Is it necessary to use the GHG Protocol to calculate carbon emissions before SBTi is set? 

1. Is it necessary to use the GHG Protocol to calculate carbon emissions before setting SBTs? Before setting Science-Based Targets (SBTs), it is usually necessary to use the Greenhouse Gas Protocol (GHG Protocol) to calculate an organization's carbon emissions. The GHG Protocol provides globally recognized standards for quantifying and managing greenhouse gas emissions. This includes three areas (Scope 1, Scope 2, and Scope 3): 

• Scope 1: Direct emissions, from sources owned or controlled by the organization, such as fuel-burning equipment and vehicles. 

• Scope 2: Indirect emissions, primarily related to purchased electricity, heat, steam, or cooling. 

• Scope 3: Other indirect emissions, such as supply chain, product use, and disposal. 

Science-based targets require companies to formulate emission reduction targets based on the latest climate science to ensure that greenhouse gas emission reductions align with global greenhouse gas control targets of 1.5°C to 2°C. Using the GHG Protocol to calculate carbon emissions can help organizations accurately understand their carbon footprint and develop effective emission reduction strategies, which is the foundation for implementing science-based targets. Furthermore, this data is also used to report carbon emissions to stakeholders and verify the achievement of emission reduction targets. 

2. Can I use the ISO 14064-1 standard to calculate greenhouse gas emissions? 

The ISO 14064-1 standard can be used to calculate and report greenhouse gas emissions, which is also a feasible method for setting science-based targets (SBTs). ISO 14064 is a set of international standards for greenhouse gas accounting and verification published by the International Organization for Standardization (ISO) that consists of three parts:

 ISO 14064-1: Provides frameworks and principles for greenhouse gas emissions and removal within an organization. This section helps organizations calculate direct and indirect carbon emissions and develop strategies to reduce emissions. ISO 14064-2: Focuses on the reduction or increase in removal of greenhouse gases from specific projects. ISO 14064-3: Provides guidelines for verifying and auditing greenhouse gas claims. 

Using the ISO 14064-1 standard, organizations can effectively quantify their greenhouse gas emissions and removals, which is the basis for setting scientific carbon reduction targets. This standard provides clear guidelines to ensure accuracy and consistency in emissions data, which is crucial for developing solid carbon reduction plans. Therefore, whether using the GHG Protocol or ISO 14064-1, the primary purpose is to accurately quantify and manage greenhouse gas emissions, thereby supporting the development and implementation of effective climate action strategies. This data will provide the necessary foundational information when setting science-based carbon reduction targets. The feasibility of using ISO 14064-1 standards to calculate and report greenhouse gas emissions for setting science-based targets (SBTis) is based on the following considerations: 

• Internationally Recognized Standard: ISO 14064-1 is a standard for greenhouse gas accounting and reporting published by the International Organization for Standardization (ISO) with a wide range of international recognition and applications. This ensures the correctness and consistency of its methodology, making it a universal standard for greenhouse gas management for businesses worldwide.

•  Accuracy and Transparency: ISO 14064-1 provides a framework and guidelines for accurately calculating greenhouse gas emissions, emphasizing data accuracy, completeness, and transparency, which are key requirements in the scientific process of setting carbon reduction goals. 

• Comparability: Organizations using this standard can generate comparable greenhouse gas emissions reports, which is valuable for tracking and comparing emissions changes over different periods and measuring emission reduction efforts. 

• Requirements for Science Based Targets (SBTs): The Science Based Targets initiative (SBTi) encourages companies to set emission reduction targets based on the latest climate science, which requires companies to first have a reliable set of greenhouse gas emissions data. ISO 14064-1 provides such a data foundation that enables companies to develop and report on their emission reduction targets based on scientific evidence. 

• Integration and Flexibility: While ISO 14064-1 provides rigorous guidelines, it also allows companies to adapt to their specific circumstances, making this standard not only applicable to organizations of different sizes and types but also seamlessly integrated with other climate actions and policies. 

Therefore, ISO 14064-1 is not only a standard for the calculation and reporting of greenhouse gas emissions, but also a practical basis for setting scientific carbon reduction targets. The widespread application and recognition of this standard guarantee its important position in global climate action. 

Does the Science Based Targets initiative (SBTi) mandate emissions to be calculated in Scope 3 (Scope 3) according to the GHG Protocol ? 

The Science Based Targets initiative (SBTi) strongly recommends that companies use the Greenhouse Gas Protocol (GHG Protocol) to calculate their Scope 1, 2, and 3 emissions, as it provides a globally recognized set of detailed standards and frameworks that ensure consistency and comparability of greenhouse gas emissions data. For Scope 3, which is indirect corporate emissions, especially those from the corporate value chain, the GHG Protocol provides detailed classification and calculation guidelines, which help companies comprehensively assess their carbon footprint across the value chain. According to the SBTi, if a company's Scope 3 emissions account for more than 40% of its total emissions, it will need to set specific Scope 3 reduction targets. While the SBTi strongly recommends using the GHG Protocol, it does not actually mandate that it be used to calculate Scope 3 emissions. Businesses can choose other methods that comply with international standards to calculate their greenhouse gas emissions, such as ISO 14064-1, as long as these methods provide accurate, comprehensive, and SBTi-compliant data. However, most businesses choose to use GHG Protocol due to its universal acceptance and ability to provide consistency in data comparison with other businesses. Therefore, when choosing a method for calculating greenhouse gas emissions, companies should consider the global recognition of their methods and their compatibility with scientific carbon reduction goals. 

How to use the ISO 14064-1 standard to calculate and report Scope 3 emissions, which include indirect emissions such as supply chain, product use, and end-of-life treatment, where the scope of ISO 14064-1 may seem limited. The Science Based Targets (SBTs) require stricter Scope 3 targets, especially when Scope 3 emissions account for a significant proportion of a company's total emissions. Here are some explanations and explanations: 

• Scope 3 Coverage: The GHG Protocol provides a very broad coverage of Scope 3, covering all indirect emissions, from purchased raw materials to the use and disposal of products. These are divided into 15 subcategories, which require businesses to have a thorough understanding and calculation of emissions across their entire value chain. 

• ISO 14064-1 Scope: ISO 14064-1 does focus on organizational direct and indirect energy emissions (Scope 1 and Scope 2), and does not cover Scope 3 as well as the GHG Protocol. However, ISO 14064-1 provides a framework for identifying, calculating, and reporting greenhouse gas emissions, including those originating from an organization's value chain.

•  Calculating Scope 3 with ISO 14064-1: Although ISO 14064-1 is less comprehensive than the GHG Protocol in terms of Scope 3 provisions, companies can still leverage the framework of ISO 14064-1 to identify and report Scope 3 emissions, particularly those indirectly related to their direct business activities. Businesses can do this by incorporating ISO 14064-1 and other more specialized guidelines. 

• Flexibility in Science Based Targets (SBTi): The SBTi does not limit which specific criteria companies must use to calculate their greenhouse gas emissions. In fact, the SBTi encourages businesses to use the standards and methodologies that best suit their circumstances. If companies choose to use ISO 14064-1, they should ensure that all relevant emissions, including Scope 3, can be reported comprehensively and accurately. 

The conclusion is that while ISO 14064-1 may not be as comprehensive as the GHG Protocol in terms of scope 3 coverage, it can still be used by companies to support the development and reporting of their science-based carbon reduction targets, especially by using a combination of standards and methodologies to address possible shortcomings. Leveraging the ISO 14064-1 standard to identify and calculate Scope 3 emissions in the Science Based Targets (SBTs) requires specific steps and methodologies. While ISO 14064-1 focuses primarily on an organization's direct emissions (Scope 1) and indirect energy emissions (Scope 2), it provides principles and frameworks that can also be used to identify and manage Scope 3 emissions. Here are the steps on how to proceed: 

1.Identify emission sources:

 According to ISO 14064-1, it is first necessary to identify all indirect sources of emissions from an organization's activities, including supply chains, product use and final disposal, among others. Identify various Scope 3 emission sources that are closely related to the organization's business activities, such as raw material procurement, outsourcing services, transportation services, energy consumption over product life, and product lifetime treatment. 

2.Collect data:

 Collect relevant data to quantify emissions from various Scope 3 sources. This may include data provided by suppliers, industry averages, or estimates using life cycle assessment (LCA) methods. For data collection, ISO 14064-1 advocates the use of accuracy and integrity principles, ensuring data quality and reliability. 

3.Calculate Emissions: 

Use the appropriate emission factors and conversion factors to convert the collected data into CO2 equivalent emissions. These factors can be sourced from national databases, industry standards, or internationally recognized databases. Uncertainty in emissions should be considered and uncertainty assessment should be carried out in accordance with the requirements of ISO 14064-1.

4. Preparation and Reporting: 

Prepare greenhouse gas inventory reports in accordance with ISO 14064-1, including descriptions of emission sources, data management processes, emission calculation methods, and results. The report should include a comprehensive description and explanation of Scope 3 emissions, as well as any mitigation measures taken and future plans. 

5.External Validation: 

Consider conducting third-party verification to enhance the credibility and transparency of the report, aligning with ISO 14064-3 guidelines for verification and review. 

Through these steps, while ISO 14064-1 does not provide detailed guidance specifically for Scope 3, it provides principles and frameworks that can be used to support the identification, calculation, and reporting of Scope 3 emissions in science-based targets. Additionally, it may be necessary to supplement it with specific guidelines from GHG Protocol Scope 3 to ensure comprehensive consideration and management of all associated emissions. 

SBTi methodology for setting carbon reduction targets 

SBTi (Science Based Targets initiative) target-setting methodology, among which there are five main methods briefly explained and explained their differences: 

Detailed explanation of carbon reduction target setting method : 

1. Absolute Contraction Approach basis: 

Set targets based on total emissions. Considerations: Primarily consider the reduction in total emissions. Flexibility: Less flexibility and more fixed goals. Scope of application: Applicable in scenarios where total emissions need to be ensured to be reduced. 

2. Intensity Approach Basis: 

Set targets based on emissions per unit of product or service. Considerations: Consider changes in production activities and economic growth. Flexibility: Higher flexibility allows for reduced emission intensity while growing. Scope of application: Suitable for fast-growing enterprises that need to control unit emissions. 

3. Sectoral Decarbonization Approach (SDA) Basics: 

Set goals based on industry characteristics and technological advancements. Considerations: Consider industry characteristics, technological advancements, and global carbon reduction coordination. Flexibility: More realistic and feasible, with strong industry specificity. Scope of application: Suitable for industries that need to set goals based on industry characteristics and technological advancements.

 4. Sector-based Approach Basis: 

Set emission reduction targets based on the characteristics of each sector or sub-industry. Considerations: Consider the emission characteristics and carbon reduction potential of each sector or sub-sector. Flexibility: Flexibility allows for different emission reduction targets for different departments. Scope of application: Suitable for large enterprises or industry organizations with multiple departments or sub-industries. 

5. Economic-based Approach Basis:

 Set emission reduction targets based on the scale and growth of economic activities. Considerations: Consider changes in economic growth and output value, often linked to economic indicators like GDP. Flexibility: Higher flexibility allows economic growth to run parallel to emission reduction goals. Scope of application: Applicable to companies or countries that need to link emission reduction targets to economic performance. 

How to choose the most suitable carbon reduction method? 

Selecting the most suitable carbon reduction approach needs to be based on the specific circumstances of the company or organization, including its industry characteristics, growth expectations, potential for technological advancements, and overall strategic goals. Here are some considerations and suggestions to help companies or organizations choose the most suitable carbon reduction method: 

1. Industry CharacteristicsIndustry Characteristics:

•  If there are significant differences in technological advancements and emission reduction potential within the industry, it is recommended to use the Sector Decarbonization Method (SDA) or Sector-based Approach. This allows for more realistic and targeted goals.

•  Uniformity Requirements: If there is a need to unify emission reduction targets across industries or sectors, the Sector Decarbonization Act (SDA) is a better choice. 

2. Rapid growth expectations: 

• For companies that anticipate rapid growth in business or production, the Intensity Approach and Economic-based Approach are ideal choices. These methods allow for a reduction in the emission intensity per unit of product or service while economic growth is being reduced. 

• Steady or No Growth: If the company's growth is relatively stable or limited, the Absolute Contraction Approach can provide a clear and manageable emission reduction target. 

3. Technological Progress Potential Technological innovation:

•  If an industry or enterprise has significant potential for technological innovation, the Sector Decarbonization Act (SDA) and Sector-based Approach can make full use of these potentials to set more challenging but achievable goals. 

• Mature technology: If the industry is more technologically mature, the Intensity Approach may be more suitable, as it focuses more on improving the efficiency of existing processes.

 4. Organizational structure Multiple departments or sub-industries: 

• For large enterprises or industry organizations with multiple departments or sub-industries, the Sector-based approach can set specific goals based on the characteristics of different departments, providing a more flexible management approach. 

• Single structure: For companies with a relatively single structure, the Absolute Contraction Approach or Intensity Approach can provide a simple and straightforward way to set goals. 

5. Global Harmonization of Strategic Goals:

•  If companies or organizations need to align with global carbon reduction goals, the Industry Decarbonization Act (SDA) can ensure that emission reduction pathways align with global standards. 

• Local Priority: If the local market or industry characteristics are primarily considered, the Sector-based Approach or Economic-based Approach can be more flexible in adapting to local needs.

 Comprehensive Considerations and Decision-Making Based on the above considerations, enterprises or organizations can comprehensively evaluate and select the most suitable carbon reduction method: 

1.Analyze industry and enterprise characteristics: Understand the potential and characteristics of the industry's technological advancements, and evaluate the company's growth expectations and structure. 

2.Set strategic goals: Clarify the company's long-term carbon reduction goals and strategies, considering the balance between global and local needs. 

3.Choose the appropriate method: Based on the analysis results, select the most suitable carbon reduction method and formulate a specific implementation plan. 

How can companies evaluate their carbon reduction effects on their own? 

Evaluating the carbon reduction effectiveness of companies is a crucial step in ensuring the effectiveness of carbon reduction strategies and achieving goals. Here are several key methods and indicators for evaluating corporate carbon reduction effectiveness:

 1. Base Year and Target Setting Base Year Selection: Select a base year as a reference point to compare emission reduction effects. The base year should be the year in which the data is complete and representative. Goal Setting: Set short-term and long-term carbon reduction targets based on science-based or industry standards, ensuring that the targets are specific, measurable, achievable, relevant, and time-bound (SMART principles).

 2. Quantitative greenhouse gas emissions inventory: Conduct a comprehensive greenhouse gas emissions inventory every year, including Scope 1 (direct emissions), Scope 2 (indirect emissions) and Scope 3 (other indirect emissions). Standard Methodology: Use international standards such as the Greenhouse Gas Inventory Protocol (GHG Protocol) for emissions calculation and reporting, ensuring data consistency and reliability. 

3. Accounting Verification and Reporting Annual Reports: Regularly publish annual reports on corporate greenhouse gas emissions to showcase carbon reduction progress and data. External Verification: Hire a third-party agency to conduct external verification to ensure data accuracy and credibility (not mandatory). 

4. Key Performance Indicator (KPI) Absolute Emissions: Track and report changes in the company's total emissions. Emission Intensity: Calculate and report the emission intensity per unit of product, revenue, or other related activities. Effectiveness of Carbon Reduction Measures: Evaluate the effectiveness of specific carbon reduction measures, such as energy efficiency improvements, renewable energy use, and technological upgrades.

 5. Effectiveness Evaluation Tool Carbon Footprint Analysis: Analyze the carbon footprint of the entire company and specific products to understand the emission sources and emission reduction potential of different links. Scenario Analysis: Simulate emissions changes under different scenarios to assess the impact of policy, technology, and market changes on carbon reduction effects. Comparative Analysis: Compare with peers or best practices to identify gaps and areas for improvement. 

6. Stakeholder Engagement with Internal Employees: Train and motivate employees to participate in carbon reduction activities and establish an internal carbon reduction culture. External Collaboration: Collaborate with suppliers, customers, and other stakeholders to jointly promote the achievement of carbon reduction goals. 

7. Continuous improvement of improvement measures: Based on the evaluation results, continuously improve carbon reduction strategies and measures to ensure continuous improvement of carbon reduction effectiveness. 

Technological Innovation: Invest in and apply new technologies to improve carbon reduction efficiency and effectiveness.

•  Carbon reduction effect evaluation process :

1.Setting benchmarks and goals: Determine the base year and set specific carbon reduction targets. 

2.Data collection and accounting: Conduct an annual greenhouse gas emissions inventory for a base year to collect and account for data. 

3.Reporting and verification: Regularly publish reports and conduct external verification (not mandatory).

4. Performance Evaluation: Use KPIs and evaluation tools to analyze carbon reduction effects. 

5.Stakeholder Engagement: Encourage internal and external participation to enhance carbon reduction effects. 

6.Continuous Improvement: Continuously optimize carbon reduction strategies based on assessment results. 

Financial Sector/Institution (SBTi) Objectives and Implementation 

According to the Financial Sector's Science Based Targets initiative (SBTi) guidance, it provides a clear framework to help financial institutions develop and implement carbon reduction targets to combat climate change. These targets are based on the latest climate science research and are consistent with the Paris Agreement's long-term goal of limiting global average temperature rise to less than 2°C above pre-industrial levels and striving to limit it to 1.5°C. Financial institutions play a crucial role in driving global economic transformation, directly impacting the reduction of greenhouse gas emissions through their investment and financing activities. 

• The so-called financial sector refers to the financial department of the enterprise? Or a single financial institution? 

The "financial sector" mentioned in the context of the Science Based Targets (SBTi) refers to the entire industry or sector involved in financial services, rather than the financial sector within a business. This includes, but is not limited to, banks, insurance companies, asset managers, investment banks, pension funds, and other institutions that provide financial products and services. 

• Science Based Targets for the Financial Sector 

The Science Based Targets Guidance for the Financial Sector is designed to help these financial institutions set and implement emissions reduction targets that meet climate science requirements. These targets focus not only on direct and indirect emissions from financial institutions' own operations (such as energy consumption in office buildings and emissions from employee travel), but also on emissions indirectly impacted by financial institutions through investment and financing activities, which are commonly referred to as Scope 3 emissions. So when we talk about the role and responsibility of the financial sector in the SBTi, we are talking about the financial services industry as a whole and its contribution and impact on climate action. 

• What does it mean to meet the Science in Climate Emission Reduction Targets? 

The emission reduction targets required by climate science are mainly based on internationally accepted scientific research and policy frameworks, especially the Paris Agreement under the United Nations Framework Convention on Climate Change (UNFCCC). These targets are set to prevent the global average temperature from rising by more than 2°C compared to pre-industrial levels and strive to limit temperature increase to 1.5°C to reduce the serious risks and impacts of climate change. 

• The science-based emission reduction targets mainly include:

1. Carbon neutrality/net-zero emissions: This refers to the global need to achieve net-zero carbon emissions by 2050, that is, human-generated greenhouse gas emissions need to be absorbed through natural or technological means to offset emissions. 

2.Significant reduction in greenhouse gas emissions: To achieve the above temperature control goals, the international climate science community generally agrees that global greenhouse gas emissions need to be reduced by at least 45% by 2030 compared to 2010 levels and reach net-zero emissions by 2050. 

3.Short-term and long-term emission reduction pathways: Set specific short-term (e.g., pre-2030) and long-term (e.g., 2050) emission reduction targets to guide countries and regions in formulating corresponding climate action plans and policies. 

4.Adaptation Measures: In addition to emission reductions, science-based goals include enhancing the resilience of societies and ecosystems to cope with the inevitable impacts of climate change. 

Strategies to achieve these goals: 

1.Energy transition: Shifting from fossil fuels to renewable energy sources to reduce carbon emissions. 

2.Energy Efficiency Enhancement: Reduce energy demand and carbon emissions by improving energy efficiency. 

3.Forest Protection and Tree Planting: Enhance and protect natural carbon sinks. 

4.Innovative Low-Carbon Technologies: Develop and deploy carbon capture, use, and storage (CCUS) technologies and other innovative low-carbon technologies. 

Key Points of the SBTi Financial Sector 

1.Guidance Target Scope and Applicable Audience: The SBTi Financial Sector Guidance is primarily aimed at integrated banks, asset managers, asset owners (such as pension funds and insurance companies), and mortgagedized real estate investment trusts. These institutions should include asset classes including real estate, mortgages, project financing for power generation facilities, corporate and consumer loans, bonds, and equity in their science-based targets. 

2.Target-setting methodology: The guidance recommends using three main methodologies: the Sectoral Decarbonization Approach (SDA), the SBTi Portfolio Coverage Methodology, and the Climate Rating Methodology to determine the alignment of financial institutions' investment and financing portfolios with the climate stability pathway. 

3.Business case: Setting science-based targets can help financial institutions improve their resilience and competitiveness in the face of extreme weather events and other climate-related risks, and adapt to the rapidly evolving climate policy and regulatory environment.

4. Target Verification Criteria: Financial institutions are required to set targets for direct (Scope 1 and 2) emissions generated by their operations and develop effective strategies to reduce indirect (Scope 3) emissions from their investment and financing activities. 

5.Implementation and Reporting: Financial institutions should transparently report on the development, implementation, and progress of their science-based targets, and regularly update their strategies to align with the latest climate science and policy requirements. 

When setting and implementing SBTi, financial institutions should focus on "climate action" and "target setting", and should consider the following points: 

I. Integrate climate action strategies: 

Incorporate climate change into corporate governance and decision-making processes, and work together with stakeholders to jointly formulate and implement climate action strategies. Integrating climate action demonstrates financial institutions' awareness and responsibility towards climate change issues. By integrating climate change risks and opportunities into their decision-making processes, financial institutions can better manage related risks and seize investment opportunities that arise during the low-carbon transition process, thereby supporting global climate action and enhancing their competitiveness: 

1.  Executive Commitment and Leadership: Ensure that the company's senior management has a clear commitment and strong leadership in decisions to integrate climate action, and incorporate climate-related goals and strategies into the company's long-term development plan. 

2. Policies and Procedures: Develop and implement internal policies and procedures, including risk management, investment evaluation, and business operations, to ensure that climate change considerations are present at all stages of decision-making and business processes.

 3. Risk Management: Integrate climate change risks into the overall risk management framework, regularly assessing and reporting on climate-related financial and non-financial risks. 

4. Knowledge Sharing and Collaboration: Engage in knowledge sharing and collaboration with stakeholders such as industry peers, policymakers, academia, and civil society organizations to jointly enhance awareness and response capabilities to climate change issues.

 5. Employee Training and Engagement: Raise awareness of climate change through employee training and engagement programs, encouraging employees to take climate-friendly actions at work. 

6. Transparent Reporting and Communication: Regularly report to external stakeholders on the company's climate action plans, progress, and effectiveness, enhancing corporate transparency and enhancing public and market trust. 

II. Scientific Goal Setting and Implementation:

 Incorporate climate change into corporate governance and decision-making processes, working together with stakeholders to jointly formulate and implement climate action strategies. When setting and implementing science-based targets (SBTis), financial institutions should consider the following points to ensure the effectiveness of target setting and implementation, in addition to integrating climate actions: 

1. Scientific basis and ambition of targets: The carbon reduction targets set should be based on the latest climate science research and the global temperature control targets of the Paris Agreement. The targets should be ambitious enough to facilitate substantial emission reduction actions.

 2. Comprehensive coverage of greenhouse gas emissions: In addition to focusing on direct emissions (Scope 1) and indirect emissions from energy purchases (Scope 2), financial institutions should also consider the impact of their investment and financing activities on indirect emissions (Scope 3) to ensure that the targets fully cover all relevant emission sources. Financial institutions, especially in (Category 15), investment and financing portfolios (Investments) refer to indirect emissions caused by financial institutions having an impact on external projects or companies through their investment and financing activities. 

3. Transparency and traceability: During the goal setting and implementation process, a high degree of transparency should be ensured, and the progress and implementation results of the goals should be made public to increase credibility and promote continuous improvement.

4. Active Stakeholder Engagement: Actively communicate and collaborate with stakeholders such as investors, customers, suppliers, and policymakers to jointly promote broader climate action. This includes encouraging companies in their portfolios to set and implement their own science-based carbon reduction targets. 

5. Ongoing Education and Training: Conduct education and training related to climate change and carbon management to internal teams to raise awareness among employees about the importance of climate action and develop necessary skills to support the implementation of goals.

 6. Strategy Flexibility and Adjustment: As the external environment changes and the progress of goals are monitored, flexibly adjust emission reduction strategies and action plans to ensure the successful achievement of goals. 

Summary of SBTi Core Points of Financial Institutions/Departments 

1. Target scope and applicable targets: Mainly targeted at comprehensive banks, asset management companies, asset owners (such as pension funds and insurance companies) and mortgaged real estate investment trusts. The requirements cover asset classes such as real estate, mortgages, project financing for power generation facilities, corporate and consumer loans, bonds, and equity.

 2. Goal setting methods: It is recommended to use the Sectoral Decarbonization Method (SDA), SBTi Asset Portfolio Coverage Method, and Temperature Rating Method to determine the consistency between the financial institution's investment and financing portfolio and the climate stability path. 

3. Business Case: Setting science-based carbon reduction targets can enhance resilience and competitiveness in the face of climate-related risks, adapting to rapidly evolving climate policies and regulatory environments. 

4. Target verification criteria: Financial institutions need to set targets for direct (Scope 1 and 2) emissions generated by their operations and formulate effective emission reduction strategies for indirect (Scope 3) emissions caused by their investment and financing activities. 

The SBTi guidance for the financial sector provides a clear path for financial institutions to play an active role in global efforts to combat climate change by setting and implementing carbon reduction targets aligned with the Paris Agreement. Through these efforts, financial institutions can not only reduce their impact on climate change but also enhance their resilience to climate-related risks and capture new opportunities due to the global economy's transition to low-carbon. 

SBTi Establishment Act for Financial Institutions 

What are the main methods of setting SBTi targets for the financial sector/institutions? In the Financial Sector's Science Based Targets (SBTi) guidance, several target-setting methodologies are specifically recommended to help financial institutions identify and implement effective emission reduction strategies based on climate science. The following is a breakdown of these approaches: 

1. Sectoral Decarbonization Approach (SDA) 

SDA is an industry-specific emission reduction pathway-based approach designed to ensure that sectors achieve carbon reduction targets equitably based on their contribution and emission reduction potential to global greenhouse gas emissions reduction (according to the International Energy Agency). This approach is particularly applicable to financial institutions that invest directly in specific sectors or have physical assets, such as energy, transportation, and construction. 

Implementation steps: 

A. Assess the carbon intensity of specific sectors within your portfolio. 

B. According to the scientific emission reduction path of each department, set corresponding emission reduction targets.

C. Take action to achieve these emission reduction targets and regularly monitor and report on progress. 

2. SBTi Portfolio Coverage 

This approach requires financial institutions to screen companies in their portfolios and select those that have set or commit to science-based decarbonization targets, thereby driving the entire portfolio transition in a lower carbon direction. This approach encourages financial institutions to actively communicate and collaborate with their investment firms, prompting more companies to set science-based carbon reduction targets. 

Implementation Steps: 

A.Evaluate the climate actions and carbon reduction commitments of companies in the portfolio. 

B.Prioritize investing in companies that have set or commit to setting SBTi targets. 

C.Collaborate with other companies in your portfolio to encourage them to set science-based decarbonization targets. 

3. Temperature Rating Method: 

The Temperature Rating Method determines the alignment of a financial institution's portfolio with global climate goals by assessing its potential contribution to rising global average temperatures. This approach helps financial institutions understand the impact of their investment activities on climate change and adjust their investment strategies based on the assessment results.

 Implementation steps: 

A.Calculate the portfolio's greenhouse gas emissions and corresponding temperature rise potential using scientific models. 

B.Based on the calculation results, determine the alignment of the portfolio with the 1.5°C or 2°C temperature control target. 

C.Adjust your investment strategy to reduce your portfolio's contribution to warmer temperatures and better align with science-based climate goals. 

These approaches offer different approaches and tools to help financial institutions formulate and implement effective science-based carbon reduction targets based on their specific circumstances and investment strategies to combat climate change globally. 

• Target Verification Criteria 

Financial institutions must follow a set of target validation criteria when developing and implementing science-based targets (SBTi) that ensure that targets are set and reported in line with internationally recognized climate science and business practices. The following are the key elements of these target verification criteria: 

1. The target period for the base year and target year (Guidance Provision FI-C6) must cover a time frame of at least 5 years to a maximum of 15 years, calculated from the date of official validation by the SBTi. 

2. Progress to date/emissions profile (FI-C7) targets achieved prior to the date of submission of the SBTi will not be accepted. The SBTi will assess the forward-looking nature of the target using the target submission year or the most recently completed greenhouse gas inventory that is no earlier than two years prior to the year of submission. 

3. Positivity (FI-C8) Scope 1 and Scope 2 targets should be at least aligned with the required level of decarbonization, while encouraging financial institutions to be more active in pursuing a 1.5°C development trajectory. 

4. Absolute values and intensity targets (FI-C9) Scope 1 and Scope 2 emission intensity targets must be consistent with climate scenarios with global warming well below 2°C, or modeled and benchmarked using approved sectoral pathways. 

5. Methodology effectiveness (FI-C10) Targets must be modeled and benchmarked using the latest version of the methodologies and tools approved by the initiative. 

6. Disclosure of Target Asset Portfolio Coverage Ratio (FI-C18) When announcing targets, it is necessary to disclose the percentage of total investment and financing activities covered by the approved targets. 

7. When submitting targets in the Implementation Report (FI-C19 ), a summary of the expected approach to achieving the Scope 3 portfolio target should be submitted in accordance with the Schedule Template of the Target Declaration Form. 

8. Track and report on progress towards targets (FI-C20) Upon approval of the target, require annual disclosure of Scope 1 and Scope 2 greenhouse gas emissions, progress against all approved targets, and actions/strategies taken during the year to achieve Scope 3 portfolio goals. These standards and guidelines ensure transparency, consistency, and credibility in setting and reporting on their science-based carbon reduction targets, supporting the overall goals of global climate action. 

 Financial Institutions (SBTi) Implementation and Reporting Disclosure

 1. Disclosure of Target Asset Portfolio Coverage (FI-C18) 

When announcing their targets, financial institutions are required to disclose the percentage of total investment and financing activities covered by their investment and financing portfolio targets on the SBTi website. This shows the size of a financial institution's primary operational activities, which may include any combination of commercial banking, investment banking, and asset management. 

2. When submitting the targets in the implementation report (FI-C19 ),

 the financial institution must submit a summary outlining the expected approach to achieving the Scope 3 portfolio target. This summary is designed to ensure transparency in the information.

3. Track and Report Progress on Targets (FI-C20)

] Following the approval of the targets, the SBTi requires annual disclosure of Scope 1 and 2 greenhouse gas emissions, progress toward all approved targets, and actions/strategies taken during the year to achieve the Scope 3 portfolio targets. 

These standards and requirements aim to improve transparency and consistency in the setting and implementation of science-based carbon reduction targets by financial institutions, and to ensure that financial institutions can effectively track and report progress on their commitments to climate action. Through these mechanisms, the SBTi promotes the financial sector's contribution to global decarbonization efforts and supports financial institutions to play an active role in climate action. There are a series of specific steps and recommendations for financial institutions in setting and implementing decarbonization targets under the Science Based Targets (SBTi) guidelines. These steps aim to ensure that financial institutions have the greatest impact on climate change through their investment and financing activities and support the emission reduction goals of the real economy. 

•  Achieving Science Based Targets (SBTs):

 Financial institutions can take the following actions to fully implement climate change strategies in their organizations and services, thereby potentially impacting the real economy's greenhouse gas emission reduction goals: 

1. Consult with key stakeholders: Including enterprises, service providers, and policymakers, jointly develop complementary measures for climate action. 

2. Public Disclosure of Strategies to Mitigate Climate Change Impacts: This includes publicly announcing the strategies and actions taken by financial institutions to reduce the negative impact of their operations on the climate. 

3. Incorporate climate change into governance and decision-making considerations: This requires financial institutions to consider the impact of climate change in their decision-making processes and take corresponding countermeasures [106† SBT_Financial-Sector-Science-Based-Targets-Guidance (Chinese Edition)]. 

• SBTi Call to Action

 The SBTi provides a specific action process to guide financial institutions on how to set, implement, validate, announce, and disclose their science-based targets: 

1. Commit to setting science-based targets: Financial institutions should review and complete the commitment letter before submitting it to the SBT. 

2. Set goals: Financial institutions need to set specific emission reduction targets based on their investment and financing activities, which may include specific asset class targets. 

3. Submit targets for verification: After setting specific objectives, financial institutions need to submit them to the SBTi for formal verification. 

4. Announce approved targets: Once the targets are approved by the SBTi, financial institutions should publicly announce their science-based targets.

 5. Disclose target progress: Financial institutions need to regularly report on the implementation progress and achievement of their targets [106† Sector-Science-Based-Targets-Guidance SBT_Financial(Chinese Edition)]. 

This process aims to ensure that financial institutions' carbon reduction targets are not only scientifically based but also traceable and transparent, effectively supporting global decarbonization efforts.  

What is SBTi (Science Based Emission Reduction Targets initiative)? What are the audit items and target setting? 

I. SBTi constituent body 

SBT (science-based emission reduction target); The SBTi Science Based Targets initiative plays a key role in global sustainable development. It was established by the CDP Carbon Disclosure Project, the UNGC, the United Nations Global Compact, the WRI World Resources Institute and the WWF World Wide Fund for Nature. As the world's first decarbonization framework to set net-zero carbon standards for companies, the SBTi aims to drive science-based emissions reduction actions for companies to help them set near-term and long-term carbon reduction targets to meet the requirements of the Paris Agreement.

II. The three major parts of the SBTi's goals: The science-based reduction targets are divided into three parts for target summarization, including carbon budget, carbon emission scenario, and decentralized allocation tracking for management, that is, to continue to achieve global net zero in three major ways in the process of achieving the final target. (Net Zero 2050: Net zero is not zero emissions, but a climate warming reduction target that does not increase greenhouse gases to achieve half-life greenhouse gases or negative carbon sink results) 

1. Carbon budget part: The part of the greenhouse gas control system that aims to control global temperature rise to 1.5°C and the total amount of greenhouse gases that can be emitted below 2°C. 

2. Emission scenario part: Includes the scenario part for determining the scale of emission reduction and the preset state of the timeline. 

3. Allocation method part: Includes determining how to allocate the maximum range of carbon budget emissions to enterprises or central and local government authorities of various countries. 

III.Four aspects of science-based reduction targets: 

SBTi's science-based reduction targets The so-called corporate net-zero emissions Net Zero standard consists of four aspects, including short-term goals, long-term goals, carbon neutrality methods, and climate finance investment and financing portfolios, the four major parts are as follows: 

1. Short-term rapid emission reduction: With 2030 as the short-term priority target, halving emissions must be the main task of enterprises, by setting the near-term 2030 target. Businesses need to quickly reduce direct and indirect emissions to become the most effective and scientific way to limit global temperature rise below 1.5°C. 

2. Long-term final goal: Companies are required to set long-term scientific goals, with a final acceptance target by 2050 to reduce greenhouse gas emissions by more than 90%.

 3. Neutralizing residual emissions: For more than 90% of the residual value of emissions that have not been reduced under long-term goals, companies must use permanent carbon removal methods and carbon sequestration to offset residual emissions that cannot be eliminated in the end.

 4. Climate finance: For climate finance outside the value chain, the SBTi aims to encourage the private sector to promote and stimulate climate finance, and there is an urgent need to expand recent climate finance policies to achieve net-zero emissions by 2050. 

IV.SBTi target setting method: Currently, SBTi target setting can be divided into two types: short-term emission reduction and long-term net zero, and it is recommended that various organizations, institutions, and enterprises first initiate organizational carbon inventory of greenhouse gases and product-level carbon footprint inventory, and then set scientific carbon reduction targets. There are three main methods that can be carried out: 

1. Industry-based method: allocate carbon allowances (emission permit ranges) to specific industry sectors, and allocate global "carbon budgets" to each industry according to the preset scenario of the International Energy Agency. 

2. Absolute Basis Setting Method: Regardless of industry, regardless of industry, government and public sector, plan carbon reduction targets simultaneously with the absolute basis of global average annual carbon emissions. 

3. CDP Carbon Disclosure Project: Whether companies adopt SBTi science-based reduction targets will directly affect the rating criteria after the CDP Carbon Disclosure Questionnaire. 

V.SBTi operation stage: 

After allowing enterprises or organizations to initially understand the "science-based emission reduction targets", the reducing organizations must be more familiar with the "carbon reduction targets" set by the organization and the concept of "climate science". 

1 . Greenhouse gas inventory: Through the review of projects, conduct greenhouse gas inventories to understand the actual carbon emission status of the company or organization for analysis. 

2. Reduction formulation and setting: Based on the inventory results, identify obvious emission hotspots or effective reduction spaces to plan carbon reduction paths, and set specific science-based reduction targets. 

VI.SBTi application procedure: 

According to the latest SBTi review regulations, in principle, the commitment letter should be downloaded and submitted to the SBTi organization first, and it will be marked as "committed" on the SBTi official website "Target Dashboard", and after making the commitment, it will also be reviewed by the SBTi team, and it must refer to the SBTi guidelines within two years to establish science-based reduction targets (SBTs). If you want to continue participating, you must start over. If the target review is passed within two years, it will be announced on the "target dashboard" for continuous tracking and acceptance of quantitative or acceptance indicators, and communicate with stakeholders to regularly disclose the progress of reduction to comply with the SBT reduction methodology. 

1.Commit: Indicates that the company intends to set science-based emission reduction targets. 

 2. Develop: Companies set specific science-based emission reduction targets within 24 months that align with SBTi guidelines and standards.

 3. Submit: The SBTi team will review whether it is eligible and notify whether it has passed the review. 

4. Communicate: SBTi will publish the company's name and carbon reduction targets in the form of a "target dashboard" on its website, and authorize the use of the SBTi logo, and companies need to announce targets and notify stakeholders.

 5. Disclose: Truthfully disclose corporate carbon emissions, report company-wide emissions annually, and track the progress of quantitative targets. 

VII.Items of SBTi review criteria: 

1. Timeframe: Except for the power generation and maritime industries, which must be achieved by 2040, the near-term target timeframe for other industries must be more than 5 years and less than 10 years in the base year; The long-term goal needs to be achieved by 2050.

 2. Science-Based Target Boundary: Carbon reduction targets must cover and cover at least Scope 1 and Scope 2 of emissions, while Scope 3 is not required to be included first. 

3. Ambition: The goal should be in line with the 1.5°C scenario as its inevitable ultimate carbon reduction goal. 

4. Scope-2: Companies must disclose the calculation and identification of carbon emissions from Scope 2 emission sources, including the use of external energy sources, including purchased electricity, heat, steam, and renewable energy utilization. 

5. Scope-3 Standards: Enterprises must identify their Scope 3 emissions in accordance with the provisions of the Greenhouse Gas Inventory Protocol, and if their Scope 3 emissions exceed 40% of the total emissions, they must set Scope 3 emission targets. Detailed guidance on how to complete the Scope 3 list is provided in accordance with the SBTi Greenhouse Gas Accounting System "Standards for Accounting and Reporting for Enterprises Value Chain (Scope 3)" (WRI & WBCSD, 2011 edition) and the Scope 3 Calculation Guide.

 6. Disclose: Companies need to truthfully disclose the emission inventory of carbon emissions, report company-wide emissions annually, and track the progress of targets. 

VIII.Taiwanese Enterprises Participate in SBTi 

The Science Based Targets initiative (SBTi) has been widely participated in Taiwan, with companies in various industries striving to achieve sustainable development and carbon emission reduction goals, with a total of 21 industry types and more than 100 companies joining and making commitments, with more than 16 financial institutions participating. Here are some representative industry companies participating in SBTi, including different industries and financial institutions: 

1. Semiconductor manufacturing industry 

(1) Taiwan Semiconductor Manufacturing Company (TSMC) TSMC is one of the world's largest independent semiconductor manufacturers, and its participation in SBTi reflects the semiconductor industry's high focus on sustainable development. The company is committed to reducing carbon emissions during production while investing in energy-efficient technologies and renewable energy.

 (2) MediaTek (MediaTek) As a semiconductor company, MediaTek's participation in SBTi aims to reduce its overall carbon footprint. The company actively promotes technological innovation to achieve higher performance chip manufacturing while improving energy conservation and reducing emissions. 

2. Electronics manufacturing 

(1) Foxconn As one of the world's largest electronics foundries, Hon Hai's participation in SBTi demonstrates its commitment to sustainable development. The company is committed to improving the energy efficiency of its manufacturing processes while seeking to reduce the environmental impact of its supply chain. 

3. Financial institutions are particularly numerous in the number of financial institutions, including Fubon Financial Holdings, Yuanta Financial Holdings, Taishin Financial Holdings, E.SUN Financial Holdings, Cathay Financial Holdings, etc., which shows that financial institutions attach great importance to climate policy and climate investment and financing. 

 Taiwanese companies have been actively involved in the SBTi, with various industries striving to achieve sustainable development. The participation of financial institutions further highlights the importance and joint efforts of the whole society in climate action and climate finance policies.  

Science Based Targets initiative (SBTi) Tools and methods for achieving net-zero carbon reduction: (GHG Protolcol Greenhouse Gas Inventory Protocol) 

There is a close relationship and complementarity between carbon inventory (GHG Protocol standard) and Science Based Targets initiative (SBTi) standards. Carbon inventories provide a quantitative basis for greenhouse gas emissions data, which the SBTi uses to set carbon reduction targets, ensuring they align with global efforts to limit temperature to 1.5°C. The following are the main relationships and guidelines between them: 

(1) Carbon Inventory (GHG Protocol)

•  Basis: The GHG Protocol provides organizations with a set of internationally recognized standards for quantifying and reporting greenhouse gas emissions. It includes detailed guidance on direct emissions (Scope 1), indirect energy emissions (Scope 2), and other indirect emissions (Scope 3). 

• Purpose: To enable organizations to accurately calculate and report their greenhouse gas emissions, thereby identifying opportunities for reduction and tracking their progress in reducing emissions. 

(2) Science-Based Targets (SBTi)

•  Basis: The SBTi provides companies with a set of standards and tools to set greenhouse gas reduction targets based on the latest climate science. It requires companies to meet their emission reduction targets in line with the need to limit global warming to 1.5°C. 

• Purpose: To encourage companies to set science-based carbon reduction targets aligned with global carbon reduction efforts to achieve long-term sustainability and climate action. 

(3) Applied Relational 

1.Data-Driven: SBTi's carbon reduction target setting relies on accurate and comprehensive greenhouse gas emission data, which is obtained through the GHG Protocol's carbon inventory process. 

2.Strategic Development: Through GHG Protocol's carbon inventory, organizations can identify opportunities for emission reduction and form strategies and action plans to achieve SBTi goals. 

3.Objective Verification: The SBTi provides a verification process to ensure that the goals set by the business meet its guidelines. The carbon inventory report provided by GHG Protocol is a key basis for this verification. 

4.Continuous Improvement: The SBTi encourages companies to regularly reassess their science-based carbon reduction targets, while the GHG Protocol's carbon inventory process supports the need for companies to continuously monitor their emissions.

 In conclusion, the GHG Protocol provides a methodological basis for quantifying corporate greenhouse gas emissions, and the SBTi leverages this data to drive companies to set and achieve challenging carbon reduction targets. These two complement each other and together contribute to the progress of businesses in climate action and help them contribute to reducing global climate change. 

How to apply GHG Protocol for inventory benchmarking and target setting? 

Utilizing GHG Protocol for carbon inventory, base year setting, and target setting is a systematic process that adheres to the guidelines and methodologies provided by GHG Protocol. Here's an overview of how to effectively use the GHG Protocol to take these steps:

 1. Prepare for Carbon Inventory :

•  Determine organizational boundaries: Choose between "control method" or "equity method" to define which business units or activities should be included in the scope of carbon inventory. 

• Set operational boundaries: Define the scope of direct emissions (Scope 1), indirect energy emissions (Scope 2), and other indirect emissions (Scope 3). 

2. Collect data 

• activity data: Collect necessary activity data for each area, such as fuel usage, electricity consumption, etc.

•  Emission Factor: Choose the appropriate emission factor to calculate the greenhouse gas emissions for each activity. 

3. Calculate Emissions 

• Using GHG Protocol Tools: Utilize the calculation tools and methodologies provided by the GHG Protocol to calculate the total greenhouse gas emissions of an organization. 

4. Base Year Setting : 

• Select a representative year as a reference point for comparing emission reduction progress. The data for the base year should be complete and reliable. 

• Base Year Emissions: Determine the total emissions in the base year, which will serve as a benchmark for assessing progress in reducing emissions. 

5. Goal Setting: 

• Set specific, measurable emissions reduction targets based on the base year's emissions and the organization's emission reduction strategy. 

• Science-Based Targets (SBTi): Ensure that set emission reduction targets align with global greenhouse gas reduction efforts, such as the goal of limiting global warming to 1.5°C. 

6. Monitor and Report Regular Monitoring:

•  Regularly monitor your organization's greenhouse gas emissions to assess progress towards achieving set goals.

•  Transparent Reporting: Prepare and make public carbon inventory reports in accordance with GHG Protocol standards, which should detail the organization's emissions data and mitigation efforts. 

7. Third-Party Verification (Optional)

•  Increase Credibility: Consider conducting third-party verification to increase the credibility and accuracy of your carbon inventory report. 

By following the GHG Protocol standards for carbon inventory, base year setting, and science-based targeting, organizations can not only clarify their responsibilities on climate change issues but also contribute to global greenhouse gas reductions and demonstrate leadership in climate action. 

What are the specific stage steps of SBTi from application to implementation to effectiveness? 

The participation process of the Science Based Targets initiative (SBTi) involves multiple stages and steps, from application to implementation to demonstration of results. Here are the specific stages of this process, listed in order: 

1. Commitment to Participate and Sign a Letter of Commitment: 

• Companies first need to sign a letter of commitment to the SBTi, indicating their commitment to setting science-based emission reduction targets. 

2. Establish emission reduction targets for greenhouse gas emissions inventory:

•  Record the company's direct emissions (Scope 1), indirect emissions (Scope 2), and supply chain emissions (Scope 3) in detail.

•  Assess Emission Reduction Potential: Identify emission reduction opportunities and evaluate the potential of different emission reduction measures.

•  Set science-based emission reduction targets: Set short-term and long-term science-based emission reduction targets based on inventory results and emission reduction potential. 

3. Submit Targets for Review Preparation Documents: 

• Prepare the required documents and evidence, including a greenhouse gas emissions inventory report and details of emission reduction targets.

•  Submission of targets to SBTi: Submit the set emission reduction targets and relevant documents to the SBTi for review. 

4. Implement emission reduction strategies and develop implementation plans:

•  Based on the set emission reduction targets, develop specific implementation plans, including required resources, timelines, and responsibility allocation. 

• Implement emission reduction measures: Implement emission reduction measures according to the plan, such as improving energy efficiency, using renewable energy, and optimizing supply chain management.

 5. Monitor progress and report on emission reduction progress:

•  Regularly monitor and evaluate the effectiveness of emission reduction measures, and record changes in greenhouse gas emissions.

•  Report progress to the SBTi: Regularly report to the SBTi on the progress and implementation of emission reductions as required.

 6. Independent Verification of Verification and Communication Effectiveness (Optional): 

• To enhance transparency and credibility, companies can choose to have third-party organizations independently verify their emission reduction effectiveness. 

• Open communication effectiveness: Publicly communicate emission reduction goals and results through corporate sustainability reports, official websites, and other public channels. 

7. Continuous Improvement Evaluation and Adjustment Strategies: 

• Evaluate the effectiveness of emission reduction strategies based on monitoring results and changes in the external environment, and make necessary adjustments. 

• Updated Emissions Reduction Targets: As scientific evidence and technological advancements advance, businesses may need to update their emissions reduction targets to ensure they continue to align with the latest scientific base. 

Through this series of stages and steps, SMEs can not only effectively participate in the SBTi, set and achieve science-based emission reduction targets, but also demonstrate their commitment and effectiveness in climate action on a global scale. 

Science Based Targets initiative (SBTi) 

The relationship between SMEs and the Science Based Targets initiative (SBTi) is an area of increasing importance, especially as we push for sustainable development and net-zero carbon targets globally. The SBTi provides a rigorous framework to help companies set science-based emission reduction targets to meet the Paris Agreement's requirement to limit global warming to 1.5°C. The following is an analysis of the relationship between SMEs and SBTi's international initiatives: 

1. Enhancing Sustainable Competitiveness For SMEs, participating in SBTi is not only an action to combat climate change but also an opportunity to enhance their sustainable competitiveness in the market. By setting and achieving science-based emission reduction targets, SMEs can demonstrate their commitment to sustainability and attract more environmental, social, and governance (ESG) investors and consumers. 

2. Challenges Despite the benefits of participating in SBTi for SMEs, these companies may also face some challenges during the implementation process, including limited resources, lack of expertise, and the feasibility and affordability of emission reduction technologies. Therefore, the SBTi provides SMEs with more flexible participation conditions and support to help them overcome these challenges. 

3. Support and Resources The SBTi provides SMEs with a range of tools, resources, and guidance to support them in setting and achieving science-based emissions reduction targets. This includes emission reduction target setting tools, case studies, training workshops, and dedicated technical support, aiming to lower the barrier to participation and make it easier for small and medium-sized enterprises to join this global initiative. 

4. Impact on Supply Chain SMEs play a crucial role in the global supply chain. In order to achieve their own SBTi targets, large enterprises may require small and medium-sized enterprises in their supply chains to also take corresponding emission reduction measures. This trend has prompted SMEs to start considering how to integrate science-based emissions reduction targets into their business strategies to meet the requirements of upstream partners.

 5. Promote innovation and transformation Participation SBTi not only helps small and medium-sized enterprises reduce their environmental impact but also incentivizes them to innovate in products, services, and operating models. This innovation helps businesses develop new business opportunities while improving their adaptability and resilience in the transition to a low-carbon economy. 

In conclusion, the relationship between SMEs and SBTi is mutually beneficial. Participating in SBTi not only helps small and medium-sized enterprises enhance their sustainable development capabilities, but also helps the global community achieve emission reduction goals and jointly address the challenges of climate change. However, to realize the full potential of this initiative, SMEs need to have access to appropriate support and resources to effectively set and achieve their science-based emission reduction targets. 

According to the official announcement of the Science Based Targets initiative (SBTi), the organization is committed to driving science-based climate action to support global efforts to limit climate warming. Here's a summary of key information taken from their website: 

Background of global climate action 

• Paris Agreement: In 2015, governments around the world adopted the Paris Agreement to limit global temperature rise to 2°C above pre-industrial levels and strive to limit warming to 1.5°C.

•  Grim warning of climate change: In 2018, the Intergovernmental Panel on Climate Change (IPCC) warned that global warming cannot exceed 1.5°C to avoid the catastrophic effects of climate change.

•  Emission reduction target: To achieve this goal, global greenhouse gas emissions must be halved by 2030 and net-zero emissions by 2050. 

The Role of the Private Sector Major Source of Greenhouse Gas Emissions: 

• The private sector is a major source of greenhouse gas emissions, so immediate action is essential. 

• Science-based targeted businesses: Businesses that have set science-based targets are reducing emissions on a large scale, and all businesses must now join the action. 

The Science Based Targets initiative (SBTi) provides a framework to help companies set emissions reduction targets based on the latest scientific evidence to support global efforts to limit the impacts of climate change. By participating in the SBTi, businesses can not only combat climate change but also enhance their competitiveness and sustainability in the global market. For SMEs, participating in the Science Based Targets initiative (SBTi) is an important step that can help them drive sustainability and net-zero carbon goals globally. By setting and achieving science-based emission reduction targets, SMEs can not only combat climate change but also enhance their brand value and market competitiveness, laying the foundation for the long-term success of their businesses. 

The setting relationship between SMEs and the Science Based Targets initiative (SBTi). 

The setting relationship between SMEs and the Science Based Targets initiative (SBTi) involves how SMEs develop and implement science-based emission reduction targets in accordance with the SBTi's framework and guidelines. This process is designed to help SMEs develop science-based goals that align with global goals to reduce greenhouse gas emissions and limit global warming to 1.5°C. Here are the key elements set by SMEs and the SBTi: 

1. Understanding SBTi's requirements The SBTi requires companies to set emission reduction targets that are based on current climate science and can support the achievement of the long-term goal of limiting global warming to 1.5°C under the Paris Agreement. This means that companies' emission reduction targets should be aligned with global carbon budgets, which refer to the total amount of greenhouse gases that can be emitted globally between now and 2100 to meet specific global warming limits. 2. Set emission reduction targets Small and medium-sized enterprises need to set specific emission reduction targets based on their own greenhouse gas emissions and business scope. These targets are usually divided into two types: short-term (achieved within 5-10 years) and long-term (net-zero emissions by 2050). The SBTi encourages companies to set emission reduction targets for Scope 1 (direct emissions), Scope 2 (indirect emissions, such as purchased electricity), and Scope 3 (supply chain emissions).

 3. Submit targets for review Once SMEs have set emission reduction targets, they need to submit them to the SBTi for review. The SBTi's team of experts will assess whether these targets align with its guidelines and requirements, ensuring they are scientifically grounded and ambitious enough. 

4. Implementation and Reporting Once the targets are approved, SMEs need to implement necessary emission reduction measures according to the plan and report progress to the SBTi regularly. This includes providing detailed data on their greenhouse gas emissions, as well as the effectiveness of the actions taken to reduce emissions. 

5. Support and resources To help SMEs successfully set and achieve science-based emissions reduction targets, the SBTi provides a range of tools, guidelines, and resources. These resources are designed to help businesses understand and address the challenges they may encounter in setting and achieving emission reduction targets. 

In conclusion, the establishment of SMEs and the SBTi is a process aimed at promoting science-based climate action by businesses. By participating in SBTi, SMEs can not only combat climate change but also enhance their competitiveness and sustainability in the global market. 

What preparations should small and medium-sized enterprises make to participate in SBTi target setting? 

Participating in the Science Based Targets initiative (SBTi) target-setting process requires a series of preparations to ensure that their emission reduction targets are both realistic and science-based. Here are the key preparations that SMEs should make before participating in target setting: 

1. Understand the requirements and guidelines of the SBTi First, companies need to have a deep understanding of the requirements and guidelines of the SBTi, including the definition of greenhouse gas emissions in different scopes (Scope 1, Scope 2, and Scope 3), and how to set science-based emission reduction targets that align with the 1.5°C temperature rise pathway. 

2. Conduct a greenhouse gas emissions inventory SMEs need to conduct a comprehensive inventory of their current greenhouse gas emissions, including direct emissions (Scope 1), indirect emissions (Scope 2), and supply chain emissions (Scope 3). This requires collecting and analyzing relevant data on energy consumption, production processes, logistics activities, and more. 

3. Assess Emission Reduction Potential and Strategies Businesses should evaluate their emission reduction potential, including identifying possible emission reduction measures, technological improvements, and energy efficiency enhancement opportunities. Additionally, long-term and short-term emission reduction strategies, as well as the resources and investments required to implement them, should be considered. 

4. Formulate science-based emission reduction targets Based on greenhouse gas emission inventory and emission reduction potential assessment, companies need to set specific, quantitative short-term and long-term emission reduction targets. These targets should comply with SBTi requirements and align with the global temperature limit of 1.5°C. 

5. Prepare documents and evidence to submit to the SBTi Businesses need to prepare a complete set of documents and evidence to support the effectiveness and feasibility of their emission reduction targets. This may include greenhouse gas emissions inventory reports, emission reduction strategies and plans, and methods for how progress is monitored and reported. 

6. Consider Stakeholder Engagement Successfully setting and achieving science-based emissions reduction targets requires broad stakeholder engagement, including employees, suppliers, customers, and investors. Businesses should consider how to communicate their climate action commitments and encourage stakeholder support and engagement. 

7. Plan for ongoing monitoring and reporting Finally, companies need to establish a system to continuously monitor their greenhouse gas emissions and the effectiveness of their mitigation measures, and regularly report progress to the SBTi and other stakeholders. 

Through these preparations, SMEs can play an active role in global efforts to combat climate change by ensuring that the science-based emissions reduction targets they set are both realistic and ambitious. 

What are the benefits of participating in SBTi targeting? 

Participating in the Science Based Targets initiative (SBTi) and setting science-based emission reduction targets can bring multifaceted benefits, not only helping to combat climate change but also enhancing their market competitiveness and financial performance. Here are the key benefits of SMEs participating in SBTi's target-setting targets: 

1. Enhanced Brand Value and Corporate Image By committing to achieving science-based emission reduction targets, SMEs can demonstrate their commitment to climate change actions, thereby enhancing their brand value and corporate image. This helps attract more consumers and investors who are concerned about environmental, social, and governance (ESG) issues. 

2. Enhanced Investor and Customer Confidence Setting and openly science-based emissions reduction targets can enhance investor and customer confidence in a business, as it demonstrates that a business is actively managing its environmental risks and is committed to long-term sustainability. 

3. Improved Operational Efficiency and Cost Savings Implementing emission reduction measures often comes with energy efficiency improvements and resource use optimization, which not only helps reduce greenhouse gas emissions but also reduces energy and raw material costs, thereby improving operational efficiency and achieving cost savings. 

4. Enhancing Market Competitiveness Participating in the SBTi and setting science-based emission reduction targets can help SMEs stand out in a growing market that requires suppliers to be environmentally responsible, enhancing their market competitiveness. 

5. Fostering Innovation and New Business Opportunities Pursuing emission reduction targets prompts businesses to seek innovative solutions to reduce their environmental impact. This innovation is not limited to product and service improvements, but also includes innovation in business models, thereby opening up new business opportunities and markets. 

6. Addressing the risk of changes in policies and regulations As global action on climate change intensifies, the pressure on companies to reduce greenhouse gas emissions is increasing. Setting and implementing science-based emission reduction targets in advance can help small and medium-sized enterprises better cope with these changes and reduce related compliance risks. 

7. Strengthen supply chain sustainability For SMEs that play a key role in the supply chain, setting science-based emission reduction targets and implementing corresponding measures can improve the sustainability of the entire supply chain and meet the requirements of large partners. 

In conclusion, SMEs' participation in SBTi and setting science-based emission reduction targets are not only important contributions to global climate action but also key strategies to enhance their own competitiveness, innovation capabilities, and adaptability to future market changes. 

Steps for SMEs to participate in SBTi application review? 

Small and medium-sized enterprises (SMEs) participate in the SBTi application review, and the following is a summary of the service step process based on the procedures published on the SBTi platform 

Throughout the process, from commitment to goal setting, submission, target review and approval, to public communication and disclosure, every step is a reflection of the company's commitment to sustainable development and climate action. Through these stages, companies not only demonstrate their responsibility to reduce the impact of climate change but also demonstrate their contribution to achieving global climate goals. In addition, participating in SBTi is not only a demonstration of commitment to the outside world but also a driving force for internal strategic adjustment and innovation, prompting companies to find and implement effective ways to reduce carbon emissions. 

A. Commitment

 A1. Understanding the requirements: Businesses first need to understand the requirements and processes of the SBTi. 

A2. Internal Preparation: Organize internal training and establish cross-departmental collaboration, gaining buy-in from key internal stakeholders. 

A3. Submit a Pledge: Submit a commitment letter through the SBTi's website, formally indicating your readiness to set science-based emissions reduction targets. 

• Content: Businesses submit commitments through the SBTi's website, indicating their readiness to set science-based emissions reduction targets. 

• Time: 1-2 months 

• KPI: Complete the commitment submission and gain support from key internal stakeholders. 

• SBTi Fee: No fee is paid. 

B. Develop a Target 

B1. Inventory Baseline Emissions: Calculate the company's greenhouse gas emissions in the baseline year. 

B2. Choose the type of emission reduction target: Choose an absolute or intensive emission reduction target based on the company's emission characteristics and strategy. 

B3. Utilize tools to set targets: Utilize the tools and guidelines provided by the SBTi to determine emission reduction targets. 

• Content: 

1.Calculate the owner's baseline emissions, select the type of reduction target, and determine the reduction target using the SBTi's tools and guidelines. 

2.Companies need to measure their baseline year greenhouse gas emissions, including direct (Scope 1), indirect (Scope 2) and, if applicable, upstream and downstream value chain emissions (Scope 3)

3. The science basis for emission reduction targets and how to set emission reduction targets that align with the 1.5°C warming pathway. According to the SBTi's standards, SMEs should set reduction targets that cover at least Scope 1 and Scope 2 emissions, and encourage the inclusion of significant Scope 3 emissions if they account for more than 40% of total emissions.

•  Time: 3-6 months 

• KPIs: 

1.Complete baseline emissions calculations. 

2.Identify and document emission reduction targets, including quantified targets, target years, and baseline years. 

• SBTi Fee: No direct fee. 

C. Submit 

C1. Prepare Documents: Organize and prepare all necessary documents, including details of emission reduction targets and baseline year calculations.

 C2. Online Submission: Submit emission reduction targets and related documents through the SBTi platform, and pay the corresponding SBTi fees.

 C3. Wait for review: Wait for SBTi review after submission, which may need to be adjusted based on feedback. 

C4. Receive feedback: Receive feedback from the SBTi on the review of the submitted materials and make adjustments if necessary.

•  Content: Submit emission reduction targets and related documents through the SBTi platform. 

• C1-C2 Time: 1-2 months 

• C3-C4 Time: 3-6 months 

• Wait for SBTi's review and response, including possible feedback and adjustment phases. 

• KPI: Successfully submit emission reduction targets and related documents online, and pay the corresponding fees. 

• SBTi Fee: 

1.The fee for submitting a new short-term target or replacing a previous short-term target is $1,250. 

2.The fee for setting only the new net-zero target is $1,250. 

3.The fee for setting both short-term goals and net-zero targets is $2,500. 

D. Target Review and Approval (Time included in C3-C4) 

D1. Wait for SBTi Feedback: After submitting all necessary documents, businesses need to wait for SBTi's initial review feedback on their objectives. 

D2. Respond to Feedback: Based on SBTi feedback, businesses may need to provide additional information or adjust their objectives. 

D3. Approval: After completing all necessary adjustments, the company's emissions reduction targets are officially approved by the SBTi. 

• After the "submission" stage is completed, the SBTi conducts a detailed review of the submitted objectives and documents. 

• Companies may need to adjust their emission reduction targets based on SBTi feedback.

•  Once the target is approved by the SBTi, it indicates that the company's emission reduction targets are in line with science and are considered effective in contributing to the global response to climate change. 

E. Proof of Submission 

E1. Confirmation of Receipt: Businesses will receive a formal approval confirmation email from the SBTi, demonstrating that their emission reduction targets have been reviewed and accepted. 

E2. Obtain a certificate or logo: Businesses may receive a certificate or mark of commitment as proof of their success in setting science-based emission reduction targets. 

E3. Publicly Listed on the SBTi Website: The name of the business and its approved emission reduction targets will be publicly displayed on the SBTi's official website.

•  Once a business's target is approved, it will be publicly listed on the SBTi's website, proving that its objectives have been recognized. 

• Businesses will also receive a confirmation email and may receive a certificate or logo published on the SBTi website as proof of their participation in the SBTi. 

• Time: 1 month 

F. Communicate 

F1. Internal Strategy Meetings: Conduct internal meetings to ensure that all key departments and employees understand the company's SBTi commitments and their importance. 

F2. Publish Internal Communications: Widely disseminate commitments and goals through internal communication channels, such as employee newsletters or intranets. 

F3. External PR Activities: Announce its SBTi commitments and targets externally through press releases, social media, and company websites. 

F4. Customer and Supplier Communication: Strengthen partnerships by sharing the company's climate action commitments with key customers and suppliers. 

• Content: Disclose the owner's commitments and goals through press releases, websites, social media, and other channels. 

• Time: 1-3 months

•  KPIs: Publish at least one external communication to introduce the company's SBTi commitments and goals.

•  SBTi Fee: No direct fee. 

G. Disclose 

G1. Prepare annual progress reports: Summarize the progress made in achieving goals over the past year and prepare detailed reports. 

G2. Report progress through CDP: Submit annual progress reports to public disclosure platforms like CDP to ensure transparency. 

G3. Update Company Website and Social Media: Update information on climate action progress on company websites and social media to share results with the public and stakeholders.

 G4. Public commitment: Once the target is approved, companies need to make their commitments public on public platforms (such as their own website or SBTi's website) and report on progress regularly. 

• Content: Complete annual progress reports and disclose emission reduction progress through public platforms such as CDP. 

• KPIs: Completion of annual progress reports and public disclosure through CDP or other platforms. 

• SBTi Fee: No direct fee. 

H. Continuous Improvement and Recommitment

 H1. Performance Evaluation: Regularly assess the discrepancy between actual emission reduction achievements and targets to identify areas for improvement. 

H2. Target Update: Reset or update emission reduction targets based on the latest climate science developments and actual corporate performance.

 H3. Recommit: If necessary, continue to demonstrate corporate commitment to science-based climate action by resubmitting updated emission reduction targets through the SBTi. 

H4. Internal and External Communication Updates: Communicate updated goals and commitments to internal employees and external stakeholders, maintaining transparency and engagement. 

• KPIs and Acceptance Indicators Completed at Each Stage (Continued) 

Update and Adjust Targets (if applicable): Over time, companies may need to update or adjust their emission reduction targets based on their actual emission reduction progress and changes in the external environment. This is not part of the initial application process but is an important consideration for businesses that have been involved in the SBTi for a long time. 

• KPIs: Regularly (e.g., every two years) review and update emission reduction targets to ensure they meet the latest scientific data and SBTi requirements. 

Through this series of steps, companies not only demonstrate their commitment to combating climate change but also set and achieve emission reduction targets through a science-based approach. This process not only helps companies make substantial progress in sustainable development but also enhances their competitiveness and brand value in the market. 

Is there a need for third-party verification of the process of small and medium-sized enterprises (SMEs) participating in the Science Based Targets initiative (SBTi)? 

The Science Based Targets initiative (SBTi) provides a set of standards and processes for companies to set emission reduction targets, but for small and medium-sized enterprises (SMEs), the participation process is designed to be relatively simplified to encourage more SMEs to participate and commit to reducing greenhouse gas emissions. As far as current standards and guidelines are concerned, the SBTi itself does not require companies to conduct third-party verification when submitting emission reduction targets. The emission reduction targets submitted by companies go through the SBTi review process to ensure that the targets are scientific and ambitious.

 However, it is a good practice to use third-party verification for emission reduction progress reports and actual emission reduction results, especially when companies need to demonstrate their reduction effectiveness to external stakeholders, such as investors, customers, or regulators. Third-party verification can increase the transparency and credibility of reports, helping to improve the company's trust in external stakeholders.

 SBTi does not require SMEs to conduct third-party verification 

Although the SBTi does not require SMEs to conduct third-party verification as a condition of participation, companies may choose to conduct it due to their own strategic considerations or external requirements. This step strengthens the reliability of corporate sustainability reporting, helps build trust with stakeholders, and supports the company's sustainability goals in the long run. 

Example of the SBTi Membership Registration Platform

This figure reflects the results of the reduction-intensity reasonableness assessment conducted within the official SBTi Target Setting and Validation System (Validation Portal) after the company completed the submission of its near-term emissions reduction targets for Scope 1 and Scope 2. The assessment compares the company’s proposed reduction level against the standardized cross-sector decarbonization pathways adopted by SBTi under a 1.5°C-aligned climate scenario.

Under SBTi requirements, near-term targets must be set on an absolute emissions basis and must achieve a level of reduction consistent with limiting global temperature rise to 1.5°C. Through its built-in emissions pathway modeling mechanism, the system calculates the minimum reduction required for the company over the specified target period (currently approximately 42% for cross-sector pathways) and uses this benchmark to determine whether the target is science-aligned.

The results shown in this figure indicate that the company’s near-term decarbonization target has successfully passed SBTi’s technical assessment of reduction intensity. This confirms that the company’s commitment goes beyond nominal disclosure and is aligned with a concrete, verifiable science-based decarbonization pathway, meeting the requirements for subsequent third-party review and formal validation.

This figure presents the results of the quantitative compliance assessment of emissions coverage conducted within the official SBTi (Science Based Targets initiative) Validation Portal after the company completed the submission of its long-term net-zero target. The assessment is performed in accordance with the SBTi Corporate Net-Zero Standard and is intended to verify whether the proposed net-zero target demonstrates sufficient completeness in terms of its emissions boundary.

Under SBTi requirements, a company’s long-term net-zero target must cover at least 95% of Scope 1 and Scope 2 emissions, and more than 90% of Scope 3 emissions, in order to ensure that the net-zero commitment meaningfully reflects the major sources of greenhouse gas emissions across both the company’s operations and its value chain.

As shown in the figure, the company achieves 100% emissions coverage for Scope 1 and Scope 2, clearly exceeding the minimum 95% threshold required by SBTi. In parallel, Scope 3 emissions coverage reaches 99%, surpassing the minimum 90% requirement specified for long-term net-zero targets. These results indicate that, in setting its long-term net-zero target, the company has incorporated nearly all direct emissions, energy-related indirect emissions, and key value chain emissions into its reduction and neutralization planning. This demonstrates full alignment with SBTi’s core requirements for boundary completeness, technical auditability, and international consistency in long-term target setting.

This figure presents the results of the quantitative compliance verification of the emissions reduction ambition for the company’s Scope 3 target, as assessed within the official SBTi (Science Based Targets initiative) Validation Portal. The assessment is conducted in accordance with SBTi-approved climate mitigation pathways and evaluates whether the defined reduction level meets science-based requirements and remains aligned with global temperature-limitation goals.

Under SBTi requirements, when setting a Scope 3 emissions reduction target, the level of reduction must at least meet the minimum threshold calculated by the system based on the selected base year, target year, and applicable climate scenario. This ensures consistency, comparability, and alignment with science-based pathways. As illustrated by the slider in the figure, the SBTi system calculates a minimum required reduction rate of 25% (Min. 25.0%), indicating that Scope 3 emissions must be reduced by at least this proportion under the defined target conditions in order to satisfy the minimum ambition requirement.

The figure also shows that the company has set a Scope 3 reduction ambition of 100%, which significantly exceeds the minimum threshold established by SBTi. This result indicates that the company has adopted a level of ambition well beyond basic compliance for its Scope 3 target. The ambition level not only passes the SBTi system assessment but also demonstrates a strong commitment to substantive value chain emissions management and long-term decarbonization responsibility.

This figure presents the dual quantitative assessment conducted within the SBTi (Science Based Targets initiative) Validation Portal for the company’s near-term emissions reduction targets covering Scope 1 and Scope 2. The assessment comprises two core review elements: emissions coverage and reduction ambition.

In terms of emissions coverage, the figure shows that the company has fully included Scope 1 emissions of 22.49 tCO₂e and Scope 2 (location-based) emissions of 333.46 tCO₂e within the defined target boundary. Emissions coverage for both Scope 1 and Scope 2 reaches 100%, exceeding the minimum 95% coverage threshold required by SBTi for near-term targets. This confirms compliance with SBTi requirements for the comprehensive inclusion of direct emissions and energy-related indirect emissions.

With respect to reduction ambition, the Ambition assessment section indicates that the SBTi system has automatically calculated a minimum required reduction rate of 90% (Min. 90%) based on a 1.5°C temperature-alignment scenario. The company’s selected reduction ambition is 100%, which exceeds the minimum requirement. This demonstrates that the company’s near-term Scope 1 and Scope 2 targets not only meet but surpass SBTi’s ambition criteria aligned with the 1.5°C pathway.

Overall, this figure verifies that the company’s near-term Scope 1 and Scope 2 targets are fully compliant with SBTi’s scientific and technical standards across both boundary completeness and reduction stringency, providing a robust and science-based foundation for successful target validation.

This figure reflects the emissions coverage compliance assessment conducted within the SBTi (Science Based Targets initiative) Validation Portal after the company completed the submission of its near-term emissions reduction target (Near-term target, target year 2030). The assessment evaluates whether emissions across all scopes are comprehensively included within the defined target boundary, in line with SBTi requirements for emissions completeness.

For Scope 1 and Scope 2, the company applies the Absolute – Cross-Sector methodology, using 2022 as the base year and 2030 as the target year. All direct emissions and energy-related indirect emissions are fully included within the near-term target boundary, resulting in a combined Scope 1 and Scope 2 emissions coverage of 100%. This clearly exceeds the minimum 95% coverage threshold stipulated by SBTi.

With respect to Scope 3 (value chain emissions), the results indicate that the company has fully incorporated the identified material Scope 3 categories into its near-term target boundary. Overall Scope 3 emissions coverage also reaches 100%, exceeding the minimum coverage requirement of at least 67% set by SBTi for near-term Scope 3 targets, which applies to companies for which Scope 3 emissions represent a significant share of total emissions.

Overall, the assessment demonstrates that, at the near-term target stage, the company meets SBTi’s requirements for both comprehensive inclusion of operational emissions and high coverage of value chain emissions. This confirms that the company’s decarbonization planning extends beyond internal operations to encompass its broader value chain, meeting SBTi’s standards for completeness, robustness, and validation readiness.

This figure reflects the results of the institutional assessment of emissions reduction ambition conducted within the official SBTi Validation Portal for the company’s Scope 3 near-term emissions reduction target. The purpose of this assessment is to determine whether the reduction intensity defined in the Scope 3 target meets the minimum science-based ambition threshold required by SBTi.

According to the SBTi Corporate Net-Zero Standard, when Scope 3 emissions represent a significant proportion of a company’s total emissions, the near-term Scope 3 target must not only satisfy emissions coverage requirements but must also meet the minimum ambition threshold defined by SBTi. For most cross-sector companies, this threshold typically corresponds to a minimum reduction intensity of at least 25%, ensuring that the Scope 3 decarbonization pathway is aligned with SBTi-approved climate scenarios.

As shown in the figure, the “Min. 25.0%” value represents the minimum qualifying ambition level automatically calculated by the SBTi system based on the selected base year, target year, and applicable scenario. The company’s submitted ambition level is displayed as 100%, indicating that its Scope 3 near-term target fully meets and clearly exceeds the minimum requirement established by SBTi.

Overall, this assessment demonstrates that the company’s Scope 3 near-term target goes beyond the formal inclusion of value chain emissions and ensures that the reduction intensity itself is aligned with science-based mitigation pathways. As such, the target provides a substantive and technically robust basis for passing SBTi’s official validation review.