Science-Based Targets: Why They Matter for Your Business

Science-based targets give companies a clear, credible answer to a simple question: how much do we need to cut our emissions, and by when? Instead of picking a round number, a company sets goals that match what climate science says is needed to limit global warming.

That clarity matters more every year. Customers ask suppliers for targets, investors compare them, and regulators expect a solid emissions inventory behind them. As a result, science-based targets have become a baseline for climate strategy, not a badge for a few leaders. By the end of 2025, 9,764 companies worldwide had validated targets, including 943 in the United States.

What are science-based targets?

A target is science-based when it follows the pace of decarbonization that climate science says the world needs to meet the Paris Agreement goals. The agreement aims to keep warming well below 2°C above pre-industrial levels. It also pursues efforts to limit that increase to 1.5°C.

In practice, companies set two kinds of targets:

• Near-term targets. These cover a five-year cycle and set a measurable reduction for Scopes 1 and 2 and, for larger companies, Scope 3.
• Long-term targets. These extend to 2050 at the latest. Optionally, a company can also set a net-zero target, with residual emissions at 10% or less of the total in its net-zero year.

The role of the SBTi

The Science Based Targets initiative (SBTi) sets the standard most companies use. It develops the methods, validates corporate targets independently, and publishes the validated ones. Thanks to that review, a company can call its targets science-based without the claim looking like self-assessment. In other words, the SBTi turns a commitment into something third parties can check.

How the SBTi Corporate Net-Zero Standard V2.0 works

The SBTi published V2.0 of its Corporate Net-Zero Standard on June 11, 2026. It merges the earlier near-term criteria and net-zero standard into a single framework. More importantly, it shifts the focus from setting ambitious targets to proving that companies deliver them.

Timeline

Companies can still submit targets under the current criteria (Near-Term Criteria V5.3 and Net-Zero Standard V1.3.1) until January 31, 2028. Meanwhile, validation under V2.0 is expected to open in February 2027. After January 2028, every new submission must follow V2.0.

Two company categories

• Category A covers all large companies, plus medium-sized companies in high-income countries such as the U.S. These companies face the full set of requirements.
• Category B covers small companies everywhere and medium-sized companies in lower-income countries. For them, several requirements, such as Scope 3 targets and third-party assurance, are optional.

What each target must cover

• Scope 1: 100% of direct emissions, through an absolute, intensity, or asset transition approach.
• Scope 2: 100% of purchased energy. Companies can cut emissions, raise their share of low-carbon electricity, or both. That electricity must meet a deliverability test, generally through geographic matching.
• Scope 3: For Category A, a target for every category that makes up at least 5% of Scope 3 emissions.

New obligations

• Board approval. The company’s highest governance body must approve the targets and oversee their implementation.
• Transition plan. Every company must develop and maintain a plan that explains how it will meet its targets. In addition, Category A companies must publish it.
• Assurance and progress checks. Category A companies need independent third-party assurance of their progress data. At the end of each five-year cycle, every company completes an end-of-cycle assessment.
• Carbon credits and removals. Credits don’t count toward reduction targets. From 2035, however, Category A companies must support carbon removals equal to at least 1% of their emissions, a share that grows toward their net-zero year.

Why science-based targets matter for your business

They protect your credibility

Vague pledges like “carbon neutral by 2040” now draw scrutiny from investors, regulators, and the media. A validated target, by contrast, rests on a public method and an independent review. Therefore, it gives stakeholders a reason to trust the claim.

Large customers ask for them

Major buyers increasingly push climate requirements down their supply chains. For example, Walmart’s Project Gigaton asked suppliers to avoid or cut one billion metric tons of emissions by 2030. In 2024, Walmart announced that suppliers had reported reaching that goal six years early. Similarly, many large companies now track the share of their suppliers that have science-based targets of their own. As a result, a supplier without a target can lose ground in procurement.

Investors and lenders use them

CDP’s scoring gives weight to validated targets, and many institutional investors screen for them. In addition, sustainability-linked loans often tie their pricing to emissions targets. A science-based target makes those terms easier to negotiate and defend.

They prepare you for regulation

In the U.S., no federal rule requires climate targets. However, California’s SB 253 already requires large companies to report Scope 1 and 2 emissions, with Scope 3 to follow in 2027. Outside the U.S., the EU’s CSRD and the ISSB’s IFRS S2 ask companies to disclose their climate targets and how they set them. A science-based target, built on a solid inventory, puts a company ahead of these requirements.

They cut costs and drive innovation

Many of the measures that deliver a target, such as energy efficiency, also lower operating costs. Moreover, a clear target pushes companies to rethink processes, products, and energy sourcing. That exercise often reveals new business opportunities in a low-carbon economy.

How to set science-based targets, step by step

1. Build a complete GHG inventory

Everything starts with a solid emissions inventory that follows the GHG Protocol. It must cover Scopes 1 and 2 and, for most companies, a Scope 3 screening that finds the material categories. Under V2.0, Category A companies also need assurance of their base-year data.

2. Choose the base year and boundary

Next, pick a recent, representative base year with reliable data. Then confirm the organizational boundary, typically operational or financial control. Later structural changes, such as an acquisition, may require a base-year recalculation.

3. Model the targets

With the inventory in hand, the company uses SBTi methods and tools to calculate the reductions each scope requires. At this stage, it also chooses its approach: absolute, intensity, or, for Scope 3, supplier alignment.

4. Get board approval

Before submission, the board or highest governance body must approve the targets. This step also assigns who will oversee implementation.

5. Submit for validation

The company then submits its targets to the SBTi, which reviews them against its criteria and charges a validation fee. Once it validates them, the SBTi publishes the targets on its website.

6. Turn targets into a plan

A target without a plan stays on paper. That’s why the next step is a decarbonization roadmap with a marginal abatement cost curve (MACC). After that, a transition plan links the targets to actual investment decisions.

7. Report progress every year

Finally, the company reports progress annually and, under V2.0, completes an end-of-cycle assessment. Category A companies also need third-party assurance of that progress.

Common mistakes to avoid

Counting on carbon offsets

Under SBTi rules, carbon credits don’t count toward reduction targets. Instead, a company must cut its own emissions and use removals only for what remains at net zero.

Leaving out Scope 3

For Category A companies, Scope 3 targets are mandatory for every category above 5% of Scope 3 emissions. Besides, in most sectors, Scope 3 holds the largest reduction opportunities.

Setting a target without a roadmap

Validation confirms ambition, not delivery. Without a roadmap and a budget, a company will likely fall short at its end-of-cycle assessment.

Waiting for the perfect inventory

Data rarely feels complete. Still, the SBTi accepts documented estimates, especially for Scope 3. So companies can start now and improve their data over time.

How Vim Aeris helps

Vim Aeris has worked on GHG accounting since 2010. For U.S. companies, it builds the inventory, models the targets, and prepares the SBTi submission. Then it turns those targets into a decarbonization roadmap and a transition plan. As a result, the company gets one coherent process instead of disconnected documents.

Frequently asked questions

Are science-based targets mandatory? No, SBTi validation is voluntary. However, customers, investors, and CDP increasingly expect it. For many companies, it already works as a market requirement.

How long does it take to set science-based targets? It depends mostly on data readiness. A company with a reliable inventory can usually prepare its submission in a few months. After that, the SBTi review adds its own timeline.

Can small companies set science-based targets? Yes. Under V2.0, small companies fall into Category B, which has a lighter set of requirements. For instance, Scope 3 targets and third-party assurance are optional.

Do we need a net-zero target? No. Under V2.0, a public net-zero commitment is optional. The core requirement is near-term targets for Scopes 1 and 2, plus Scope 3 for Category A.

What happens if we miss a target? At the end of each cycle, the company reports its results in an end-of-cycle assessment. In that case, being transparent about the gap and revising the plan matter more than a perfect record.