Target Validation

Protocol for Near-term

Targets
TWG-PRO-002 / Version 3.1
March 2023

0
Document history

Version Change/update description Date finalized Effective Dates

From April 2019 to
1.0 The first version of the Target Validation Protocol April 2019
July 2020

Updated to align with SBTi criteria V4.1 and to

provide further information on frequently requested July 2020 to March
2.0 April 2020
topics, including target classification, resubmission 2021
and sector-specific guidance.

Minor updates to provide further clarification and

context to existing rules, and criterion, including the
following:

Section 3: updated to reflect how Financial

Institutions are treated during initial screening
stage.

Section 6: refined the target classification rules to

provide further clarity on how multiple approved
targets can be aggregated to produce a April 2021 to July 14,
2.1 temperature rating. April 2021
2022

Section 8: the criteria table has been updated to

reflect modifications to criteria wording, with minor
changes made to text for clarification purposes.

Section 9: updated to provide additional

information from the 1) electric utility sector update
from June 2020, 2) release of the financial
institution guidance in October 2020 and 3) current
practices related to companies in the oil and gas
sector
Updated to align with SBTi criteria V5.0. Some
sections that were previously included within the
Target Validation Protocol have been moved to the
Corporate Manual. These sections are as follows as
previously called under 2.1: July 15, 2022 to
3.0 December 6, 2021
March 14, 2023
Section 2 The SBTi and its target validation
process

Section 3 Target validation process

Target Validation Protocol for Near-term Targets TWG-PRO-002 | Version 3.1 | March 2023 | 1
 Section 4 Conflict of interest policy

Section 7 Target recalculation protocol

Minor updates to provide further clarification and

context to existing criteria, recommendations and
use of terminology (criterion 4, 10 and 19 and
recommendation 5 and 8).

Clarifications on exclusions, significance thresholds

and emissions coverage for scope 1, 2 and 3
targets (criterion 5 and 6).

Clarification that companies setting renewable

electricity sourcing targets that will be achieved
through market-based mechanisms must report and
track using market-based scope 2 emissions
(criterion 8).

Clarification that the target year criterion is only

relevant for absolute and intensity-based emission
reduction near-term targets (criterion 13).
3.1 March 29, 2023 From March 29, 2023
Revision of allowable years for assessing progress
to date for submissions in 2023 (criterion 14).

Clarification in language that scope 3 physical

intensity targets (criterion 18) only needs to meet
the 7% compounded emissions intensity reduction
(and can lead to absolute emissions increase).

Alignment of criterion 22 and 23 to the revised

version of SBTi’s policy on fossil fuel companies.

Further guidance for mandatory target

recalculations (criterion 26).

Revision of previous recommendation to criterion

for triggered recalculations (criterion 27).

Inclusion of most up to date information on sector

developments and sector-specific criteria.

Target Validation Protocol for Near-term Targets TWG-PRO-002 | Version 3.1 | March 2023 | 2
Table of Contents
Document history 1
1. Introduction 4
1.1 How to use the Target Validation Protocol for Near-term Targets 4
2. Assessment of SBTi Criteria for Near-term Targets 5
3. Assessing target ambition 37
3.1 Minimum ambition thresholds 39
3.1.1 Cross-sector absolute reduction 39
3.1.2 Sector-specific absolute reduction 39
3.1.3 Sector-specific intensity convergence 40
3.1.4 Scope 3 economic intensity reduction 40
3.1.5 Scope 3 physical intensity reduction 41
3.1.6 Renewable electricity targets 41
3.1.7 Engagement targets 42
3.2 Forward-looking ambition for scope 1 and 2 targets 42
3.2.1. Cross-sector and sector-specific absolute targets 42
3.2.2 Sector-specific intensity convergence 43
4. SBTi requirements and best practice in GHG accounting 45
5. Sector-specific requirements 52
6. Target classification definition 57
6.1 Target classification rules 59
7. Target wording requirements 60

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1. Introduction
The Science Based Targets initiative (SBTi) provides companies with a unique opportunity to have their
emission reduction targets independently validated by its team of technical experts through the target
validation service. To support this service, the Target Validation Protocol for Near-term Targets describes
the steps and procedures that are followed during the target validation process of near-term targets. This
protocol aims to increase transparency and ensure the credibility and consistency of the target validation
service and is updated annually to reflect any changes in the criteria.

Section 2 sets out the criteria table which describes how each of the SBTi Criteria for Near-term Targets
is interpreted and assessed by the validation team. Section 3 details how the target ambition is assessed
wherein the minimum ambition of near-term targets for each of the seven target-setting methods is
described, as well as an explanation on forward-looking ambition. Section 4 outlines nuances in
greenhouse gas (GHG) accounting that SBTi requires and recommends as best practice for certain
sectors and/or topics. Sector-specific guidance and methods that are currently available for many sectors
is included in Section 5. Thereafter, information on target classification and target wording follows in
Sections 6 and 7.

1.1 How to use the Target Validation Protocol for Near-term Targets
The Target Validation Protocol for Near-term Targets should be used in conjunction with other key SBTi
target-setting resources, most notably the SBTi Criteria for Near-term Targets (Version 5.1). The latter
defines the minimum qualitative and quantitative criteria for near-term targets to be recognized by the
SBTi. This protocol describes in more detail how the SBTi implements the criteria, sector-specific
guidance and greenhouse gas accounting practices, and should therefore be used when developing
targets.

The ambition thresholds that are used for absolute and sector-based approaches are summarized in the
protocol, to make it easier for companies to understand the minimum quantitative values used to assess
their targets. The derivation of these values is explained in the Foundations of Science-based Target
Setting paper, which also describes the different science-based target setting methods and scenarios
that the SBTi currently endorses.

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2. Assessment of SBTi Criteria for Near-term Targets
The SBTi Criteria for Near-term Targets outline the minimum qualitative and quantitative criteria for near-
term targets to be recognized by the SBTi. The validation team reviews the Target Submission Form and
associated documents to ensure that all criteria are met for any target submission to be approved.
Table 1 explains the criteria, which are requirements that companies must follow, and recommendations,
which companies should follow, to align with the SBTi Criteria for Near-term Targets. This table provides
more detailed information to companies on the procedure followed by the reviewer to assess each
criterion, and a clear explanation on when the criterion is met.

The validation team adheres to the criteria assessment table consistently for all companies' target
validations and all decisions are justified using this guide. 1

Table 1 uses precise language to indicate requirements, recommendations, and allowable options that
companies may choose to follow.
● The terms “shall” or “must” are used throughout this document to indicate what is
required for targets to be in conformance with the SBTi Criteria for Near-term Targets.
● The term “should” is used to indicate a recommendation, but not a requirement.
● The term “may” is used to indicate an option that is permissible or allowable.

The terms “required” or “must” are used in Table 1 to refer to requirements. “Can” and “is encouraged”
may be used to provide recommendations on implementing a requirement or “cannot” may be used to
indicate when an action is not possible. The letter “C” preceding a number indicates a criterion and the
letter “R” preceding a number indicates a recommendation.

1 If a novel case appears in a target validation that is not explicitly covered in this guide, the Target Validation Team will consult
with the Technical Department, and if necessary, bring the issue to the Executive Leadership Team for final decision-making.
In such cases, there might be significant delay for the target validation team to deliver the final target decisions, and it cannot be
guaranteed that targets that do not adhere to the protocol will be approved after the additional consultations with SBTi. If
necessary, relevant sections of the Target Validation Protocol will be updated to reflect the additional information/decisions
made.

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Table 1. Criteria Assessment Table

Criteria Validation requirements and recommendations Criterion assessment

I. GHG Emissions Inventory and Target Boundary

I.I Target boundary

C1 – Organizational boundary ● All subsidiaries must be reported and Criterion met if:
included within the parent company GHG ● The company reports and accounts for all
Companies should submit targets only at the parent- inventory in accordance with the chosen relevant subsidiaries in the GHG inventory
or group level, not the subsidiary level. Parent inventory consolidation approach. and target boundary.
companies must include the emissions of all ● Subsidiaries excluded from the GHG
subsidiaries in their target submission, in inventory and/or target boundary must be Criterion not met if:
accordance with the boundary criteria outlined clearly justified by the company. ● The company does not report relevant
below. In cases where both parent companies and subsidiaries and fails to include them in the
subsidiaries submit targets, the parent company’s GHG inventory and target boundary. OR
target must also include the emissions of the
● The company does not provide sufficient
subsidiary if it falls within the parent company’s
justification for the exclusion of specific
emissions boundary given the chosen inventory
subsidiaries.
consolidation approach.
I.II GHG coverage
C2 – Greenhouse gases ● All relevant GHGs required as per the Kyoto Criterion met if:
Protocol (CO2, CH4, N2O, HFC, PFC, SF6, ● No GHG exclusions are reported. OR
The targets must cover all relevant GHGs as required NF3) must be included. ● Exclusion of one or more GHG(s) is
by the GHG Protocol Corporate Standard. ● GHG exclusions must be clearly justified, reported, representing no more than 5% of
and not exceed 5% of total S1 and 2 the inventory and target boundary and a
emissions in the GHG inventory and target reasonable justification is provided.
boundary.

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● The GHG inventory is assessed to ensure Criterion not met if:
any relevant non-CO2 GHG was not ● Exclusion of one or more GHG(s) is
unreasonably omitted. reported, representing more than 5% of the
inventory and the target boundary. OR
● Exclusion of one or more GHG(s) is
reported, and no reasonable justification is
provided.
I.III Scope coverage

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C3 – Scope 1 and scope 2 ● At least one target covering scope 1 (S1) Criterion met if:
and scope 2 (S2) must be submitted. This ● Targets cover both S1 and S2 separately or
The targets must cover company-wide scope 1 and may be a combined scope 1 and 2 target or as a combined target. OR
scope 2 emissions, as defined by the GHG Protocol separate targets, if each scope’s emissions ● S1 or S2 make up less than 5% of combined
Corporate Standard. are above the minimum threshold for S1+S2 emissions and this scope is not
exclusion (5% of overall scope 1 and 2 covered by a target (e.g., if S1 makes up 3%
emissions). of overall S1+S2 emissions, only a S2 target
● Either percentage-based emission- is required if it covers 95% or more of
reduction targets or renewable electricity combined S1+S2 emissions).
procurement targets are acceptable for S2
emissions. Criterion not met if:
● Where a company’s scope 1 or 2 emissions ● No S1 or S2 target is set, and that scope
are deemed immaterial (i.e., under 5% of makes up more than 5% of overall S1+S2
total combined scope 1 and 2 emissions), emissions.
companies may set their SBT solely on the
scope (either scope 1 or scope 2) that
covers more than 95% of the total scope 1
and 2 emissions. The company must
continue to report on both scopes and
adjust their targets as needed, according to
the GHG Protocol’s principle of
completeness, and as per C26 and C27.
● The SBTi strongly encourages companies
that the choice of organizational boundary,
as defined by the GHG Protocol Corporate
Standard, is in close alignment with the
organizational boundary used in the
company’s financial accounting and
reporting procedures.

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C4 – Scope 3 ● For companies not involved in the sale or For companies not involved in the sale or distribution of
distribution of natural gas and/or other fossil natural gas and/or other fossil fuels:
If a company’s relevant scope 3 emissions are 40% fuel, at least one S3 target must be set if the Criterion met if:
or more of total scope 1, 2, and 3 emissions, they S3 emissions are responsible for more than ● S3 emissions represent 40% or more of total
must be included in near-term science-based targets. 40% of the total S1+S2+S3 emissions. S1+2+3 emissions. AND
All companies involved in the sale or distribution of ● For companies involved in the sale, ● At least one S3 target has been set.
natural gas and/or other fossil fuels shall set scope 3 transmission, or distribution of fossil fuels, a
targets for the use of sold products, irrespective of the scope 3 target on use of sold products must Criterion not met if:
share of these emissions compared to the total scope be set regardless of how these emissions ● S3 emissions represent 40% or more of total
1, 2, and 3 emissions of the company. contribute to the overall inventory. Please S1+2+3 emissions. AND
see criterion 22 for further details. ● No target(s) on S3 have been set.

For companies involved in the sale, transmission, or

distribution of fossil fuels, companies must follow
criterion 22.
I.IV Emissions coverage
C5 – Scope 1, 2, and 3 allowable exclusions: Scope 1 and 2: Criterion met if:
● The GHG inventory for scope 1 and 2 must ● No GHG emissions are excluded from the S1
Companies may exclude up to 5% of scope 1 and account for at least 95% of corporate-wide and S2 inventory or target boundary. OR
scope 2 emissions combined in the boundary of the emissions. All exclusions (e.g., activities, ● GHG exclusions of S1 and S2 combined in
inventory and target. Companies may exclude a facilities) must be clearly justified with the inventory and target boundary represent
maximum of 5% of emissions from their total scope 3 estimates of associated emissions value(s). less than 5% of total S1 and S2 emissions.
inventory. ● Specific regions/business activities can be AND
excluded if they represent less than 5% of ● If exclusions include specific regions or
total S1 and 2 emissions. If specific regions business, the company confirms it will follow
or business sections are excluded from S1 the C26 and C27 recalculation criteria and will
or S2, the company must assess if these not include these specifications in the official
emissions are relevant for S3 accounting target language.
and account for them per the requirements
of the GHG Protocol Scope 3 Standard.

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 ● Total exclusions for the scope 1 and 2 GHG ● No GHG emissions are excluded from the S3
inventory and the scope 1 and 2 target inventory or target boundary. OR
boundary cannot exceed 5%. For example, ● GHG exclusions from all scope 3 categories
if a company excludes 2% of from its scope combined represent less than 5% of total
1 and 2 GHG inventory from excluding a scope 3 emissions. AND
specific facility and a further 3% from its ● All exclusions have been clearly justified with
scope 1 and 2 target boundary, total estimates of associated emissions value(s).
exclusions are 4.94% which is acceptable AND
(100-(0.98*0.97)*100).
● If exclusions include specific regions or parts
● If specific regions or business sections are of a business the company confirms it will
excluded, provided total exclusions remain follow the C26 and C27 recalculation criteria
below 5%, the recalculation of targets is and will not include these specifications in the
required if those regions/business sections official target language.
increase significantly as per C27
recalculation criterion. However, companies Criterion not met if:
cannot include specific regions and
● Exclusions of one or more activities are listed
businesses in the official target language.
for which no reasonable justification is
provided. OR
Scope 3:
● The GHG exclusions of S1 and S2 combined
● The scope 3 GHG inventory must account in the inventory and target boundary
for at least 95% of corporate-wide scope 3
represent more than 5% of total S1 and S2
emissions.
emissions. OR
● All exclusions (e.g., activities, facilities) must ● Exclusions of one or more activities in the
be clearly justified with estimates of
scope 3 inventory are listed for which no
associated emissions value(s).
reasonable justification or estimate is
● Total exclusions from the scope 3 GHG provided. OR
inventory cannot exceed 5%. For example, if
● The GHG exclusions from the S3 inventory
a company excludes 4% of emissions from
represent more than 5% of total scope 3
scope 3 category 1, and this category
emissions. OR
represents 75% of total scope 3 emissions,
then it could not exclude more than an

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 additional 2% of scope 3 emissions on ● Emissions considered negligible are not
aggregate. reported and not quantified.
● If emissions deemed “negligible” are
excluded, these emissions must be
quantified and reported within the GHG
inventory and noted as being excluded in the
description. An estimated or rounded
exclusion is not sufficient, e.g., 0.2% is
acceptable whereas <1% is not acceptable.
The exclusions must be justified with a
description of which scope 3 category it
relates to, and any requested exclusions
must be fully quantified. The SBTi does not
recognize emissions perceived to be
“negligible” as a rationale for not reporting
them. Even if emissions from certain
activities or operations are perceived to be
negligible, these emissions still must be
quantified and reported in the reporting
company’s GHG inventory. This is
regardless of whether the reporting company
chooses to exclude them or not, as
exclusions must also be quantified and
reported.
C6 – Scope 3 emissions coverage for near-term ● S3 targets, collectively, must cover at least Criterion met if:
targets two-thirds (i.e., 67%) of total reported and ● S3 targets collectively cover at least 67% of
excluded S3 emissions. total reported and excluded S3 emissions,
Companies must set one or more emission reduction ● Exclusions in the GHG inventory and target considering the minimum boundary of each
near-term targets and/or supplier or customer boundary must not exceed 33% of total S3 category.
engagement targets that collectively cover(s) at least scope 3 emissions.
two-thirds (67%) of total reported and excluded scope

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3 emissions considering the minimum boundary of ● Scope 3 emissions coverage is a product of Criterion not met if:
each scope 3 category in conformance with the GHG GHG inventory coverage and target ● Target boundary is unclear or covers less
Protocol Corporate Value Chain (Scope 3) coverage i.e., than 67% of total reported and excluded S3
Accounting and Reporting Standard. 𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 3 𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 = emissions. OR
𝐺𝐺𝐺𝐺𝐺𝐺 𝑖𝑖𝑖𝑖𝑖𝑖𝑒𝑒𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 × ● Companies include categories of emissions
𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐. they plan to reduce by activities outside of the
● Therefore, companies excluding 5% of corporate value chain (e.g., avoided
emissions from the scope 3 inventory must emissions) in the target boundary.
cover at least 70.6% of their total reported
scope 3 emissions with a near-term
target(s).
● Targets addressing optional sources of
scope 3 emissions e.g., indirect use-phase
emissions do not count towards the two-
thirds boundary. For a definition of optional
emissions for each scope 3 category, please
see Table 5.4 (page 34) of the Corporate
Value Chain (Scope 3) Accounting and
Reporting Standard.
● Targets covering categories of emissions
that the company plans to reduce by
activities outside the company’s value chain
(i.e., avoided emissions) do not count
towards the two-thirds boundary.
● Companies can account for projected grid
improvements in GHG intensity that
contribute to emissions reduction in scope 3
category 11. Companies must provide
supplementary materials with detailed
calculation methods to support claims on
emissions reductions.

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 II. Method validity
C7 – Method validity ● Companies must use correct target setting If an approved SBT method was employed to develop
methods for their sector. the target:
Targets must be modeled using the latest version of ● The latest version of the method/tool must Criterion met if:
methods and tools approved by the initiative. Targets be used to set targets. ● The latest version of the methods and tools
modeled using previous versions of the tools or are used to set the targets. AND
● Older versions of a method or a tool can only
methods can only be submitted to the SBTi for ● If the company is in a sector that requires a
be used within 6 months of the publication of
validation within 6 months of the publication of the specific method to be used, the appropriate
an updated version unless otherwise noted.
revised method or sector-specific tools. method/tool is used. OR
● The SBTi recommends using the most
ambitious decarbonization scenarios that ● An older version of a tool/method was used
lead to the earliest reductions and the least but the target was submitted within 6 months
cumulative emissions. of the publication of the latest corresponding
tool/method.

Criterion not met if:

● If the company is in a sector that requires a
specific method to be used, the appropriate
method/tool is not used. OR
● An older version of a tool/method was used
but the target was submitted after 6 months of
the publication of the latest corresponding
tool/method.
III. Emissions accounting requirements
C8 – Scope 2 accounting approach ● Companies must select consistent Criterion met if:
approaches for S2 accounting for the base ● The method used to account for base year
Companies shall disclose whether they are using a year GHG inventory and tracking progress and most recent year S2 inventory is the
location- or market-based accounting approach as against S2 targets. same. AND
per the GHG Protocol Scope 2 Guidance to calculate ● When modeling targets using the SDA, it ● The method used to track performance
base year emissions and to track performance companies should model purchased heat and towards its S2 target is consistent with the

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against a science-based target. The GHG Protocol steam related emissions as if they were part methods used for the base and most recent
requires measuring and reporting scope 2 emissions of their direct emissions, i.e., scope 1. year inventories. AND
using both approaches. However, a single and ● If companies are using a method that does not ● If a renewable electricity sourcing target is set
consistent approach must be used for setting and already embed efficiency gains for the specific that will be achieved through market-based
tracking progress toward a SBT (e.g., using location- sector, market – and the decarbonization mechanisms, company is using the market-
based approach for both target setting and progress projected for the power sector is based on a based approach to report and track scope 2
tracking). 1.5°C scenario – these factors should be emissions.
considered when modeling electricity-related
scope 2 targets. Criterion not met if:
● Companies are encouraged to report both ● The method used to account for base year
market and location-based scope 2 and most recent year S2 inventory is not
emissions, however, companies setting consistent. OR
renewable electricity sourcing targets that will ● The company disclosed a base year S2
be achieved through market-based inventory, (which includes a consistent
mechanisms must report and track using approach to both base year and most recent
market-based scope 2 emissions. year accounting, if relevant) that is
inconsistent with its target performance
tracking approach. OR
● If a renewable electricity sourcing target is set
that will be achieved through market-based
mechanisms, company is not using the market-
based approach to report and track scope 2
emissions.
C9 – Scope 3 inventory ● Companies must complete a full inventory Criterion met if:
for gross S3 emissions for all its emissions ● A complete S3 inventory, at a minimum, is
Companies must complete a scope 3 inventory sources assigned to the appropriate scope 3 conducted for all relevant categories. AND
covering gross scope 3 emissions for all its emissions categories as set out by the GHG Protocol ● Clear justification is provided for categories
sources according to the minimum boundary of each Corporate Value Chain (Scope 3) that are deemed not applicable. AND
scope 3 category set out by the GHG Protocol Accounting and Reporting Standard. ● All scope 3 emission sources are reported
Corporate Value Chain (Scope 3) Accounting and
with no significant exclusions.
Reporting Standard.

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 ● Estimates using tools such as the Scope 3 Criterion not met if:
Evaluator to calculate scope 3 emission ● A complete S3 inventory is not conducted for
categories are acceptable, although primary all relevant categories. OR
data is preferable and best practice. ● Clear justification is not provided for
● Companies must provide sufficient and categories that are deemed not applicable.
reasonable justification for categories that OR
are deemed not relevant or applicable, ● Scope 3 emission sources are reported with
noting C5 on allowable exclusion thresholds. significant exclusions above the allowable
● Sector-specific emission profiles and thresholds as per C5.
compliance with the chosen consolidation
approach should be addressed during
inventory compilation.
● Each category reported must meet the
minimum boundary requirements. For a
definition of the minimum boundary of each
scope 3 category, please see Table 5.4
(page 34) of the Corporate Value Chain
(Scope 3) Accounting and Reporting
Standard.
C10 – Bioenergy accounting ● Companies using bioenergy must report CO2 Criterion met if:
emissions from the combustion, processing ● Bioenergy is not being used and no
CO2 emissions from the combustion, processing and and distribution phase of bioenergy and the emissions/removals are reported. OR
distribution phase of bioenergy – as well as the land land use emissions and removals associated ● Bioenergy is being used and the related
use emissions and removals associated with with bioenergy feedstocks alongside the bioenergy emissions/removals are reported
bioenergy feedstocks – shall be reported alongside a inventory. alongside the inventory and included in the
company’s GHG inventory. Furthermore, these ● Companies must report direct biogenic CO2 target boundary. AND
emissions shall be included in the target boundary emissions and removals separately i.e., report
● Companies agree to include the footnote with
when setting a science-based target (in scopes 1, 2 gross emissions and gross removals from
the target language. AND
and/or 3, as required) and when reporting progress bioenergy feedstocks. Companies should also
against that target. report the net emissions from the emissions
● Companies provide details on the bioenergy
sources, the methods used to calculate

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Land-related emissions accounting shall include CO2 and removals of CO2 associated with bioenergy emissions/removals until SBTi-
emissions from direct land use change (LUC) and bioenergy. endorsed method becomes available and
non-LUC emissions, inclusive of N2O and CH4 ● Companies using bioenergy must disclose the agree to adjust its figures in the future if
emissions from land use management. Including justifications/assumptions on the methods and necessary.
emissions associated with indirect LUC is optional. renewability of the bioenergy sources. This will
include assumptions on emission factors. Criterion not met if:
Companies are expected to adhere to any additional ● Companies using bioenergy must also confirm ● Bioenergy is being used but the related
GHG Protocol Guidance on bioenergy accounting that they will update their inventory if/when the emissions and removals are not disclosed
when released in order to maintain compliance with SBTi endorses specific methods/factors for with the GHG inventory. OR
criterion 10. estimating these emissions/removals. ● Bioenergy is being used and disclosed
● Companies using bioenergy must confirm that alongside the inventory, but related
CO2 emissions from the combustion, emissions/removals are not included in the
processing and distribution phase of target boundary. OR
bioenergy and the land use emissions and
● Bioenergy is being used, disclosed alongside
removals associated with bioenergy
the inventory, bioenergy emissions/removals
feedstocks are included in the target
are included in the target boundary, but the
boundary. This applies even if the companies
company refuses to include the footnote in
assume net zero carbon emissions from the
the target language that "*The target
use of bioenergy.
boundary includes land-related emissions
● Land-related emissions accounting shall
and removals from bioenergy feedstocks.”.
include CO2 emissions from direct land use
OR
change (LUC) and non-LUC emissions,
inclusive of N2O and CH4 emissions from
● Bioenergy is being used, disclosed alongside
the inventory, bioenergy emissions/removals
land use management. Including emissions
are reported in the corresponding scopes and
associated with indirect LUC is optional.
included in the target boundary, the company
● For targets that include bioenergy, the target agrees to include the footnote in the target
language must include the following footnote:
language, but does not agree to update its
"*The target boundary includes land-related
inventory using SBTi-endorsed methodology
emissions and removals from bioenergy
and factors if they become available in the
feedstocks.”
future. OR

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 ● The SBTi recommends that companies using ● Companies claim carbon neutrality of
or producing biofuel(s) for transport should bioenergy without providing relevant evidence
support their bioenergy GHG accounting with (e.g., certification). OR
recognized biofuel certification(s) to disclose ● The positive impact of exceeding zero
that the data on land-related emissions and emissions due to biogenic removals are being
removals represents the relevant biofuel accounted for in a company’s target
feedstock production. formulation. OR
● The positive impact of exceeding zero
emissions due to biogenic removals are being
accounted for as progress towards science-
based targets. OR
● Removals that are not directly associated with
bioenergy feedstock production are being
counted as progress towards science-based
targets. OR
● Bioenergy is being used and the company
complies with all the related requirements but
fails to provide proper justifications for the
assumptions of net zero carbon emissions
from the use of bioenergy.
C11 – Carbon credits ● Carbon credits/offsets are not eligible to be Criterion met if:
included in the GHG inventory or target ● No use of carbon offsets is disclosed by the
The use of carbon credits must not be counted as boundary. company or perceived in the submission form.
emission reductions toward the progress of ● For targets submitted, which are very OR
companies’ near-term science-based targets. Carbon ambitious (>60% absolute reduction) over a ● The use of carbon offsets is disclosed by the
credits may only be considered to be an option for short timeframe, companies should justify company, but they confirm they will not count
neutralizing residual emissions (see Net-Zero C28) or how these targets are expected to be met them towards the progress of their science-
to finance additional climate mitigation beyond their without the use of offsets. based target.
science-based emission reduction targets (see Net-
Zero R9).

17
 Criterion not met if:
● Any form of voluntary or compliance-related
offsets is counted as reductions toward the
progress of the company’s target.
C12 - Avoided emissions ● Avoided emissions accounting is not Criterion met if:
permitted in the GHG inventory or target ● No use of avoided emissions is disclosed by
Avoided emissions fall under a separate accounting boundary. the company in the submission form. AND
system from corporate inventories and do not count ● No sign of the use of avoided emissions in the
toward near-term science-based emission reduction The following are example claims that are not valid inventory or the target boundary.
targets. when setting SBTs:
● Product use targets, which claim to “help Criterion not met if:
avoid” product users’ emissions in ● Submission reveals any use of avoided
comparison to an alternative product, on a emissions, either as part of the inventory or the
purely hypothetical basis. target setting process.
● Claims that a product’s total lifecycle
emissions are lower than alternative products
that provide equivalent functions.
● Use of “baselining” to calculate the emissions
impact of a product, which is only acceptable
for project accounting and different from
corporate accounting.
IV. Target Formulation

IV.I Timeframe
C13 – Base and target years ● This criterion applies to percentage-based Criterion met if:
scope 1 and/or 2 and/or 3 emission reduction ● A percentage-based emission reduction target
Absolute and intensity-based emission reduction targets, either in absolute or intensity-based (intensity or absolute) is being set for scope 1
near-term targets must cover a minimum of 5 years terms. Supplier engagement targets (see and/or 2 and/or 3. AND
and a maximum of 10 years from the date the target

18
is submitted to the SBTi for validation. The choice of C19) and renewable electricity targets (see ● The target year is between 5 and 10 years
base year must be no earlier than 2015. C21) are exceptions. (inclusive) from the date of submission to the
● If the target is submitted for validation in the SBTi. AND
first half of the year (i.e., by the end of June), ● Base year data is for a complete past calendar
the timeframe includes the year of or financial year. AND
submission. If submitted in the second half of ● The choice of calendar year or financial year is
the year, the timeframe begins from the start applied consistently for base year and target
of the following year. year for targets covering a specific scope of
● For example, for targets submitted for emissions i.e., if a company chooses to use a
validation in the first half of 2023 the valid fiscal year for a scope 1+2 target, this needs to
target years are between 2027 and 2032 be applied for both the base year and target
inclusive. For those submitted in the second year for a scope 1+2 target. AND
half of 2023 (from 1 July), the valid target ● The choice of a calendar year or a financial
years are between 2028 and 2033 inclusive. year is applied consistently across base years
● Long-term targets can only be validated in for scopes 1, 2 and 3 (if relevant).
accordance with the Net-Zero Standard
Criteria. Criterion not met if:
● Base years must cover a complete past ● The target year is not between 5 and 10 years
calendar or financial year. (inclusive) from the date of submission to the
● Companies must select either a calendar year SBTi. OR
or a financial year and apply this consistently ● Base year data is not available for a complete
across the choice of base years for scopes 1, past calendar or financial year. OR
2 and 3 (if relevant). ● Only a long-term target (10 years from the date
● The choice of base year must be no earlier of submission up to 2050) has been submitted.
than 2015. OR
● It is recommended companies use the same ● The choice of calendar year or financial year is
base year and most recent year when not applied consistently for base year and
reporting greenhouse gas inventories to the target year for targets covering a specific scope
SBTi, but, if necessary, companies can report of emissions. OR
a different year for scope 3 when compared to

19
 scope 1 and 2. Scope 1 and 2 base years and ● The choice of a calendar year or a financial
most recent years must be consistent. year is not applied consistently across base
● It is recommended that companies use the years for scopes 1, 2 and 3 (if relevant).
same base years for all near-term targets.

C14 – Progress to date This criterion is only relevant for percentage-based The criterion is met if the most recent year is no earlier
emission reduction targets. This criterion does not than 2021. AND
The minimum forward-looking ambition of near-term apply to renewable electricity targets.
targets is consistent with reaching net-zero by 2050 ● The most recent GHG inventory provided If the target is absolute-based, criterion met if:
at the latest, assuming a linear absolute reduction, must be for a complete year. ● Forward-looking ambition is at a minimum,
linear intensity reduction, or intensity convergence ● Companies must provide all the relevant GHG aligned with reducing emissions 90% by 2050
between the most recent year and 2050 (not inventory data including a most recent year from base year levels based on a linear
increasing absolute emissions or intensity). GHG inventory even if business activities reduction between the most recent year and
were impacted by the COVID-19 pandemic. 2050.
● For submissions in 2023, a recent year
inventory must be provided that is no earlier If the target is intensity-based, criterion met if:
than 2021 i.e., allowable most recent years ● SDA pathway is representative of company
are 2021 and 2022. activities. AND
● If any years subsequent to the base year are ● The ambition is at a minimum, aligned with
unrepresentative, companies must explain reaching the net-zero convergence intensity
why in the Target Submission Form, and based on a linear intensity reduction between
indicate the rationale for the choice of most the most recent year and 2050. OR
recent year. The representativeness of both ● Forward-looking ambition is at a minimum,
the base and most recent year will be aligned with the minimum ambition threshold of
thoroughly evaluated during the validation the relevant 1.5°C pathway between the most
process. recent year and target year.
● Near-term targets that have been achieved at The criterion is not met if the most recent year is earlier
the time of submission to the SBTi for than 2021. OR
validation, are not eligible. The achievement
of near-term targets due to COVID-19 If the target is absolute-based, criterion not met if:

20
 pandemic impacts on the levels of business ● Forward-looking ambition is not aligned with
activity does not apply. reducing emissions 90% by 2050 from base
year levels based on a linear reduction
If the target is absolute-based: between the most recent year and 2050.
● Forward-looking ambition (i.e., ambition from
the most recent year of data to 2050) must be, If the target is intensity-based, criterion not met if:
at a minimum, aligned with reducing ● SDA pathway is not representative of company
emissions 90% by 2050 from base year levels activities. OR
based on a linear reduction between the most ● The forward-looking ambition is not aligned
recent year and 2050. with reaching the net-zero convergence
intensity based on a linear intensity reduction
If the target is intensity-based based on a 1.5°C between the most recent year and 2050. OR
SDA pathway:
● Forward-looking ambition is not aligned with
● The pathway must be representative of the the minimum ambition threshold of the relevant
company’s activities. 1.5°C SDA pathway between the most recent
● Companies have two options to meet forward- year and target year.
looking ambition for intensity-based SDA
targets:
● The forward-looking ambition is aligned with
reaching the net-zero convergence intensity
based on a linear intensity reduction between
the most recent year and 2050. OR
● The forward-looking ambition is aligned with
the minimum ambition threshold of the
relevant 1.5°C SDA pathway between the
most recent year and target year.
V. Ambition

V.I Scope 1 and 2 near-term targets

21
C15 – Level of ambition for scope 1 and 2 near- ● For renewable electricity procurement targets, If the target is absolute-based, the criterion is met
term targets refer to criterion C21. For percentage-based if:
emission reduction targets, please refer to ● Company is in compliance with criterion C16.
At a minimum, scope 1 and scope 2 near-term targets criterion C16 for absolute scope 1 and 2
must be consistent with the level of decarbonization targets and criterion C17 for intensity scope 1 If the target is intensity-based, criterion met if:
required to keep global temperature increase to and 2 targets. ● Company is in compliance with criterion C17.
1.5°C compared to pre-industrial temperatures.
If the target is absolute-based, the criterion is not
met if:
● Company is in non-compliance with criterion
C16.

If the target is intensity-based, criterion not met if:

● Company is in non-compliance with criterion
C17.
C16 - Absolute targets ● The ambition must be, at a minimum, aligned Criterion met if:
with the 1.5°C ambition threshold. ● For base years after 2020, the absolute
Absolute reduction targets for scope 1 and scope 2 emissions reduction meets the minimum
are eligible when they are at least as ambitious as the reduction value over the target period as set
minimum of the approved range of emissions out below:
scenarios consistent with the 1.5°C goal. Minimum value for absolute reduction target =
4.2% x (Target year - 2020)
● For base years between 2015 and 2020
(inclusive), the absolute emissions reduction
meets the minimum reduction value over the
target period as set out below:
Minimum value for absolute reduction target =
4.2% x (Target year - base year)

22
 Criterion not met if:
● For base years after 2020, the absolute
emissions reduction does not meet the
minimum reduction value over the target period
as set out below:
Minimum value for absolute reduction target =
4.2% x (Target year - 2020)
● For base years between 2015 and 2020
(inclusive), the absolute emissions reduction
does not meet the minimum reduction value
over the target period as set out below:
Minimum value for absolute contraction target
= 4.2% x (Target year - base year).
C17 - Intensity targets ● For scope 1 and 2 intensity targets, the only Criterion met if:
available methodology is using sector-specific ● SDA pathway is representative of company
Intensity targets for scope 1 and scope 2 emissions intensity convergence pathways aligned with activities. AND
are only eligible when they are modeled using an 1.5°C. ● The ambition between the base year and target
approved 1.5°C sector pathway applicable to ● The pathway must be representative of a year is aligned with the minimum ambition
companies’ business activities. company’s activities and the ambition must be threshold of the relevant 1.5°C SDA pathway.
aligned with the minimum ambition threshold
of the relevant 1.5°C SDA pathway between Criterion not met if:
the base year and target year. ● The choice of SDA pathway is not
representative of company activities. OR
● The ambition between the base year and target
year is not aligned with the minimum ambition
threshold of the relevant 1.5°C SDA pathway.
V.II Scope 3 near-term targets

23
C18 - Level of ambition for scope 3 emissions For absolute percentage-based emission For absolute based percentage emission reduction
reductions targets reduction targets: targets, criterion met if:
● The timeframe ambition (i.e., ambition from ● For base years after 2020, the absolute
At a minimum, near-term scope 3 targets (covering the base year to the target year) must be, at a emissions reduction meets the minimum
the entire value chain or individual scope 3 minimum, aligned with the well-below 2°C reduction value over the target period as set
categories) must be aligned with methods consistent ambition threshold. out below:
with the level of decarbonization required to keep Minimum value for absolute contraction target
global temperature increase well-below 2°C If the target is based on reduction of economic = 2.5% x (Target year - 2020)
compared to pre-industrial temperatures. intensity): ● For base years between 2015 and 2020
● The intensity targets must be paired with (inclusive), the absolute emissions reduction
relevant activity growth projections. meets the minimum reduction value over the
● Economic intensity reductions are aligned to target period as set out below:
at least a 7% economic intensity reduction in Minimum value for absolute contraction target
annual compounded terms. = 2.5% x (Target year - base year)
● The economic intensity metric must be based
on greenhouse gas emissions per unit of For economic intensity-based percentage emission
value added (GEVA), the calculations of value reduction targets, criterion met if:
added must use the formulae set out in ● GEVA is used as the chosen economic
“Greenhouse gas emissions per unit of value intensity metric and an acceptable formula has
added (“GEVA”) — A corporate guide to been used to calculate GEVA. AND
voluntary climate action”: ● For base years after 2020, the economic
● Value added = gross profit. intensity emissions reduction meets the
● Value added = operating profit = earnings minimum reduction value as set out below over
before interest and depreciation (EBITDA) + the target period:
all personnel costs. Personnel costs should Minimum value for economic intensity target =
include payment to management and board 100% - (93%) (Target year - 2020)
members. ● For base years between 2015 and 2020
● Value added = sales revenue - the cost of (inclusive), the economic intensity emissions
goods and services purchased from external reduction meets the minimum reduction value
suppliers over the target period as set out below:

24
If target is based on reduction of physical Minimum value for economic intensity target =
intensity: 100% - (93%) (Target year – base year)
● The physical intensity denominator must be
representative of the company's emissions in For physical intensity-based percentage emission
the target boundary. reduction targets, criterion met if:
● The physical intensity denominator ● If an SDA pathway is available, the timeframe
corresponds to a measurable product, output ambition is aligned with the minimum ambition
or level or service, it cannot be a unit of threshold of the relevant SDA pathway. OR
monetary or economic value. Companies are ● For base years after 2020, the physical
required to provide a clear definition of the intensity emissions reduction meets the
physical intensity unit applied in this type of minimum reduction value as set out below over
target. the target period:
● If an SDA pathway is available, the timeframe Minimum value for physical intensity target =
ambition must be aligned with the minimum 100% - (93%) (Target year - 2020)
ambition threshold of the relevant SDA ● For base years between 2015 and 2020
pathway. (inclusive), the physical intensity emissions
● If no SDA pathway is relevant, targets must reduction meets the minimum reduction value
drive ambitious physical intensity reduction to over the target period as set out below:
lead to at least a 7% physical intensity Minimum value for physical intensity target =
reduction in annual compounded terms. 100% - (93%) (Target year – base year)

For absolute based percentage emission reduction

targets, criterion not met if:
● For base years after 2020, the absolute
emissions reduction does not meet the
minimum reduction value over the target period
as set out below:
Minimum value for absolute contraction target
= 2.5% x (Target year - 2020)
● For base years between 2015 and 2020
(inclusive), the absolute emissions reduction

25
 does not meet the minimum reduction value
over the target period as set out below:
Minimum value for absolute contraction target
= 2.5% x (Target year - base year)

For economic intensity-based percentage emission

reduction targets, criterion not met if:
● GEVA is not used as the chosen economic
intensity metric, or an acceptable formula has
not been used to calculate GEVA. AND
● For base years after 2020, the economic
intensity emissions reduction does not meet
the minimum reduction value as set out below
over the target period:
Minimum value for economic intensity target =
100% - (93%) (Target year - 2020)
● For base years between 2015 and 2020
(inclusive), the economic intensity emissions
reduction does not meet the minimum
reduction value over the target period as set
out below:
Minimum value for economic intensity target =
100% - (93%) (Target year – base year)

For physical intensity-based percentage emission

reduction targets, criterion not met if:
● If an SDA pathway is available, the timeframe
ambition is not aligned with the minimum
ambition threshold of the relevant SDA
pathway. OR

26
 ● For base years after 2020, the physical
intensity emissions reduction does not meet
the minimum reduction value as set out below
over the target period:
Minimum value for physical intensity target =
100% - (93%) (Target year - 2020)
● For base years between 2015 and 2020
(inclusive), the physical intensity emissions
reduction does not meet the minimum
reduction value over the target period as set
out below:
Minimum value for physical intensity target =
100% - (93%) (Target year – base year)
C19– Supplier or customer engagement targets ● The supplier/customer engagement target Criterion met if:
boundary must correspond only to the ● Companies provide information on the
Near-term targets to drive the adoption of science- suppliers’/customers’ emissions that are percentage of emissions and the relevant
based emission reduction targets by their suppliers being covered by the target. categories the target covers. AND
and/or customers are acceptable when the following ● If suppliers/customers are only required to set ● The target year is a maximum of 5 years from
conditions are met: SBTs on certain scopes, only those scopes of the date the target is submitted for validation.
Boundary: Companies may set engagement targets emissions shall be accounted for in the AND
around relevant and credible upstream or boundary. ● Companies specify in the target language that
downstream categories.
● The portion of suppliers/customers that are their suppliers/customers will have science-
Formulation: Companies shall provide information in
covered by the target and how much they based targets that meet the latest SBTi Criteria
the target language on what percentage of emissions
represent in overall emissions must be for Near-term Targets.
from relevant upstream and/or downstream
disclosed. This can be demonstrated by
categories is covered by the engagement target or, if
supplying information on the group, Criterion not met if:
that information is not available, what percentage of
annual procurement spend is covered by the target.
percentage, or theme of suppliers/customers ● Target year is more than 5 years from the date
that will be covered by the target. it was submitted for validation. OR
Timeframe: Companies’ engagement targets must be
fulfilled within a maximum of 5 years from the date
● A high-level plan of supplier/customer
engagement should also be included within

27
the company’s target is submitted to the SBTi for a the submission form including the portion of ● Target does not specify the percentage of all
validation. suppliers/customers covered by the target. suppliers’/customers’ emissions covered by
Ambition level: The company’s suppliers/customers ● Companies may use a “per spend” proxy and the target. OR
shall have science-based emission reduction targets must provide an estimate of the emissions ● Target does not specify the requirement for its
in line with the latest version of the SBTi Criteria for coverage associated with that spend to suppliers/customers to have science-based
Near-term Targets. demonstrate that C6 is met. targets that meet the latest SBTi Criteria for
● If using a per spend proxy, the percentage Near-term Targets. Instead, it uses generic
covered must only correspond to the spend on language such as GHG reduction or
suppliers/customers in the desired scope 3 engagement targets.
categories of the target coverage.
● The target year, in which suppliers’ targets
have been set, must be within 5 years
(inclusive) from the date of submission. E.g.,
for targets submitted for validation in the first
half of 2023, valid target years are up to and
including 2027. For those submitted in the
second half of 2023 (from 1 July), valid target
years are up to and including 2028.
● Supplier/customer engagement targets are
required to be set in accordance with the latest
version of the SBTi Criteria for Near-term
Targets. Official validation of suppliers’ targets
by SBTi are not required, though companies
are welcome to encourage this if they wish.
● It is recommended that suppliers/customers
classified as a SME, submit targets through
the SME streamlined route.
● Engagement targets on downstream
customers may also be set. If pursuing this
route, the company must also disclose how it

28
 can credibly influence these customers to set
their own targets.

V.III Combined targets

C20 – Combined scope targets ● Targets combining S1+2 must be in line with For combined S1+2 targets, criterion met if:
the ambition criteria C14 and C15. ● Combined S1+2 portion meets criteria C14 and
Targets that combine scopes (e.g., 1+2 or 1+2+3) are ● For targets combining S1, S2, and scope 3 C15.
permitted. When submitting combined targets, the (S3): the S1+2 portion of the target must be in
scope 1+2 portion must be in line with at least a 1.5°C line with criteria C14 and C15 and the S3 For combined S1+2+3 targets, criterion met if:
scenario and the scope 3 portion of the target must portion must be in line with criterion C18. ● The combined S1+2 ambition is in line with C14
be in line with at least a well-below 2°C scenario. For and C15. AND
sectors where minimum target ambition is further
● The S3 portion is in line with criterion C18.
specified for companies’ scope 3 activities, C24
supersedes C20.
For combined S1+2 targets, criterion not met if:
● Combined S1+2 portion does not meet criteria
C14 and C15.

For combined S1+2+3 targets, criterion not met if:

● The combined S1+2 ambition is not in line with
C14 and C15. OR
● The S3 portion is not in line with criterion C18.
V.IV Renewable electricity targets

29
C21 – Renewable electricity ● Targets should be formulated to specifically Criterion met if:
address the active sourcing of renewable ● The active sourcing of renewable electricity in
Targets to actively source renewable electricity at a electricity. the target year is at or above the minimum
rate that is consistent with 1.5°C scenarios are an ● For more information, please consult the share thresholds of at least 80% by 2025,
acceptable alternative to scope 2 emission reduction RE100 Technical Criteria and the Scope 2 100% by 2030, and/or intermediate targets in
targets. The SBTi has identified 80% renewable Quality Criteria in the GHG Protocol’s Scope line with this rate of reduction. AND
electricity procurement by 2025 and 100% by 2030 2 Guidance. ● The target language explicitly refers to ‘active
as thresholds (portion of renewable electricity over
● Companies that are already actively sourcing sourcing’ of renewable electricity (please refer
total electricity use) for this approach in line with the to RE100’s quality criteria for options for
renewable electricity at or above the minimum
recommendations of RE100. Companies that already actively sourcing renewable electricity).
thresholds must commit to maintain or
source electricity at or above these thresholds shall
increase their use share of renewable
maintain or increase their use of renewable electricity Criterion not met if:
electricity to qualify.
to qualify.
● Targets that fall between 2025 and 2030 will ● The active sourcing of renewable electricity in
be accepted if they meet the linear the target year is below the minimum share
progression of these requirements. thresholds of at least 80% by 2025, 100% by
Specifically: 2030, and/or intermediate targets are not in line
● 84% by 2026; with this rate of reduction. OR
● 88% by 2027; ● The target language does not explicitly refers
to ‘active sourcing’ of renewable electricity
● 92% by 2028; or
(please refer to RE100’s quality criteria for
● 96% by 2029.
options for actively souring renewable
electricity).
V.V Fossil fuel sales, distribution, and other business

30
C22 - Sale, transmission, distribution of oil, This criterion is only relevant for companies that are Criterion met if:
natural gas, coal as well as other fossil fuels involved in the sale, transmission, distribution of oil, ● At least one target covering the direct use
natural gas, coal as well as other fossil fuels. phase emissions of fossil fuels sold,
Companies that sell, transmit, or distribute natural Companies that derive 50% or more of revenue from transmitted, or distributed is set. AND
gas – or other fossil fuel products – shall set emission fossil fuels cannot have their targets validated at this ● Timeframe ambition in absolute terms is
reduction scope 3 targets for the “use of sold time and must follow the Oil and Gas sector aligned with a 1.5°C pathway.
products” category, that are at a minimum consistent methodology once published.
with the level of decarbonization required to keep ● Companies must disclose if this criterion is Criterion not met if:
global temperature increase to 1.5°C compared to relevant and, if so, must submit a scope 3 ● No target has been set that covers the direct
pre-industrial temperatures, irrespective of the share target that covers 100% of downstream use use phase emissions of fossil fuels sold,
of these emissions compared to the total scope 1, 2, of fossil fuels. transmitted, or distributed. OR
and 3 emissions of the company, company's sector ● Fossil fuels distributed or transmitted must be
classification, or whether fossil fuel sale/distribution is
● Timeframe ambition in absolute terms is not
accounted for in GHG inventory and target aligned with a 1.5°C pathway.
the company's primary business. Customer boundary, even if they are not sold directly by
engagement targets are not eligible for this criterion. the company.
● The timeframe ambition must be, at a
minimum, aligned with the 1.5°C ambition
threshold.
C23 - Companies in the fossil fuel production ● Companies with any level of direct Criterion met if:
business or with significant revenue from fossil involvement in exploration, extraction, mining ● Company is not involved in exploration,
fuel business lines and/or production of oil, natural gas, coal or extraction, mining and/or production of oil,
other fossil fuels, irrespective of percentage natural gas, coal, as well as other fossil fuels
The SBTi will not currently validate targets for: revenue generated by these activities, i.e., i.e., no revenue is generated from these
Companies with any level of direct involvement in including, but not limited to, integrated oil and activities. OR
exploration, extraction, mining and/or production of gas companies, integrated gas companies, ● Company does not derive 50% or more of their
oil, natural gas, coal or other fossil fuels, irrespective exploration and production pure players, revenue from the sale, transmission and
of percentage revenue generated by these activities. refining and marketing pure players, oil distribution of fossil fuels, or providing
Companies that derive 50% or more of their revenue products distributors, gas distributors and equipment or services to fossil fuel companies.
from the sale, transmission and distribution of fossil retailers and traditional oil and gas service OR
fuels, or by providing equipment or services to fossil companies cannot get their targets validated
fuel companies. at this stage.

31
Companies with more than 5% revenue from fossil ● Companies that derive more than 50% of ● Company has less than 5% revenue from fossil
fuel assets (e.g., coal mine, lignite mine, etc.) for revenue from a) sale, transmission and fuel assets (e.g., coal mine, lignite mine, etc.)
extraction activities with commercial purposes. distribution of fossil fuels, or b) providing for extraction activities with commercial
These companies must follow the respective sector equipment or services to fossil fuel companies purposes.
methodology, once published. cannot have their targets validated at this
time. Criterion not met if:
● Companies which derive 50% or more of their ● Company is involved in exploration, extraction,
revenue from fossil fuels must follow the mining and/or production of oil, natural gas,
respective sector methodology once coal as well as other fossil fuels i.e., revenue is
published. generated from these activities. OR
● Companies with more than 5% revenue from ● Company does derive 50% or more of their
fossil fuel assets (e.g., coal mine, lignite mine, revenue from the sale, transmission and
etc.) for extraction activities with commercial distribution of fossil fuels, or providing
purposes cannot have their targets validated equipment or services to fossil fuel companies.
at this time and must follow the respective OR
sector methodology, once published. ● Company has more than 5% revenue from
● Companies that can join the SBTi include: fossil fuel assets (e.g., coal mine, lignite mine,
● Companies that derive less than 50% of etc.) for extraction activities with commercial
revenue from a) sale, transmission and purposes.
distribution of fossil fuels, or b) providing
equipment or services to fossil fuel
companies.
● Companies with less than 5% revenue from
fossil fuel assets (e.g., coal mine, lignite mine,
etc.) for extraction activities with commercial
purposes.
● Electric utilities that mine coal for their own
power generation.

32
 ● Subsidiaries of fossil fuel companies may join
the SBTi if the subsidiary itself is not
considered a fossil fuel company.
● For more information, please visit SBTi’s
policy on fossil fuel companies.
VI. Sector specific guidance
C24 - Requirements from sector-specific ● If a company operates within a sector where Criterion met if:
guidance sector-specific guidance is available, it must ● No sector-specific guidance is relevant or
follow the latest guidance within 6 months of available for the company’s sector. OR
Companies must follow requirements for target its publication. ● Sector-specific guidance is available, and the
setting and minimum ambition levels as indicated in latest version is followed. OR
relevant sector-specific methods and guidance – at
● The company uses an older version of sector-
the latest, 6 months after the sector guidance
specific guidance for a submission within 6
publication. A list of the sector-specific guidance and
months of a newer publication.
requirements is available below and in the Target
Validation Protocol for Near-term Targets.
Criterion not met if:
● Sector-specific guidance is available, and the
latest version is not followed. OR
● The company uses an older version of sector-
specific guidance for a submission after 6
months of a newer publication.
VII. Reporting and recalculation
C25 - Frequency ● Companies must state where they will Criterion met if:
disclose the progress and the frequency of the ● The company commits to publicly reporting its
The company shall publicly report its company-wide issuance of their public GHG inventory report GHG inventory and target progress on an
GHG emissions inventory and progress against and progress against their target. annual basis. AND
published targets on an annual basis. ● The SBTi recommends disclosure through ● States where this information will be disclosed.
standardized, comparable data platforms

33
 such as CDP’s annual questionnaire, though Criterion not met if:
annual reports, sustainability reports and the ● The company does not commit to publicly
company’s website are acceptable. reporting its GHG inventory and target
● For more substantive reporting guidance on progress on an annual basis. OR
how the SBTi recommends companies should ● It is not stated where this information will be
publicly report on their GHG emissions disclosed.
inventory and annual progress against their
published science-based targets, please visit
the Corporate Manual.
C26 - Mandatory target recalculation ● Companies must state whether they will Criterion met if:
review, and if necessary, recalculate and ● The company commits to review, and if
To ensure consistency with the most recent climate revalidate their targets, at a minimum, every 5 necessary, recalculate and revalidate their
science and best practices, targets must be years. targets at a minimum every 5 years. AND
reviewed, and if necessary, recalculated and ● SBTi’s significance threshold is defined as a ● The company commits that they will follow the
revalidated, at a minimum every 5 years. For cumulative change of five percent or larger in most recent criteria if re-submitting targets.
companies with targets approved in 2020 or earlier, an organization’s total base year emissions AND
targets must be reviewed and revalidated by 2025, if (tCO2e). ● The company agrees to adhere to the SBTi’s
necessary. Companies with an approved target that
● All companies must adhere to the SBTi’s 5% 5% significance threshold for base year
requires recalculation must follow the most recent
significance threshold. emissions recalculation. OR
applicable criteria at the time of resubmission. A
company’s base year emissions recalculation policy
● For more information on base year ● The company’s base year emissions
recalculation policies, please visit page 35 of recalculation policy has a significance
must include a significance threshold of 5% or less
the GHG Protocol Corporate Standard. threshold of 5% or less.
that is applied to emission recalculations or in the
absence of a base year emissions recalculation ● A company’s base year emissions
recalculation policy must include a Criterion not met if:
policy, a company must agree to apply a 5%
significance threshold for emission recalculations. significance threshold of 5% or less that is ● The company does not commit to review, and
applied to emission recalculations. if necessary, recalculate and revalidate their
● In the absence of a base year emissions targets at a minimum every 5 years. OR
recalculation policy, a company must agree to ● The company does not commit that they will
apply a 5% significance threshold for emission follow the most recent criteria if re-submitting
recalculations. targets. OR

34
 ● The company’s base year emissions
recalculation policy has a significance
threshold of above 5%. OR
● The company’s base year emissions
recalculation policy has a significance
threshold that is based off qualitative
considerations rather than the SBTi’s 5%
significance threshold. OR
● The company refuses to adhere to the SBTi’s
5% significance threshold for base year
emission calculations.
C27 – Triggered target recalculation Targets must be recalculated, as needed, to reflect Criteria met if:
significant changes that would compromise the ● Emissions inventory and targets are consistent
Targets should be recalculated, as needed, to reflect relevance and consistency of the existing target. with the current business structure. AND
significant changes that could compromise relevance Targets should be recalculated as soon as possible to ● Company agrees to recalculate targets should
and consistency of the existing target. reflect significant changes to remain relevant to the significant changes compromise the relevance
The following changes should trigger a target current company structure and operations. The and consistency of existing target(s).
recalculation: following changes would trigger a target recalculation:
● Scope 3 emissions become 40% or more of ● Scope 3 emissions become 40% or more of Criteria not met if:
aggregated scope 1, 2 and 3 emissions. scope 1, 2, and 3 emissions. ● Emissions inventory and targets are not
● Emissions of exclusions in the inventory or target ● Exclusions in the inventory or target boundary consistent with the current business structure.
boundary change significantly. change significantly. OR
● Significant changes in company structure and
● Significant changes in company structure and ● Company disagrees to recalculate targets
activities (e.g., acquisition, divestiture, merger,
activities (e.g., acquisition, divestiture, should significant changes compromise the
insourcing or outsourcing, shifts in goods or service
merger, insourcing or outsourcing, shifts in relevance and consistency of existing target(s).
offerings).
product or service offerings).
● Significant adjustments to the base year inventory,
data sources or calculation methodologies, or
● Significant adjustments to the base year
inventory, data sources or calculation
changes in data to set targets such as growth
methodologies.
projections (e.g., discovery of significant errors or a

35
number of cumulative errors that are collectively ● Significant changes in data used to calculate
significant). the targets such as growth projections (e.g.,
● Other significant changes to discovery of significant errors or several
projections/assumptions used in setting the science- cumulative errors that are collectively
based targets. significant).
● Other changes to projections/assumptions
used with science-based target setting
methods.
C28 - Target validity ● If officially approved by the SBTi, companies Criteria met if:
must announce their targets at any time within ● Targets are approved by the SBTi. AND
Companies with approved targets must announce 6 months of the approval date. ● Targets are publicly announced by the
their target publicly on the SBTi website within 6 ● Targets unannounced after 6 months must be company within 6 months of the approval date.
months of the approval date. Targets unannounced resubmitted to the SBTi for a complete
after 6 months must go through the approval process validation. Criteria not met if:
again unless a different publication time frame has
● The SBTi recommends that companies check ● Targets are approved by the SBTi. AND
been agreed in writing with the SBTi.
the validity of target-related projections ● Targets are not publicly announced by the
annually. The company should notify the SBTi company within 6 months of the approval date.
of any significant changes and report these
major changes publicly, as relevant.

36
3. Assessing target ambition
There are ten target-setting methods, which are summarized in Table 2. The minimum ambition of near-
term targets calculated using these methods is described in Section 3.1. Section 3.2 includes an
explanation of how forward-looking ambition is assessed.

Table 2. Summary of SBT methods and eligible timeframes, sectors, and scopes per method

Target Target-setting Eligible Eligible

Description Eligible scopes
type method timeframes sectors

Absolute emissions are All sectors

reduced by an amount that is, except the
1. Cross-sector Near-term
at minimum, consistent with power,
absolute and long- Any
the cross-sector pathway. Also maritime
reduction term.
referred to as “absolute and FLAG
Absolute
contraction”. sectors.
targets
2. Sector- Absolute emissions are
Depends on Depends on
specific reduced by an amount that is,
sector sector Any
absolute at minimum, consistent with a
pathway pathway
reduction sector-specific pathway

Physical emissions intensity

targets are calculated based
on all companies in a sector
3. Sector- converging to a sector-specific
Near-term Depends on
specific emissions intensity by 2050 or
and long- sector Any
intensity sooner. Also referred to as
term pathway
convergence “physical intensity
convergence” or “Sectoral
Intensity
Decarbonization Approach
targets
(SDA)".

Economic emissions intensity

4. Scope 3 is reduced by an amount that
Near-term
economic is, at minimum, consistent with
and long- All sectors Scope 3 only
intensity well-below 2°C for near-term
term
reduction targets and 1.5°C for long-term
targets.

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 Physical emissions intensity is
5. Scope 3 reduced by an amount that is,
Near-term
physical at minimum, consistent with
and long- All sectors Scope 3 only
intensity well-below 2°C for near-term
term
reduction targets and 1.5°C for long-term
targets.

Companies actively procure at

Near-term
6. Renewable least 80% renewable electricity
and long- All sectors Scope 2 only
electricity by 2025 and 100% renewable
term
electricity by 2030.

Companies or financial
Other
institutions (FIs) set a target
targets
for suppliers or customers or
investment/lending Near-term
7. Engagement All sectors Scope 3 only
representing a certain percent only
of emissions/assets under
management (AUM) to set
their own SBTs.

Scope 3
category 15
FIs increase the percentage of “investments” for
Near-term
8. Portfolio portfolio companies who have FIs. Portfolio
targets set
Coverage validated SBTs, with the goal FIs companies are
within 5
(FIs) that all portfolio companies expected to
years.
have validated SBTs by 2040. cover scope 1, 2
and 3 (when
relevant).
FIs
FIs increase the percentage of
Scope 3
portfolio companies who have
category 15
ambitious targets, that are at
“investments” for
least well-below 2°C aligned Near-term
FIs. Portfolio
9. Temperature (but not necessarily validated targets set
FIs companies are
Rating (FIs) by the SBTi). The weighted within 5
expected to
average temperature years.
cover scope 1, 2
alignment of all portfolio
and 3 (when
companies must reach 1.5°C
relevant).
by 2040.

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 Scope 3
category 15
Consistent with SDA
Near-term All eligible “investments” for
application for companies, only
targets set sectors FIs. SDA sector
10. SDA for financing to companies within
within 5-10 covered by targets must
portfolios the same sector are weighted
years in the SDA cover eligible
to produce a portfolio level
future. pathways. scopes required
intensity target.
in the SDA tool
for each sector.

3.1 Minimum ambition thresholds

3.1.1 Cross-sector absolute reduction

Using this method, the minimum ambition of near-term scope 1 and/or scope 2 targets is a 4.2% linear
annual reduction between the base year and target year plus an adjustment for base years later than
2020. With this adjustment, targets with a base year later than 2020 must reduce emissions by at least
the same amount overall as targets with a 2020 base year, as shown by the formula below. Targets at
this ambition level are consistent with limiting warming to 1.5°C. For companies using a base year earlier
than the most recent year, scope 1 and/or scope 2 targets must also have sufficient forward-looking
ambition (FLA), as described in section 3.2.1.

For near-term scope 3 targets, the minimum ambition is a 2.5% linear annual reduction between the base
year and target year plus an adjustment for base years later than 2020, as shown by the formula below.

3.1.2 Sector-specific absolute reduction

Using this method, the minimum ambition of near-term targets is calculated based on a sector-specific
absolute reduction emissions pathway. This method is only eligible for companies in the following sectors:
• Information and Communication Technology (ICT)

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All sector-specific absolute emissions pathways currently available are aligned with limiting warming to
1.5°C. For companies using a base year earlier than the most recent year, scope 1 and/or scope 2 targets
must also have sufficient FLA, as described in section 3.2.1.

For companies in the ICT sector, this method is only eligible when target ambition exceeds that of the
cross-sector absolute method.

3.1.3 Sector-specific intensity convergence

Using this method, which is also referred to as “physical intensity convergence” or “Sectoral
Decarbonization Approach (SDA)”, the minimum ambition of near-term targets is calculated based on a
sector-specific emissions intensity convergence pathway and company input data. This method allows
physical emissions intensity metrics and targets to be derived for heavy-emitting sectors and processes
such as road transport, aviation, electricity generation and the production of basic materials. These
sector-specific metrics reflect the different pace at which different sectors and economic activities can
decarbonize in 1.5°C and well-below 2°C-aligned pathways. The method can be used for any scope,
except for scope 3 in cases prohibited by sector-specific guidance.

For scope 1 and/or scope 2 targets, only 1.5°C-aligned pathways are eligible. Scope 1 and/or scope 2
targets with a base year earlier than the most recent year must also have sufficient FLA, as described in
section 3.2.2. For scope 3 targets, well-below 2°C-aligned pathways are also eligible.

Sector-specific pathways are available or in development for energy supply sectors, transport sectors,
industry sectors including cement and steel, the buildings sector, and sectors with significant FLAG
emissions. The following sectors are required to use the sector-specific intensity method to calculate
near-term SBTs:
● Power generation
● Maritime transport

3.1.4 Scope 3 economic intensity reduction

Using this method, the minimum ambition of near-term scope 3 targets is calculated based on a 7% year-
on-year economic emissions intensity reduction between the base year and target year plus an
adjustment for base years later than 2020, as shown by the formula below.

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3.1.5 Scope 3 physical intensity reduction

Using this method, the minimum ambition of near-term scope 3 targets is calculated based on a 7% year-
on-year physical emissions intensity reduction between the base year and target year plus an adjustment
for base years later than 2020, as shown by the formula below:

Eligible denominators for using the scope 3 physical intensity method must be a representative measure
of a company activity intrinsically related to the emissions boundary of the target. Eligible activity types
for applying this method include:

Activity type examples Activity unit examples

Company size Employee headcount, FTE, office/retail area, etc.
Production input Amount procured of raw materials.
Production output Volume of production, sales, built area.
Payload or passenger distance, number of users/subscriptions, service
Level of service
output per unit.

Please note that non-physical denominators such as profit, value added, revenue, sales, etc. cannot be
used for calculating targets using the scope 3 physical intensity method. Sector-specific intensity targets
can also be used to cover scope 3 emissions, except in cases prohibited by sector-specific guidance.

3.1.6 Renewable electricity targets

Targets to actively source renewable electricity are an acceptable alternative to scope 2 emission
reduction targets. Table 3 presents the minimum acceptable thresholds for renewable electricity
procurement. Targets at this ambition level are consistent with limiting warming to 1.5°C.

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Table 3. Renewable electricity procurement thresholds for 1.5°C

Metric measured 2025 2026 2027 2028 2029 2030

Renewable electricity
procurement share
(% of total scope 2 80% 84% 88% 92% 96% 100%
electricity that is
renewable)

3.1.7 Engagement targets

Please see Table 1 for further information. Engagement targets currently cannot be temperature
classified.

3.2 Forward-looking ambition for scope 1 and 2 targets

The minimum forward looking ambition (FLA) of near-term scope 1 and/or scope 2 targets must be
consistent with reaching net-zero by 2050, assuming a linear absolute reduction, linear intensity
reduction, or intensity convergence between the most recent year and 2050 (not increasing absolute
emissions or intensity). This is meant to reward early action, while ensuring that targets drive continued
mitigation during a company’s transition to net-zero, consistent with the Net-Zero Standard. Once
companies reduce emissions by the amount needed to achieve a long-term SBT based on the Net-Zero
Standard (e.g., 90% absolute reduction), “maintenance” targets that do not require further emissions
reductions are eligible under this criterion.

For companies using the most recent year as a base year, this section is not relevant and does
not affect minimum target ambition. For companies using an earlier base year, the SBTi Tool must
be used to calculate the minimum ambition of near-term scope 1 and/or scope 2 targets including
FLA.

Details on how FLA is calculated for cross-sector absolute reduction, sector-specific absolute reduction
and sector-specific intensity convergence are explained in Sections 3.2.1 and 3.2.2 below.

3.2.1. Cross-sector and sector-specific absolute targets

Using these methods, the FLA of near-term scope 1 and/or scope 2 targets needs to be consistent with
reaching net-zero by 2050, assuming a linear absolute reduction between the most recent year and 2050
(not increasing absolute emissions). This results in an “FLA adjustment,” which prevents companies from
setting targets that have already been achieved but still rewards companies for early action by allowing

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them to count past emissions reductions toward achieving near-term SBTs. The closer a company gets
to reducing emissions 90% from the base year, the less they need to reduce forward-looking emissions
for an eligible near-term SBT. The exact size of the FLA adjustment depends on the base year, most
recent year, target year, and the size of past emissions reductions, as described by the following formula.

Where:
RTD = Percentage reduction (%) to date expressed as the reduction between base year and most
recent year.
NZA = Percentage reduction (%) required for reaching net zero in 2050 from the chosen target base
year (90%).
A0 = Minimum target ambition (%) based on the cross-sector absolute reduction or sector-specific
absolute reduction before FLA adjustment.

3.2.2 Sector-specific intensity convergence

Using this method, the FLA of near-term scope 1 and/or scope 2 targets needs to be consistent with
reaching net-zero by 2050, assuming a linear intensity reduction or intensity convergence between the
most recent year and 2050. There are two options for ensuring that FLA meets SBTi criteria:

Option 1. The emissions intensity reduction between the most recent year and the target year
meets or exceeds a linear intensity reduction rate between the most recent year and 2050.

Similar to the FLA adjustment using cross-sector absolute reduction, this can be expressed using an
“FLA adjustment,” as described by the following formula:

Where:
RTD = Percentage reduction (%) to date expressed as the reduction between base year and most
recent year.

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 NZA = Percentage reduction (%) required for reaching the sector’s emissions intensity in 2050 from
the chosen target base year (depends on sector and base year intensity).
A0 = Minimum target ambition (%) based on the sector-specific intensity method before FLA
adjustment.

Option 2. The emissions intensity reduction between the most recent year and target year is
consistent with intensity convergence between the most recent year and 2050.

In other words, the target needs to be consistent with the ambition required from the sector-specific
intensity method using most recent year data. In some cases, this will require a larger reduction than
calculated by the sector-specific intensity convergence using base year data.

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4. SBTi requirements and best practice in GHG accounting
This section details nuances in GHG accounting that SBTi requires and recommends as best practice for certain sectors and/or topics.

Table 4. Overview of SBTi requirements and best practice in GHG accounting

Topic Guidance

According to the GHG Protocol Corporate (Scope 3) Standard, “In certain cases, the
eventual end use of sold intermediate products may be unknown. For example, a company
may produce an intermediate product with many potential downstream applications, each
of which has a different GHG emissions profile, and be unable to reasonably estimate the
downstream emissions associated with the various end uses of the intermediate product.
In such a case, companies may disclose and justify the exclusion of downstream
emissions from categories 10, 11, and 12 in the report (but should not selectively exclude
a subset of those categories).”
Accounting for downstream emissions from intermediate products
The passage from GHG Protocol is relevant for intermediate products such as chemicals
where the end product is varied and unknown. Emissions from other intermediate products
such as computer microchips, automotive parts, etc. do have specific applications at the
end of their life and downstream emissions must be accounted for.

Wherever possible, companies shall try to account for the downstream emissions of
intermediate products and if there are certain exclusions of downstream emissions in
scope 3 category 10, 11 and 12 related to intermediate products, companies must provide
a robust exclusion justification.
Accounting for emissions from transport-related fuels, general fuel use
For any transport-related emissions from fuel use, emissions must be reported on a well-
and purchased electricity
to-wheel (WTW) emissions boundary (well-to-wake for aviation and maritime transport)

45
 that reflects direct use emissions from fuel combustion (tank-to-wheel, TTW) and
upstream emissions related to fuel production and distribution (well-to-tank, WTT).

For purchased fuels, fuel related emissions must be accounted for on a WTW basis i.e.,
TTW emissions which are equivalent to scope 1 emissions and WTT emissions reported
in scope 3 category 3 “fuel-and-energy-related activities”. Furthermore, the upstream
emissions of purchased electricity (WTT emissions) must be accounted for in scope 3
category 3 “fuel- and energy-related activities” if not accounted for in scope 1 and/or 2.
For more information, consult Table 5.4 (page 34) of the Corporate Value Chain (Scope
3) Accounting and Reporting Standard.
Companies must define the geographical boundary of the relevant ports in which they
operate and disclose their chosen boundary. Ships sitting in port must account for the
Emission allocation from ports emissions related to port usage. If a shipping company is a customer of a port i.e., they
pay the port for use of facilities, these emissions are deemed to be direct use-phase
emissions (scope 3 category 11).
If a company sells a company asset, this is classified as a structural change according to
the GHG Protocol Corporate Standard and shall trigger a recalculation of a company’s
base year emissions. Emissions are simply transferred from one company to another
without any change of emissions released to the atmosphere.
Retiring versus selling assets within a company
Alternatively, if a company retires a company asset (removes an asset or part of an asset
from the asset portfolio without revenue generation), a company can consider this to be
an emissions reduction within their organizational boundary.
There are multiple definitions for the term “insetting” (also referred to as supply chain
interventions) and no standardization of the term, which makes it difficult to give a clear
determination of what can and can’t be included within scope 3 reductions. Insetting is
used to describe interventions that are wholly contained within a scope 3 value chain
Insetting
boundary of a company or interventions partially within their scope 3 supply chain
boundary (spanning their supply chain and other companies’ supply chains). Accounting
approaches for insetting also vary with the use of both project accounting and corporate
accounting.

46
 As this issue has not been settled to date in the GHG Protocol process, the SBTi
recommends a conservative approach at this time. Companies should only include
emission reductions or removals (removals only in the case of FLAG targets) from
“insetting” projects that use a corporate accounting approach and are wholly contained
within their supply chains or the portion of a “partially-included” project that is within their
supply chain and linked directly to sourcing. For further information, please see this
resource.

Further work is ongoing to standardize the definition of insetting/supply chain interventions

and clear accounting methodologies. For these reasons, the SBTi will assess insetting on
a case-by-case basis during the validation process and may not approve their use.
The SBTi currently recommends that companies follow the guidance within the GHG
Protocol and Corporate Standard on the use of green gas. Currently, the GHG Protocol
does not allow the use of green gas certificates to reduce scope 1 emissions. However,
Green gas/biogas
this topic is being discussed as part of the current GHG Protocol land sector and bioenergy
guidance development process. As such, the SBTi cannot guarantee that these
certificates would be a valid approach to meeting your science-based target.
Emissions from production and waste of non-rechargeable batteries must be accounted
i.e., production emissions accounted for in scope 3 category 1 “purchased goods and
Accounting for emissions from non-rechargeable batteries services”, waste in operations accounted for in scope 3 category 5 “waste” and emissions
from the end use of batteries accounted for in scope 3 category 12 “end-of-life treatment
of sold products”.
Companies may use Renewable Energy Certificates (RECs) as a measure to reduce
scope 2 market-based emissions. However, the RECs need to be purchased and used
within the same market, and cannot be used as a reduction mechanism for markets that
Renewable Energy Certificates (RECS)
the certificates were not purchased from. For more information please consult the RE100
Technical Criteria and the Scope 2 Quality Criteria in the GHG Protocol’s Scope 2
Guidance.
The SBTi continues to follow Greenhouse Gas Protocol guidance, which has no
Market-based scope 3 accounting
framework for market-based scope 3 accounting. Therefore, the SBTi does not permit

47
 market-based accounting in scope 3, including the purchase of market-based renewable
electricity instruments on behalf of the reporting company's suppliers, customers, lessors,
lessees, franchisees, or investments.
Companies may request to include targets to reduce optional scope 3 emissions in the
target language. For companies that wish to include a supplemental/optional target on
optional scope 3 emissions, the below needs to be followed:
● The optional scope 3 target will be assessed separately by the SBTi review team
compared to the mandatory scope 3 target(s).
● The reduction plans for the target(s) covering optional scope 3 emissions is
credible, ambitious and practical.
● Should the target be approved, the target language covering the optional scope 3
Mandatory versus optional scope 3 targets
target should be separated in a standalone sentence from the rest of the target
language.
● In the GHG inventory submitted to the SBTi, the mandatory scope 3 emissions
representative of the minimum boundary shall be included in the inventory table.

For a definition of optional emissions for each scope 3 category, please see Table 5.4 on
page 34 and section 5.5 “Descriptions of scope 3 categories” of the Corporate Value Chain
(Scope 3) Accounting and Reporting Standard.
In scope 3 category 11 “use of sold products”, direct use-phase emissions are required to
be reported, whereas the reporting of indirect use-phase emissions are optional. Please
refer to the GHG Scope 3 Standard for a definition of direct and indirect use-phase
emissions.

Direct use-phase emissions versus indirect use-phase emissions The direct use-phase emissions of final products shall be calculated based upon the
lifetime consumption of the product(s). The allocation methodology shall be disclosed for
the direct use-phase of components, except for car engines wherein 100% of the direct
use-phase emissions of the car/vehicle shall be reported. Furthermore, the calculation
methodology shall be disclosed for indirect use-phase emissions.

48
 Table 5 lists illustrative examples of what should be allocated as direct use-phase
emissions versus indirect use phase emissions in scope 3 category 11 “use of sold
products”. This table is not exhaustive of the examples of direct and indirect use-phase
emissions.

Table 5. Direct and indirect use phase emissions accounted for under scope 3 category 11

Sector Direct use-phase emissions Indirect use-phase emissions Notes

● Engines. ● Tyres.
● Headlights. ● Bumpers.
Automobiles and components
● Air conditioning system. ● Seatbelts.
● Heaters.

Apparel
● Washing and drying of
clothes.

● Architecture, engineering and design

companies must allocate the
Architecture, engineering and design
emissions from the use of building
companies
projects that have been constructed
as direct use-phase emissions.

● Fuels and feedstocks. ● Rechargeable batteries ● First charge of the

● Rechargeable batteries (energy loss). (energy stored and rechargeable battery
● Chargers. transmitted). before sale must be
Energy and Electric Utilities allocated to scope 2 of
● Electricity transmission and
the producers.
distribution equipment (transmission
loss and no-load consumption).

49
 ● Sold piping systems (lost heat and
cooling).
● Power step-up and- down
transformers.
● Other power system equipment (lost
electricity, heat and cooling).

● Displays. ● Computer housing.

● Microchips. ● Camera lenses.
Electronics
● Memory drives.
● Cameras.

● Cooling of ice for ● The cooling or heating of

beverages. products in retail, hotels,
● Frying/microwaving/coo restaurants, pharmacies
king of frozen meals or or hospitals must be
any other food item. allocated to scope 3
Food and beverage ● Use of household food category 9 “downstream
waste disposer (for food transportation and
producers). distribution”.
● Direct cooling or heating
of products in homes of
consumers.

● Large and small household ● Smart-home software

appliances, from washing machines use i.e., the use of
Household appliances to electric toothbrushes. computers, smartphone,
● Lightbulbs. and/or router energy
● Smart-home products.

50
 ● Charcoal and lighter fluid for consumption due to the
barbecues. use of the software.

● Software i.e., the energy ● The energy consumption

consumption of of the servers that run
computers or other cloud-based software
electronic device due to must be allocated to
Software and telecommunication the use of software). scope 3 category 1
services ● Telecommunication “purchased goods and
contracts i.e., the energy services” of the software
consumption of cell provider.
phones due to the use
of the network.

● If a shipping company is a customer ● Maintenance of

of a port i.e., they pay the port for use transport infrastructure
Transport and logistics of facilities, these emissions are e.g., roads, bridges,
deemed to be direct use-phase airports etc.
emissions of a port.

● Emissions from the use of client

facilities for the provision of services
On-premises services (e.g., cooking in client kitchens;
cleaning equipment that uses client
electricity).

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5. Sector-specific requirements
Sector-specific guidance and methods are currently available for many sectors. All new, sector-specific
guidance that becomes available will be uploaded to the sector guidance page on the SBTi website. The
SBTi has sector-specific requirements related to the use of target-setting methodologies and minimum
ambition levels for near-term target setting. The eligible methods set out in Table 6 below concentrate on
scope 1 and 2 near-term targets, unless otherwise specified.

Table 6. Sector-specific requirements for near-term targets

Sector Eligible methods Guidance and further notes

When setting SBTs, companies can Guidance is being developed for the
Aluminium set targets using the cross-sector aluminium sector and is currently in the
pathway (absolute targets only). scoping phase.
When setting SBTs, companies can Optional guidance is available for
Apparel and footwear set targets using the cross-sector companies in the apparel and footwear
pathway (absolute targets only). sector.
For all transport-related emissions across
all sectors, companies shall report these
emissions on a well-to-wheel (WTW) basis
in their GHG inventory (well-to-wake for
When setting SBTs, companies
aviation). For aviation this is the sum of
providing air transport services can
both scope 1 emissions from jet fuel
set targets using the physical
combustion and scope 3 category 3 “fuel-
intensity convergence method using
and energy-related activities” emissions
the pathways available in the SBTi
from upstream production and distribution
Aviation tool. The target boundary
Aviation of jet fuel.
must cover well-to-wake emissions
Aviation target formulation and
(WTW), as specified in the SBTi
communication must explicitly state that
Aviation Guidance. Alternatively,
targets are exclusive of non-CO₂ factors.
when setting SBTs, companies can
Targets must include a footnote stating
set targets using the cross-sector
that non-CO₂ factors which may also
pathway (absolute targets).
contribute to aviation-induced warming are
not included in this target and whether the
company has publicly reported or commits
to publicly report its non-CO2 impacts.
When setting SBTs, companies in
Real Estate Investment Trusts (REITs)
these sectors are recommended to
wishing to set targets must specify if they
set absolute targets or intensity
are a mortgage-based or equity-based
Buildings targets using the residential buildings
REIT. Equity REITs must pursue the
pathway, service buildings pathway,
regular target validation route for
or cross-sector pathway (absolute
companies. Mortgage REITs must instead
targets only).

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 utilize the Financial Institutions guidance
Please note scope 3 must include for setting SBTs.
emissions from use of sold products
for architecture/design firms. The SBTi is developing guidance for
companies operating in the built
environment.
When setting SBTs, companies are
recommended to set absolute or The SBTi has released guidance to aid
Cement intensity targets using the cement companies in the cement industry in
pathway, or cross-sector pathway setting science-based targets.
(absolute targets only).
The SBTi is developing guidance for
companies in the chemicals sector.

Companies that produce or sell fluoro-

When setting SBTs, companies can gases (or products that use HFCs) must
Chemical set targets using the cross-sector account for and report emissions during
pathway (absolute targets only). the use of these gases in cooling
units/refrigerants or in industrial
applications in their GHG inventory under
scope 3 category 11 “use of sold
products”.
Sufficient ambition if in line with the
cross-sector pathway (absolute
The SBTi guidance for financial institutions
targets only) or relevant SDA
outlines in detail the target setting
pathways (e.g., Services/
requirements for setting both scope 1+2
Commercial buildings).
and scope 3 targets for investment and
Financial Institutions
lending activities.
Sector-specific criteria and methods
are available for financial institutions
The SBTi also has separate guidance
to align their investments and
developed for private equity firms.
lending with Paris-aligned climate
stabilization pathways.
Companies with significant FLAG The following companies are required to
emissions are required to set targets set FLAG targets:
(see criteria in the next table column). 1) Companies with FLAG emissions that
These are separate from their SBTs total 20% or more of overall emissions
that cover all non-FLAG emissions. across scopes.
Forest, Land and FLAG targets must use the FLAG- 2) Companies in the following sectors:
Agriculture (FLAG) sector pathway (absolute targets) or • Forest and Paper Products–
a commodity pathway (intensity Forestry, Timber, Pulp and Paper,
targets). Rubber.
• Food Production– Agricultural
Commodity pathways are available Production.
for 11 commodities: beef, chicken, • Food Production– Animal Source.

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 dairy, leather, maize, palm oil, pork, • Food and Beverage Processing.
rice, soy, wheat, and timber and • Food and Staples Retailing.
wood fiber. Companies in the forest • Tobacco.
products sector are required to use
the commodity pathway for timber Please see the FLAG Guidance.
and wood fiber.

The FLAG target must cover at least

95% of FLAG-related scope 1 and 2
emissions. The FLAG target must
cover at least 67% of FLAG-related
scope 3 emissions. Please see the
FLAG Guidance for further guidance
and criteria.
Fossil Fuel
Sale/Transmission/ Targets must be set for scope 3 category
Distribution* 11, irrespective of the share of these
In addition to following the guidance
emissions compared to the total scope 1,
for the primary sector, companies
*This information is only 2 and 3 emissions of the company.
must set targets for scope 3 category
applicable to companies Separate scope 3 targets may need to be
11 “use of sold products” using
that receive less than set in this case. Companies with more
absolute reduction aligned with at
50% of their revenue than 50% of their revenue from fossil fuel
least 1.5°C ambition thresholds.
from fossil fuel sale, sale, transmission, or distribution cannot
transmission, or officially validate targets at this stage.
distribution.
The SBTi guidance for ICT companies
When setting SBTs, companies in including mobile networks operators, fixed
Information and
these sectors must use the cross- networks operators and data centres
communication
sector pathway (absolute targets operators outlines in detail the target
technology providers
only). setting requirements for setting scope 1
and 2 targets.
When setting near-term SBTs,
companies in these sectors can set
targets using the cross-sector
pathway (absolute targets only).
The SBTi is developing guidance for
Iron and Steel When setting long-term SBTs,
companies in the steel sector.
companies in these sectors can set
targets using the cross-sector
pathway (absolute reduction targets)
or using the long-term sector intensity
pathway (intensity targets).
Companies in Maritime Transport On the transport sector page, you can find
Maritime Transport must use the sector-specific the Maritime Transport Guidance and the
pathway. Maritime Transport Target Setting Tool.

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 Near-term targets can be no earlier Please note that companies using this
than 2030. guidance to set near-term science-based
targets covering scope 3 emissions from
All companies setting near-term subcontracted maritime transport
science-based targets covering operations (e.g., cargo owners or
emissions from own operations (e.g., shippers) are not required to submit long-
vessel owners or operators) shall term science-based targets.
also submit long-term science-based
targets along with their near-term For all transport-related emissions across
target submission. For maritime all sectors, companies shall report these
transport emissions, a long-term emissions on a well-to-Wheel (WTW)
science-based target means basis in their GHG inventory (well-to-wake
reducing emissions to a residual level for aviation and maritime transport).
in line with 1.5°C scenarios by no
later than 2040.
Companies in this sector include - but are
not limited to - integrated oil and gas
companies, integrated gascompanies,
exploration and production pure players,
refining and marketing pure players, oil
products distributors, gas distributors and
retailers and traditional oil and gas service
companies. Please see the Oil and Gas
sector webpage for more information.
The SBTi is developing a new
The SBTi will assess companies on a
methodology for companies in the oil
case-by-case basis to determine sector
and gas sector to set science-based
classification for SBTi validation purposes.
targets. Currently, the SBTi is unable
Therefore, the SBTi reserves the right to
to accept commitments or validate
Oil and gas not move forward with a company’s
targets for companies in the oil and
validation, until methods/guidance have
gas or fossil fuels sectors. Please
been developed/completed.
see our policy for further information
and those that are excluded from
About fossil fuel service companies:
this.
Service companies are defined as
companies that support exploration,
extraction, mining or production of fossil
fuels, and other significant activities along
the fossil fuels value chain, not covered by
sale, transportation or distribution
category.

The expectation is that such companies

need to account for the indirect emissions

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 related to the fossil fuels directly or
indirectly managed by the company.

Given the limitation of accounting

standards and target setting methods for
these sectors, the SBTi reserves the right
to not move forward with a company’s
validation. The SBTi expects that the oil
and gas sector guidance will help inform
the rules for these.

About fossil fuel assets:

Companies that have dormant or active
fossil fuel assets (e.g., coal mine, lignite
mine, etc.) for extraction activities with
commercial purposes (meaning sales),
cannot officially validate targets at this
stage, until further specific methods and
guidance.

The SBTi recommends companies to

decommission fossil fuel assets, instead of
divesting, as this approach better reflects
the need to phase-out fossil fuels in our
global economy, as science indicates is
necessary.

If a company completely
decommissions/divests from fossil fuel
assets, they will no longer be considered
under these rules, and can submit targets
as per standard route. The SBTi
recommends companies to follow the
GHG Protocol for base year
recalculations.
Please see the Power/Electric utilities
The intensity convergence method
Guidance .
must be used by power generation
companies, as specified in the
As explained in the guidance for electric
Guidance for Electric Utilities. For
utilities, power generation companies are
Power Generation power sector companies, long-term
expected to set at least two targets. The
science-based targets must reduce
first is a scope 1 target over all electricity
emissions to a residual level in line
generation modelled using the 1.5°C
with 1.5°C scenarios by no later than
aligned power SDA that is expressed in
2040 using the Sectoral
terms of MWh energy generated. The

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 Decarbonization second is an all sold electricity target
Approach. covering the portion of scope 1 and direct
biogenic CO2 and scope 3 category 3
emissions associated with all sold
electricity. This target must also be
modelled using the 1.5°C aligned power
SDA and expressed in intensity terms.

For power generation companies that

distribute and sell fossil fuels, a third target
must be set covering 100% of emissions
from downstream use of fossil fuels. This
should be an absolute target that aligns
with a 1.5°C mitigation pathway. In order
to meet the 67% scope 3 coverage
threshold, power companies may need to
set a target over other scope 3 categories
as well.
When setting SBTs, companies can Guidance is being developed for the pulp
Pulp and Paper set targets using the cross-sector and paper sector and is currently in the
pathway (absolute targets only). scoping phase.
Target setting guidance will be updated
along with sector trajectory but you can
view the transport sector guidance here.
When setting SBTs, companies can
Road and rail set targets using the cross-sector For all transport-related emissions across
pathway (absolute targets only). all sectors, companies shall report these
emissions on a well-to-wheel (WTW) basis
in their GHG inventory (well-to-wake for
aviation and maritime transport).
The SBTi is temporarily pausing
near- and long-term target validations
This applies to automakers.
and target updates for automakers
Transport until 1.5°C scope 3 targets for use-
Auto part manufacturers can still set
OEMs/Automakers phase emissions from new road
targets using the cross-sector absolute
vehicles are developed and
reduction.
approved. Please see our policy for
further information.

6. Target classification definition

Target classification describes the ambition of a company’s emissions reduction target, relative to a long-
term temperature goal. This classification, however, does not imply that a company’s overall ambition
and business strategy are aligned with a temperature goal, as SBTi does not conduct comprehensive

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assessments of companies’ business models or strategies, and the current classification does not extend
to scope 3, i.e., does not cover its full GHG inventory.

Submitted targets must meet all relevant qualitative and quantitative SBTi Criteria for Near-term Targets
before being classified against a long-term temperature goal. Targets covering each scope are assessed
to ensure compliance with the SBTi Criteria for Near-term Targets, while only targets covering scope 1
and/or scope 2 emissions are currently assessed to determine alignment with long-term temperature
goals based on the thresholds described in Section 3. Figure 1 outlines how the target classification
procedure fits into the overall validation process. For all non-power generation and non-maritime
companies setting targets using the sector-specific intensity convergence approach, the ambition is
assessed using both the sector-specific intensity convergence and cross-sector absolute reduction
requirements, with the more ambitious classification being used to classify the company.

Figure 1. Target classification procedure

Table 7 presents the ambition ranges used to classify scope 1 and/or scope 2 targets against the three
long-term temperature goals.

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Table 7. Ambition ranges for target classification

Long-term temperature Ambition range Ambition range

goal (global emissions pathway) (sector emissions pathway)
If base year on or before 2020
X ≥ 4.2 %
1.5°C
annual linear reduction rate over the
target period
Approx. 50% chance of
X ≥ SDA1.5DS pathway for power generation
limiting peak warming
If base year after 2020 and maritime transport sectors
between present and 2100
X ≥ 4.2 %
to below 1.5°C
annual linear reduction rate from a
2020 start year

6.1 Target classification rules

Targets are classified based on the target type and scope coverage. Table 8 summarizes the
classification rules for a range of targets and scope combinations.

Table 8. Classification rules for target formulations

Target formulations Classification description

Absolute or intensity scope 1
and 2 combined targets
These targets are classified using the cross-sector absolute reduction thresholds
modelled using the cross-
(column 2 in Table 7 above).
sector absolute reduction
approach
Scope 1 and 2 intensity targets modelled using the sector-specific intensity
Scope 1 and 2 combined
convergence approach are compared and classified against the 1.5°C Scenario
intensity targets modelled
in the Science-based Target-setting Tool and/or the SDA Transport tool. If the
using the sector-specific
absolute reduction of emissions results in a higher ambition classification under
intensity convergence
the cross-sector absolute reduction approach, then the higher of the
approach
classifications is used to classify the target.
If single scope 1 or scope 2 targets are submitted in addition to combined scope
1 and 2, the classification is based on the combined scope 1 and 2 target.
Single scope targets
If single scope 1 or scope 2 targets are submitted, the classification is based on
the reduction of scope 1 and 2 emissions combined.
If renewable electricity targets are additional to absolute/intensity scope 1 and 2
targets the classification is based on the scope 1 and 2 targets and not the
Renewable electricity targets renewable electricity target.
Renewable electricity targets that are in line with our current thresholds are
1.5°C aligned.

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 If a single scope 1 target and a renewable electricity target are set, the resulting
classification will be based on an emissions weighted average reduction across
the scopes. Renewable electricity procurement targets will be converted to
Single scope + renewable
absolute reductions based on the assumption that the procured renewable
electricity targets
electricity has zero GHG emissions associated with its use. Heating, steam and
cooling-related emissions not covered by renewable electricity targets will be
considered separately when the aggregate scope 2 target ambition is calculated.
If multiple near-term scope 1 and 2 targets are submitted, the classification is
based on the target with the furthest target year. E.g., if a company has two
Multiple near-term targets
scope 1 and 2 targets with target years of 2025 and 2030, then temperature
alignment is based on the 2030 target.
Companies must provide the breakdown ambition for combined scope targets
Combined scope targets (scopes 1+2+3), i.e., the ambition of the scope 1+2 portion and the ambition of
(scopes 1+2+3) the scope 3 portion of the target. The classification of the company is then based
only on the scope 1+2 ambition.
Companies are welcome to set scope 3 targets that exceed minimum ambition
Scope 3 targets or to update the level of ambition of scope 3 targets. However, the SBTi is
currently not temperature classifying scope 3 targets.

Target classifications only consider the timeframe ambition (i.e., ambition from the base year to the target
year). This means forward looking ambition (i.e., ambition from the most recent year of data to 2050) is
not used to determine target classifications. The SBTi assesses the temperature alignment of a target
using the timeframe ambition to best reflect a company’s long-term ambition and target trajectory.

7. Target wording requirements

The SBTi has specific guidance for target wording to increase comparability and transparency among
approved targets. Companies are required to follow specific guidelines for target wording and the SBTi
reserves the right to not approve targets that deviate from this guidance. What may appear to be minor
nuances may significantly alter the target’s intention. Table 9 provides recommended target template
wording for each type of target. Please see the SBTi’s target submission form to see the latest
recommendations for the target language.

Table 9. Recommended target language templates

Target type Recommended target language

[Company name] commits to reduce absolute [enter scopes] GHG
Absolute targets emissions [percent reduction] % by [target year] from a [base year]
base year.
[Company name] commits to reduce [enter scopes] GHG emissions
Intensity targets [percent reduction] % per [unit] by [target year] from a [base year]
base year.

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 [Company name] commits that [percent]% of its suppliers/customers
Supplier and customer engagement
[by spend/ revenue/ emissions] covering [name scope 3 categories],
targets
will have science-based targets by [target year].
For companies who have not yet achieved 100% renewable electricity:
[Company name] commits to increase annual sourcing of renewable
electricity from [percent]% in [base year] to [percent]% by [target year].
OR
Renewable electricity procurement For companies already sourcing 100% renewable electricity:
targets [Company name] commits to continue annually sourcing 100%
renewable electricity through [target year].

The wording must specify a target year up to 2030 for renewable

electricity procurement targets.
The SBTi recommends that for combined scope 1, 2 and 3 targets
when the scope 1+2 and scope 3 ambition differs, not only the
combined scope 1+2+3 target is published, but also the disaggregate
scope 1+2 and scope 3 target language for transparency.

Combined scope 1, 2 and 3 targets For example, [Company name] commits to reduce absolute scope 1,2
and 3 GHG emissions [percent reduction] % by [target year] from a
[base year] base year. Within this target, [Company name] commits to
reduce absolute scope 1 and 2 GHG [percent reduction] % by [target
year] from a [base year] base year and reduce absolute scope 3 GHG
[percent reduction] % by [target year] from a [base year] base year.
It is best practice for the target language to refer to specific scope 3
categories covered, e.g., purchased goods and services, or use of
Scope 3 targets category coverage
sold products. However, the target must not refer to specific activities
e.g., purchasing of building materials.
If a company has the same base year and target year for scope 1 and
2 and scope 3, it is preferable to not repeat the specific years for the
Base year and target year are the
scope 3 language. Instead, companies should use the language
same
“within the same timeframe” for the scope 3 target year portion of the
target language.
If a company chooses to use a financial year, a financial year must be
used for both the base year and target year.

Financial years Fiscal years shall follow the date range that a company uses for
reporting purposes. The date range for fiscal years must be disclosed
with the target language displayed on the SBTi website for
transparency.
Companies may express their company-wide GHG emission reduction
Targets sets on different business targets separately according to their different business streams,
streams activities or units.

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 For example, Company A commits to reduce absolute scope 1 and 2
GHG emissions from non-revenue activities [insert target reduction
percentage] % by [insert target year] from a [insert base year].
Company A also commits to reduce scope 1 and 2 GHG emissions
from revenue activities [insert target reduction percentage] % per
revenue passenger kilometer traveled by [insert target year] from a
[insert base year] base year.
In the target language, the target on either the direct or indirect-use
phase emissions needs to be separated from the rest of the target
language. For example, Company A commits to reduce absolute
scope 3 GHG emissions from purchased goods and service [insert
Optional indirect use-phase emissions
target reduction percentage] % by [insert target year] from a [insert
base year]. Company A also commits to reduce indirect use phase
emissions [insert target reduction percentage] % by [insert target year]
from a [insert base year].
For clarity and transparency, percentage emissions reductions shall be
General
expressed up to two decimal points.
If a company is using bioenergy, the following footnote is required to
be included in target language:
Use of bioenergy
“*The target boundary includes land-related emissions and removals
from bioenergy feedstocks."

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