SBTI: Driving Sustainability Forward - An Overview and Importance for a Sustainable Future

SBTI: Driving Sustainability Forward - An Overview and Importance for a Sustainable Future

In 2018, the IPCC warned that a 1.5-degree Celsius global warming could have catastrophic climate impacts, leading to increased global focus on curbing GHG emissions. Science-based targets (SBTs) are now enabling businesses to chart a clear path towards decarbonization, reducing emissions levels, unlocking business benefits and future-proofing operation models during the transition to a net-zero economy

Setting SBTs can unlock several key benefits for companies, including:

Innovative Opportunities: A low-carbon business model transition towards Net Zero can drive innovation and create new opportunities for companies. Collaboration with sustainable technology partners can enable the adoption of new, smart solutions throughout the ecosystem

Compliance Assurance: SBTs help companies future-proof their operation models and align themselves as early adopters of the Paris Agreement, ensuring compliance with present and future regulations. This enhances the ease of doing business and enables businesses to meet more stringent emission curbs imposed by national governments

Improved Brand Recognition: Sustainability is becoming essential for better brand recall as customers prioritize ethical consumption. SBTs are preferred by companies to drive brand recognition and exhibit desirable characteristics such as robustness, confidence, and credibility, resonating well with customers and driving brand value

Increased Investor Confidence: Environmental policies of a business often play a crucial role in future investment decisions. SBTs can help enhance investor confidence and position a company as forward-thinking and sustainability-minded. A multinational retailer leveraged SBTi to resonate with ethics- and environment-oriented investors, showcasing its commitment to sustainability

Competitive Advantage: SBTs provide businesses with a stronger innovation framework, mature compliance mechanism, improved brand recall, and enhanced investor confidence, giving them an edge over their competitors. These companies are better positioned to leverage new opportunities in the low carbon economy and are ahead of the curve in their journey towards Net Zero

Improved Profitability: Despite concerns about the high cost of adopting a green business model, companies that have embraced SBTs have experienced bottom-line savings. Lean and efficient operations, combined with future-proofing against increasingly scarce and expensive non-renewable resources, are becoming key determinants of continued profitability versus potential losses

Since the Paris Agreement, over 330 companies with set targets have decreased their emissions by a quarter within five years. In 2020, the adoption rate of such targets doubled compared to the period between 2015 and 2019. To ensure continued success over the coming decades, businesses must examine their operations and adopt sustainability standards as we move towards a greener world