Today, due to a range of pressures, businesses are increasingly recognising the importance of aligning their sustainability efforts with robust, science-based methodologies. Among these methodologies, the Science-Based Targets Initiative (SBTi) has emerged as a gold standard for corporate climate action.
Berger-Schmitz et al. (2023) [1] found that these pressures can be broadly divided into two categories: competitive pressures and institutional pressures. Of the companies they interviewed as part of their research:
Competitive pressures (e.g. anticipated market trends, profitability) were identified by over 75% of respondents as a crucial factor in net zero alignment.
Coercive (regulatory) pressures were identified by approximately two-thirds of respondents- arising from the influence of national net zero pledges, carbon taxes and international treaties (notably the Paris Agreement). Another related set of institutional pressures mentioned by two-thirds of respondents came from stakeholders.
As of June 2025, over 100 companies across the UK & Ireland have made commitments that large portions of their supply base (65-70% on average) will need to set targets between now and 2030 [2]. The majority of these are in the areas of professional services, construction and retail.
According to the SBTi [2], almost 11,000 companies have either committed to developing or have validated science-based targets. Adoption is diverse, spanning sectors and geographies:
By geography. SBTi is most popular amongst companies in Europe (50%), perhaps unsurprising given the highly regulated nature of the region. Asia (32%) and North America (13%) are catching up, particularly in sectors exposed to global supply chain requirements.
By sector. In these top three regions, SBTi is becoming prevalent amongst companies in professional services, electrical equipment & machinery, software, and construction/engineering.
By size. It is more popular amongst large corporates in Europe (63%) and North America (76%); however, an increasing numbers of SMEs are joining through initiatives like the SBTi SME pathway, particularly in Asia (53%).
This widespread adoption reflects a recognition that SBTi targets are becoming a baseline expectation for credible climate action.
Achieving meaningful, science-aligned emissions reductions requires more than target-setting. It requires a comprehensive strategy and operational alignment. Here’s how to embed SBTi targets into your broader ESG approach.
Step 1: Aligning ESG strategy and policies
Begin by determining whether climate-related issues are material to your business. Frameworks such as the double materiality assessment and climate risk assessments can be valuable tools to assist with this evaluation. If deemed material, integrate climate objectives into your overall ESG strategy. This includes defining governance structures, stakeholder engagement plans, and clear policies that reflect your commitment to emissions reduction.
Step 2: Setting target ambition with a defined transition plan
Use SBTi criteria to set robust targets that reflect your company’s emissions profile and growth trajectory. However, setting targets is only part of the equation. Without a clearly defined climate transition plan – detailing how an organisation will decarbonise across operations and value chains – companies are very likely to fall short. Guidance is available to help companies with developing transition plans, such as the Transition Plan Taskforce (TPT) Disclosure Framework.
Jiang et al (2025) [3] carried out a detailed analysis of ~1,000 companies with 2020 emissions targets. Their research found that 40% of these firms either failed to achieve their targets or had ‘disappearing’ targets, i.e. the target was silently removed near the target year or the target was updated to a future target year.
What factors determine whether a company will meet their targets? Research by Bolay et al. (2024) [4] on CDP 2020 disclosures suggests that the following are important:
1. A meaningful percentage of target is already achieved in year the target was set
2. Adopting absolute rather than intensity targets
3. Adopting multiple targets (different scopes, short-term and long-term, etc.)
4. Setting longer timeframes between the base year and target year
5. Identifying opportunities leading to substantive financial impact
6. Linking board remuneration to climate-related issues
Step 3: Developing and implementing action plans
Creating actionable plans for reaching targets is critical. Your roadmap should be backed by tangible operational initiatives such as switching to renewable energy, enhancing energy efficiency, engaging suppliers on Scope 3 reductions, or innovating sustainable products and services.
Step 4: Reporting progress through voluntary frameworks
If you are a large company operating in Europe, you may be in scope for mandatory sustainability reporting under the Corporate Sustainability Reporting Directive (CSRD). Alternatively, use frameworks like the Taskforce on Climate-Related Financial Disclosures (TCFD) recommendations, CDP, or the Global Reporting Initiative (GRI) to regularly disclose your climate performance. Transparent reporting fosters accountability and helps maintain investor and stakeholder trust.
Final thoughts
Science-based targets are becoming a defining feature of credible corporate sustainability strategies. But targets alone are not enough. Companies must back their ambition with detailed transition plans, robust governance, and clear reporting mechanisms.
By embedding SBTi targets into their ESG strategies, companies will address growing external pressures and position themselves for long-term resilience, relevance, and leadership in a low-carbon economy.
This blog was authored by Colum Kenny, Environmental SME, in June 2025.
References
[1] Berger-Schmitz, Z., George, D., Hindal, C., Perkins, R., & Travaille, M. (2023). What explains firms' net zero adoption, strategy and response? Business Strategy and the Environment, 1–19.
[2] SBTI Targets Dashboard, accessed 23 June 2025.
[3] Jiang, X., Kim, S. & Lu, S. Limited accountability and awareness of corporate emissions target outcomes. Nature Climate Change. 15, 279–286 (2025).
[4] Bolay, A.F., Bjørn, B., Patouillard, L., Weber, O., Margni, M. (2024). What drives companies’ progress on their emission reduction targets? Journal of Cleaner Production, Volume 468. https://doi.org/10.1016/j.jclepro.2024.143124.