a fixed annual percentage rate consistent with 1.5 C pathways (4.2% per year for Scope 1+2). It is the default method for all corporate targets and is applied regardless of company growth. The Sectoral Decarbonization Approach (SDA) is an alternative for high-emitting sectors with sector-specific pathways.
When does the SBTi Corporate Net-Zero Standard v2 take effect?
SBTi is finalizing v2 of the Corporate Net-Zero Standard, with significant changes to Scope 3 requirements, beyond value chain mitigation (BVCM), and validation criteria. Adoption is expected through 2025-2026. Companies submitting targets during the transition should check the current SBTi website for the applicable version.
Do I have to set a Scope 3 target?
Yes, if Scope 3 is more than 40% of total emissions. Near-term Scope 3 targets must cover at least 67% of Scope 3 emissions and be aligned with well-below 2 C. Long-term Scope 3 targets must cover at least 90% of Scope 3 and be 1.5 C-aligned. Companies below the 40% threshold can exempt Scope 3 from the near-term target.
How long does SBTi validation take?
After submission, SBTi target validation typically takes 30-90 days depending on the complexity and the queue. Companies can submit via the standard corporate route, the SME route (streamlined), or sector-specific routes (FLAG, FI). Formist produces the Target Submission Form and supporting pathway calculations ready for SBTi intake.