Number of companies with science-based targets doubled in 2023

The SBTi Monitoring Report 2023 recorded a 102% increase in companies setting science-based targets in 2023 alone compared to all the years since the initiative’s inception.

According to the report, there was an 83% increase in the number of financial institutions and a 57% increase in corporates setting science-based targets in 2023 compared to 2022. The SBTi also recorded a “major growth” in the number of SMEs setting targets.

A total of 449 corporates set targets that are in line with the SBTi’s Net-Zero Standard, requiring emissions to be reduced by at least 90% by 2050 at the latest. This represents a 245% increase on 2022 figures.

The SBTi’s chief executive Luiz Amaral said: “It is encouraging to see science-based target setting growing fast in the major exporting countries of the world. It shows the growing need for instruments and standards to enable corporate decarbonisation on a mass scale.

“The deepening foothold of the SBTi in global markets demonstrates a growing understanding of companies of what is required of them to meet the aims of the Paris Agreement. We must now fight harder than ever to keep those aims alive, so I call on companies everywhere to set targets and make annual emissions disclosures as a matter of urgency.”

Manufacturing and services accounted for 58% of target-setting companies in 2023. Pharma and healthcare, which was the lowest growth industry in 2022, recorded a 222% increase in the number of companies with validated targets, the highest growth recorded by a sector last year.

The UK was dethroned as the nation with the highest number of validated companies. Japan now has 768 validated companies in total, overtaking the UK (693), with the US rounding up the top three with 465.

The highest growth was recorded in India. In 2023, 78 companies set science-based targets in India, a 520% growth, with the total now at 93.

The SBTi is currently fine-tuning its Corporate Net-Zero Standard following the launch of the inaugural version in 2021. The SBTi released a statement in April confirming that it would produce updated guidance on how companies can use ‘environmental attribute certificates’ including carbon credits to account for the delivery of their climate goals, specifically those relating to Scope 3 (indirect) emissions.

This update is expected to relax guidelines on the use of offsets. At present, companies wishing to align with the SBTi’s Net-Zero Standard can only use offsets to address 10% of their absolute emissions across all scopes. Many firms have aired concerns that they will not be able to deliver such significant emissions cuts.

The report comes just days after the British Standards Institution (BSI) launched an 18-month process to develop a new, independently verifiable standard to assure the credibility of net-zero targets from businesses and other organisations.