Number of companies with SBTi targets reaches 5,500

The number of companies and financial institutions with SBTi-validated climate targets has now hit 5,500, as the de facto standard-setter continues to formalise its processes and governance.

The Science-Based Targets Initiative (SBTi) says demand for its services has risen consistently, and almost 1,300 firms got their targets validated in the first half of 2024. Last year, the number of companies with SBTi targets already doubled from 2022, reaching 4,204.

A third (31%) of those with validated climate targets are now based in Asia, signalling growing global reach for the organisation.

SBTi continues its formalisation

The organisation has become a de-facto corporate climate standard setter, leading to increased scrutiny around its governance and methodology. As a result, the SBTi has initiated a formalisation process, registering as a charity in the UK, forming an independent technical council and appointing a validation council to oversee its new validation services entity. It is also looking for non-executive directors to form a three-member board.

“When I joined the SBTi, I had two key goals: to enable exponential growth in the adoption of science-based targets and to move the organisation from an informal initiative into a formal voluntary standard-setter in its own right,” said SBTi CEO Luiz Amaral.

“Now we move another step forward with the appointment of the independent Validation Council and the call for a Board of Directors for the validation services entity. These are critical steps which will continue the separation between standard-setting and target validation services and help equip the validation services entity to meet the continued momentum from companies and financial institutions worldwide to set climate targets.”

New corporate net zero standard draft expected in July

The SBTi is in the process of revising its corporate net zero standard for the first time, and recently divided opinions with the suggestion that it might allow for expanded carbon offset use, specifically for Scope 3 abatement purposes.

Amaral later clarified that the decision had not been made yet, and that any change in policy would be approved following its Standard Operating Procedure, including research, drafting, public consultation, technical council review and approval, consideration and adoption by the SBTi board.

“The SBTi will not shy away from the hard questions, but we will not be overrun by them either,” he added. “SBTi governance is designed to have different perspectives represented and such diversity is welcomed. All voices will be heard in our consultation process, including and importantly those from the Global South which have been largely absent or ignored in this debate. We are focused on the work, not on hearsay, and will be judged by the quality and impact of our standards.”

While many sustainability experts – including H&M head of sustainability Leyla Ertur – expressed concern about the potential lowering of corporate climate ambition this change could bring, a group of West African countries reportedly sent a letter to the SBTi last week urging it to support the development of carbon markets.