The fight against climate change is entering a critical phase, and businesses are at the forefront of driving meaningful change. On Tuesday, March 18th, 2025, the Science-Based Targets initiative (SBTi), a global leader in assessing corporate climate goals, unveiled a set of new rules aimed at improving the quality and accessibility of corporate emissions-reduction plans. These proposed updates are a game-changer for companies and individuals eager to align their climate actions with science-backed strategies.
Understanding the New SBTi Rules
The SBTi's new rules strike a delicate balance between ambition and pragmatism. They maintain the organization’s firm stance against the widespread use of carbon offsets, emphasizing that companies must prioritize reducing emissions at their source before considering offsets for residual emissions. This focus ensures that companies are genuinely cutting their carbon footprints rather than relying solely on external projects.
Key changes include:
- Maintaining a Limited Role for Carbon Offsets:
- Companies can offset only their residual emissions—those emissions that remain after all feasible reduction efforts.
- Encourages purchasing carbon credits that support broader climate efforts, such as reforestation or renewable energy projects, even if these are not directly tied to the company’s supply chain.
- New Strategies for Addressing Scope 3 Emissions:
- Companies can now include their procurement strategies to tackle Scope 3 (supply chain) emissions.
- Focus on targeting the most carbon-intensive activities in their supply chains.
- Optional Scope 3 targets for smaller companies, enabling broader participation without overwhelming smaller organizations.
- Inclusion of Emerging Markets and Smaller Companies:
- The proposed rules aim to make it easier for businesses in emerging markets and small-to-medium enterprises (SMEs) to set science-based targets.
- This inclusion supports global climate equity and recognizes the diverse challenges faced by companies of varying sizes and regions.
What This Means for Businesses
Businesses now have clearer guidance on how to craft and implement high-quality emissions-reduction plans that align with the latest climate science. These rules are particularly timely as corporate climate ambitions face increased scrutiny, especially in the United States, where political and legal challenges have created headwinds for climate-friendly policies.
Yet, the SBTi reports promising growth: by the end of 2024, nearly half of all companies listed on G7 stock markets had validated science-based targets. The new rules are expected to accelerate this momentum by simplifying participation and improving access for smaller players.
Actionable Steps for Businesses
Here are practical ways businesses can align with the SBTi's proposed rules:
- Prioritize Emissions Reductions Over Offsets:
Focus on operational efficiencies, clean energy transitions, and sustainable supply chain practices to reduce emissions at the source. Only consider carbon credits for unavoidable emissions. - Evaluate and Address Scope 3 Emissions:
- Map your supply chain to identify carbon-intensive activities.
- Partner with suppliers to adopt sustainable practices.
- Update procurement policies to prioritize low-carbon suppliers and materials.
- Support Broader Climate Initiatives:
Purchase high-quality carbon credits to fund projects like reforestation, renewable energy, or methane capture, ensuring they meet rigorous standards for environmental integrity. - Make Climate Goals Accessible for SMEs:
For smaller businesses, set achievable emissions-reduction targets and leverage new tools provided by the SBTi to measure progress. - Engage Stakeholders and Build Transparency:
Clearly communicate your climate goals and progress to stakeholders, including investors, customers, and employees. Transparency fosters trust and encourages collaboration.
What This Means for Individuals
While these rules primarily target businesses, individuals also play a critical role in fostering accountability and supporting climate action. Here’s how:
- Hold Businesses Accountable: Choose to support companies that set science-based targets and demonstrate real progress in reducing emissions.
- Offset Your Carbon Footprint: As individuals, we can purchase carbon credits for unavoidable emissions, such as air travel, through verified programs.
- Advocate for Climate Equity: Support policies and organizations that prioritize climate action in emerging markets and underserved communities.
- Educate and Engage: Learn about Scope 3 emissions and the broader impacts of corporate supply chains, then advocate for more sustainable practices in your community and workplace.
The Bigger Picture: Why This Matters Now
These updates come at a time of both challenge and opportunity. Climate ambition appears to be waning in some regions due to political and economic pressures, but the SBTi's proposals provide a roadmap for sustaining—and even expanding—corporate climate action.
By enabling smaller companies and emerging markets to participate, the SBTi fosters global climate equity, ensuring that all regions can contribute to and benefit from the transition to a low-carbon future.
Final Thoughts
The SBTi’s new rules represent a pivotal moment in corporate climate action, blending accessibility with accountability. They empower businesses to take meaningful steps toward reducing emissions while ensuring that those steps are grounded in science.
For individuals and businesses alike, this is a call to action. Whether it’s rethinking supply chain strategies, purchasing high-quality carbon credits, or simply choosing to support climate-conscious companies, the time to act is now.
By embracing these changes, we collectively move closer to a future where climate action is not only a responsibility but an opportunity for innovation, equity, and shared prosperity.
Let’s seize the moment—together.
Thank you for reading!
