Guiding Companies Toward Climate Action and Compliance

You can now check how companies are progressing on their climate action plans via Doorda. The Science Based Targets initiative (SBTi) is an organization that helps companies and financial institutions set goals to reduce their greenhouse gas emissions in line with what climate science says is necessary to combat global warming. It was created through a partnership between well-known environmental groups like the Carbon Disclosure Project (CDP), the United Nations Global Compact, the World Resources Institute (WRI), and the World Wide Fund for Nature (WWF). Its main goal is to ensure that businesses and financial institutions contribute to keeping the global temperature rise below 2°C, with the ideal goal of staying within a 1.5°C increase, as outlined in the Paris Agreement.

The idea behind SBTi is that companies need to take responsibility for their role in climate change. By following SBTi’s guidelines, businesses can set realistic and measurable goals for reducing their emissions. These goals are considered “science-based” because they align with scientific studies on how much emissions need to be cut to avoid the worst effects of climate change. SBTi provides companies with tools and guidance on how to measure their carbon footprint and set appropriate reduction targets.

For businesses, adopting these targets shows a strong commitment to addressing climate change. It also gives them a clear plan for how to reduce their environmental impact over time. This kind of action is increasingly important, not just for meeting regulatory requirements, but also for building trust with customers, investors, and other stakeholders who are paying more attention to how companies handle environmental issues.

From a compliance perspective, the data provided by SBTi is very helpful. First, SBTi ensures that the targets companies set are based on science, meaning they are credible and can be verified. Second, as governments around the world introduce stricter environmental regulations, companies with science-based targets are in a better position to comply with these rules. Many countries are already requiring businesses to disclose their environmental impact and outline plans for reducing emissions. Companies that use the SBTi framework are ahead of the game because they have already set clear goals and gathered data to track their progress.

In addition, financial institutions are increasingly factoring climate risk into their decisions. Companies that follow SBTi are more likely to attract investment because they provide clear data showing their commitment to reducing emissions, which reduces the risk of penalties or negative financial impacts related to non-compliance with environmental laws.

In short, SBTi helps companies fight climate change while also preparing them for future regulatory demands and building stronger relationships with investors and customers.