SBTi Targets for Indian Companies - How to Set Science-Based Targets

The Science Based Targets initiative (SBTi) provides a framework for companies to set emission reduction targets aligned with climate science. Over 7,000 companies globally have committed to SBTi, including major Indian firms like Wipro, Infosys, and Mahindra. To align with a 1.5-degree Celsius pathway, companies must reduce Scope 1 and 2 emissions by at least 4.2% per year, and net-zero targets require at least 90% total emission reductions by 2050.

If your company is navigating BRSR reporting, fielding ESG questionnaires from global investors, or responding to CDP disclosures, you have likely encountered the term "science-based targets." But what exactly does SBTi require, how does the validation process work, and why are Indian companies increasingly adopting it?

This guide walks through everything Indian companies need to know about SBTi - from understanding the different target types to navigating the validation process and connecting SBTi to existing Indian ESG frameworks.

What Is SBTi?

The Science Based Targets initiative (SBTi) is a partnership between four organizations: CDP (formerly Carbon Disclosure Project), the United Nations Global Compact (UNGC), the World Resources Institute (WRI), and the World Wide Fund for Nature (WWF). Launched in 2015, SBTi defines and promotes best practice in science-based target setting for corporate greenhouse gas emission reductions.

A science-based target is an emission reduction goal that is consistent with what climate science says is necessary to limit global warming to 1.5 degrees Celsius above pre-industrial levels - the most ambitious goal of the Paris Agreement. Unlike arbitrary "reduce by 20%" targets, SBTi targets are grounded in carbon budgets derived from climate models.

SBTi does not prescribe how a company should reduce emissions. It validates whether a company's targets are ambitious enough to align with climate science. The "how" - whether through renewable energy, process efficiency, fuel switching, or supply chain engagement - is left to the company.

Why SBTi Matters for Indian Companies

SBTi adoption in India has accelerated significantly since 2022. Several factors are driving this trend:

• Investor expectations: Global ESG investors and rating agencies (MSCI, Sustainalytics, ISS) increasingly treat SBTi-validated targets as a key indicator of climate credibility. Indian companies listed on international exchanges or raising foreign capital face direct questions about science-based targets.
• CSRD alignment: The EU's Corporate Sustainability Reporting Directive (CSRD) requires EU companies to report on their value chain's climate targets. If your company supplies to EU customers, having SBTi-validated targets makes you a preferred supplier in their CSRD disclosures.
• Competitive advantage: In sectors like IT services, pharmaceuticals, and automotive components, Indian companies compete against peers from countries where SBTi adoption is mainstream. Having validated targets signals climate maturity to global procurement teams.
• CDP connection: SBTi was co-founded by CDP, and the two frameworks are deeply integrated. Companies that report through CDP and have SBTi-validated targets score higher in CDP assessments - which directly influences investor decisions and customer procurement criteria.
• BRSR enhancement: While BRSR does not mandate SBTi, having science-based targets strengthens the "Leadership Indicators" section of BRSR Core, particularly around climate transition planning.

Near-Term vs Long-Term vs Net-Zero Targets

SBTi defines three distinct types of targets. Understanding the differences is essential before you begin the target-setting process.

Near-term targets are the entry point. Every company that commits to SBTi must set and validate near-term targets first. These require reducing Scope 1 and 2 emissions by at least 4.2% per year to align with the 1.5-degree Celsius pathway. If your Scope 3 emissions represent more than 40% of your total emissions, you must also set a Scope 3 target.

Net-zero targets go further. Under the SBTi Corporate Net-Zero Standard, companies must commit to reducing emissions by at least 90% across all scopes by 2050. The remaining residual emissions (up to 10%) must be neutralized through permanent carbon removal - not conventional offsets. This is a critical distinction from general net-zero vs carbon-neutral claims.

The SBTi Validation Process

The SBTi validation process follows five steps, typically taking 6 to 12 months from commitment to final validation.

Step 1: Commit (Month 1)

Submit a commitment letter to SBTi, signed by a senior executive (CEO or equivalent). This publicly signals your company's intention to set science-based targets. Once committed, you have 24 months to submit targets for validation. Your company appears on the SBTi website as "committed."

Step 2: Develop Targets (Months 2-6)

This is the most intensive phase. Your team needs to complete a comprehensive GHG inventory covering Scope 1, 2, and 3 emissions. Using the SBTi target-setting tool and sector-specific guidance, develop targets that meet the minimum ambition criteria (4.2% per year for 1.5-degree alignment). Choose a base year, define the target boundary, and select your target type (absolute or intensity-based).

Step 3: Submit for Validation (Month 6-7)

Submit your targets through the SBTi online platform along with supporting documentation - your GHG inventory, target calculations, methodology choices, and any sector-specific data. Pay the validation fee (USD 1,000 to USD 14,500 based on annual revenue).

Step 4: Validation Review (Month 7-10)

The SBTi technical team reviews your submission against the criteria. This typically takes approximately 30 business days. You may receive feedback requesting clarifications or revisions. Most companies go through at least one round of revisions before approval.

Step 5: Disclose and Track (Ongoing)

Once validated, your targets are published on the SBTi website. You are expected to disclose progress annually - most companies do this through CDP reporting, BRSR, or their sustainability reports. SBTi requires target revalidation every five years to ensure continued alignment with the latest climate science.

SBTi Requirements by Scope

Understanding how SBTi treats each emission scope is critical for target development. Here is what the framework requires:

Scope 1 and 2 (Mandatory)

All companies must set targets for Scope 1 (direct) and Scope 2 (purchased energy) emissions. The minimum ambition for 1.5-degree alignment is a 4.2% absolute reduction per year from the base year. Companies can choose between absolute targets (total emissions reduction) or sector-specific intensity targets for certain sectors (e.g., power generation, cement).

Scope 3 (Conditional)

If your company's Scope 3 emissions represent more than 40% of total Scope 1, 2, and 3 emissions, you must set a Scope 3 target. For most Indian companies - especially in IT services, FMCG, and manufacturing - Scope 3 represents the majority of total emissions, making this requirement effectively mandatory. The Scope 3 target must cover at least 67% of total Scope 3 emissions.

Scope 3 targets can be absolute or intensity-based, and the minimum ambition is "well below 2 degrees Celsius" alignment. Conducting a materiality assessment helps identify which Scope 3 categories are most significant for your company.

Indian Companies with SBTi Targets

Several major Indian companies have already committed to or validated science-based targets, setting a precedent for the market:

• Wipro: One of the earliest Indian companies to have SBTi-validated targets, committing to near-term and net-zero goals across its global operations
• Infosys: Validated SBTi targets aligned with 1.5 degrees, building on its carbon-neutral status since 2020
• Mahindra Group: Committed to SBTi across multiple business verticals including automotive and farm equipment
• Dalmia Cement: Among the first cement companies globally to commit to SBTi, demonstrating that even hard-to-abate sectors can set science-based targets
• Tech Mahindra, HCL Technologies, Biocon: Additional Indian companies that have joined the SBTi commitment, representing IT services and life sciences

The growing list signals to the broader Indian corporate ecosystem that SBTi is not just for multinational corporations. Mid-sized companies in sectors like textiles, chemicals, and auto components are increasingly exploring SBTi as a way to strengthen their positioning with global buyers.

"Science-based targets show companies how much and how quickly they need to reduce their greenhouse gas emissions to prevent the worst effects of climate change." - Science Based Targets initiative, sciencebasedtargets.org

SBTi and Indian ESG Frameworks

SBTi does not exist in isolation. For Indian companies, it connects to multiple reporting and disclosure frameworks. Understanding the overlaps helps avoid duplicate effort:

The practical implication: if you are already reporting through BRSR and CDP, you likely have most of the data needed for SBTi target development. The incremental effort is in structuring that data into SBTi's target framework and going through the validation process.

How to Get Started - 5 Practical Steps

Frequently Asked Questions