Driving Decarbonisation: SBTi Aligned Reduction Actions and NetZero Trajectories

Introduction

Corporate climate pledges are increasingly scrutinised. To avoid accusations of greenwashing, businesses need credible, science-based plans that demonstrate how they will cut greenhouse gas (GHG) emissions quickly and permanently. The Science Based Targets initiative (SBTi) offers the world’s only corporate NetZero Standard. This framework requires near and long-term targets consistent with limiting global warming to 1.5 °C. Under the standard, companies must halve value chain emissions by around 2030 and cut more than 90 % before 2050. Residual emissions that cannot be eliminated must be neutralised via permanent carbon. This guide unpacks the terminology (Scopes 1–3, SBTi, netzero), explains key reduction actions, introduces monitoring tools and KPIs, and suggests dashboard enhancements for tracking a netzero trajectory.

Defining Scope 1, 2 and 3 Emissions

An organisation’s GHG inventory is split into three scopes:

Scope 1 (Direct emissions) – emissions from sources a company owns or controls directly, such as burning fuel in company.

Scope 2 (Indirect, purchased energy) – emissions resulting from the generation of electricity, heat or steam that the company purchases and uses.

Scope 3 (Other indirect) – emissions across the value chain not produced by the company and not included in scope 2, such as emissions from suppliers and the disposal of products. These emissions often form the majority of a company’s footprint and are harder to reduce.

Understanding these scopes allows companies to map where emissions occur and design targeted reduction actions. The GHG Protocol requires that near-term SBTi targets cover at least 95 % of Scope 1 and 2 emissions, while Scope 3 targets must cover a minimum 67 % of total Scope 3 emissions when Scope 3 contributes more than 40 % of total emissions.

Why Science Based Targets?

The SBTi’s Corporate NetZero Standard provides four pillars:

Near-term targets: Businesses must achieve rapid, deep cuts to direct and indirect value chain emissions, roughly halving emissions before 2030.

Long-term targets: Companies must reduce emissions by over 90 % by 2050.

Neutralise residual emissions: After the long-term target, remaining emissions (<10 %) must be permanently removed and stored.

Beyond value chain mitigation: Organisations are encouraged to invest in emission reductions beyond their value chain (e.g., climate finance, nature-based solutions) while pursuing their own targets.

These criteria ensure that net-zero pledges focus on real emission reductions rather than reliance on offsets. To meet near-term targets, SBTi’s cross-sector absolute reduction approach requires companies with a 2020 base year to reduce Scope 1 and 2 emissions by 4.2 % per year (≈42 % by 2030) and Scope 3 emissions by 2.5 % per year (≈25 % by 2030).

Charting a NetZero Trajectory: From Baseline to 2030

Baseline, Growth Forecast and Wedge Analysis

An effective decarbonisation roadmap begins with a baseline year—often the most recent year with complete data. Organisations then forecast a business-as-usual growth scenario to illustrate how emissions might evolve if no action is taken. The carbon wedge analysis pioneered by Princeton’s Carbon Mitigation Initiative divides the gap between the growth scenario and the target into wedges representing reduction measures. For the City of Issaquah, for example, the wedge diagram plotted a growth line and a target line; the triangular area between them represented the emissions reductions needed. The area was subdivided into two triangles: emissions growth to be avoided and reductions below the base year. The diagram was further divided into slices (wedges), each representing a specific reduction action. This approach helps decision-makers prioritise actions and visualise progress.

Example 2030 Projection

Consider a manufacturing company with a 2020 baseline and a goal to reduce absolute GHG emissions 50 % by 2030. Using a wedge chart:

Growth forecast: Based on projected output growth, emissions would rise from 100 tCO₂e in 2020 to 130 tCO₂e by 2030 under a business-as-usual scenario.

Reduction target: To reach 50 tCO₂e in 2030, the company must avoid 80 tCO₂e compared with the growth forecast.

Wedges: The gap can be divided into five reduction measures: energy efficiency improvements (20 %), renewable electricity procurement (30 %), electrification of fleets and equipment (10 %), supplier engagement to reduce Scope 3 (15 %), and process optimisation/waste reduction (5 %). Each wedge’s area reflects the expected emissions reduction from that action.

While the exact percentages vary by sector, the illustration shows how a dashboard can visualise the incremental impact of each measure and highlight whether the company is on track. When combined with cost data, the wedges help prioritise high-impact, cost-effective actions.

Key Reduction Actions Recognised by the SBTi

1. Renewable Electricity Procurement

Scope 2 emissions can be reduced through renewable electricity procurement. The GHG Protocol defines two approaches for calculating Scope 2 emissions—the location-based approach (grid average factors) and the market-based approach (supplier specific or contractual instruments. For near-term SBTs, companies may set renewable electricity procurement targets instead of percentage reduction targets. Procurement targets are considered science-based when they align with sourcing 80 % renewable electricity by 2025 and 100 % by 2030. Companies that already source renewable electricity above these thresholds must maintain or increase their share.

2. Energy Efficiency and Electrification

Reducing energy use and improving process efficiency cut emissions across scopes. Example Corp., cited in the SBTi Corporate Manual, achieved a 12 % reduction in Scope 1 emissions by converting internal combustion vehicles and propane forklifts to electric alternatives and increased manufacturing energy efficiency by 9 % between 2018 and 2022. The company simultaneously entered renewable electricity purchase agreements, increasing its share of renewable electricity from 20 % in 2018 to 100 % by 2025. These examples highlight that electrifying fleets, upgrading equipment and optimising facility operations yield immediate reductions in both Scope 1 and Scope 2 emissions.

3. Phasing Out FossilFuel Installations and Upgrading Buildings

The SBTi’s buildings sector roadmap requires companies to publicly commit to stop installing fossil fuel heating, cooking, power generation and hot water equipment by 2030. It also urges organisations to:

Reduce operational emissions: In partnership with the Carbon Risk Real Estate Monitor (CRREM), the SBTi developed regional pathways reflecting power grid.

Reduce embodied emissions: With floor area expected to grow 15 % by 2030, companies should set targets for emissions from materials, manufacturing, transportation and construction.

Retrofit existing buildings: Since about 80 % of buildings today will still be standing in 2050, improving energy efficiency and decarbonising existing structures is critical.

These measures combine technology (heat pumps, efficient lighting, smart controls) and behavioural changes to lower building-related emissions.

4. Supply Chain Engagement (Scope 3)

Supply chain emissions are often the largest source of emissions and can be 11.4 times larger than direct emissions. Because companies have limited control over suppliers, the SBTi developed supplier engagement targets. These targets involve selecting suppliers responsible for the majority of Scope 3 emissions, encouraging them to set their science-based targets, and providing resources to decarbonise. Supplier engagement improves efficiency, transparency and resilience across the value chain. Companies must conduct a Scope 3 inventory, identify significant categories and ensure that near-term Scope 3 targets cover at least 67 % of total Scope 3 emissions.

5. Cross-Sector Absolute Emission Reductions

Under the SBTi’s cross-sector absolute reduction approach, companies with a 2020 base year must reduce Scope 1 and 2 emissions by 42 % by 2030 and Scope 3 emissions by 25 %. These targets provide a minimum baseline and can be exceeded via sector-specific guidance.

6. Beyond Value Chain Mitigation and Neutralisation

After reducing emissions as much as possible, companies must neutralise residual emissions through permanent carbon removal (e.g., direct air capture, afforestation) to reach. The SBTi also encourages beyond-value-chain mitigation, whereby companies invest in projects outside their direct value chain, such as community renewable energy or nature-based solutions.

Tools and KPIs for Ongoing Monitoring

Modern climate strategy requires continuous monitoring, data management and transparent reporting. Tools like Sustainzone, carbon accounting platforms (e.g., Persefoni, Plan A) and energy management systems can collect emissions data across scopes, model reduction measures and track progress against SBTi milestones. Effective monitoring relies on Key Performance Indicators (KPIs) tailored to a company’s activities and net-zero roadmap.

KPI Categories and Examples

KPI category Example metrics (phrases; no long sentences) Carbon emissions reduction Total GHG emissions; emission intensity (e.g., tCO₂e per unit of product)Energy efficiency Energy consumption per unit of output; energy intensity (kWh per tonne/product); share of nonrenewable vs renewable energyRenewable energy usage Percentage of energy from renewables; installed renewable capacityWaste management Waste sent to landfill; recycling rate; waste reduction per unitWater usage Water consumption per unit; water recycling rateSupplychain sustainability Supplier emissions; percentage of spend with suppliers having SBTs; sustainable sourcing percentageEmployee engagement & training Percentage of workforce trained in sustainability practices; participation in green initiativesInnovation & R&D R&D spending on sustainability; number of sustainable innovations implementedRegulatory compliance Compliance rate with environmental regulations; number of environmental violationsFinancial performance related to sustainability Cost savings from efficiency measures; revenue from sustainable products

These KPIs should be tracked for each scope and across business units. The Task Force on Climate-Related Financial Disclosures (TCFD) recommends disclosing metrics used to assess climate-related risks and opportunities, including Scope 1, 2 and 3 emissions and related targets. Organisations should disclose both absolute emissions and efficiency ratios, provide historical data for trend analysis, and include forward-looking metrics consistent with their strategic time horizons.

Monitoring Tools and Digital Dashboards

Digital platforms can automate data collection from meters, procurement systems and suppliers, converting activity data into GHG emissions using accepted emission factors. The dashboard should enable users to:

Visualise the trajectory: Plot baseline emissions, business-as-usual growth and the emission reduction wedges (e.g., energy efficiency, renewables, electrification, supplier engagement). Wedge charts clearly show how each measure contributes to the overall target.

Model reduction measures: Allow users to adjust assumptions (e.g., energy efficiency percentage improvement, renewable procurement share) and immediately see the impact on emissions and costs. Provide ROI and payback calculations to prioritise actions.

Track KPIs: Display realtime progress on KPIs in a dashboard, with colourcoded indicators for ontrack or offtrack items.

Align with SBTi milestones: Show near-term SBTi targets (e.g., 42 % reduction by 2030) and long-term targets (>90 % by 2050). Incorporate alerts when performance deviates from the required reduction pathway.

Facilitate disclosures: Generate reports aligned with TCFD, CDP and regulatory frameworks.

Example Dashboard Concept

Imagine a Decarbonisation Roadmap view within Sustainzone:

Left panel: Baseline year (e.g., 2020) with total emissions for each scope, key operational metrics (output, revenue) and emission intensity.

Graph area: A wedge chart showing three lines—baseline (red), business-as-usual growth forecast (black) and target trajectory (green). The area between the growth forecast and target is filled with coloured wedges representing reduction actions (energy efficiency, renewable electricity, electrification, supplier engagement, waste reduction). Hovering over a wedge shows the expected emissions reduction, cost, payback period and co-benefits.

Right panel: KPI summary table with trend arrows; filters to view by site, business unit or scope; alerts when KPIs fall outside acceptable ranges; and a progress bar showing % completion towards near-term and long-term SBTs.

Scenario modeller: Users can input assumptions (e.g., scale of energy efficiency upgrades or renewable purchasing agreements) to model different pathways and update the wedge chart accordingly.

This visualisation will help organisations understand the incremental impact of each reduction action and communicate progress effectively to stakeholders.

Enhancement Suggestions for SustainZone

Decarbonisation Roadmap Visualisation: Incorporate a wedge style chart that plots baseline emissions, projected growth and the impact of successive reduction actions over time. Use interactive features to display the emissions avoided by each measure and link them to cost and payback information. This makes the trajectory to the 2030 and 2050 targets transparent, mirroring the carbon wedge analysis used in city-level plannig.

Scenario Modelling Tools: Allow users to model different reduction measures, such as energy efficiency improvements, renewable electricity procurement, fleet electrification and supplier engagement. Each lever should have adjustable parameters (e.g., % improvement, implementation year, capital cost), enabling companies to compare scenarios and identify least-cost pathways.

Supplier Engagement Module: Integrate a module to manage supplier engagement targets. Supply chain emissions are, on average, 11.4 times larger than direct emissions so the platform should track which suppliers have set SBTi-aligned targets, provide templates for supplier training and monitor progress across the value chain.

Alignment with SBTi Milestones: Embed SBTi milestone markers, e.g., 4.2 % annual reduction for Scope 1/2 and 2.5 % for Scope 3—within the dashboard. Automated alerts should trigger when the reduction trajectory deviates from these slopes, prompting corrective actions or scenario recalculation.

Expanded KPI Library: Prepopulate the platform with sector specific KPIs. For manufacturing, this could include energy consumption per unit and waste-to-landfill metrics; for services, it might focus on energy intensity of buildings and employee engagement. KPIs should be aligned with TCFD recommendations and allow customisation.

Integrated Reporting: Provide readyto use templates for SBTi progress reports, TCFD disclosures and regulatory filings. The platform should auto populate metrics and narrative sections based on the data in the system.

Frequently Asked Questions

What is the Science  Based Targets initiative (SBTi)?

The SBTi is a collaboration between CDP, UN Global Compact, World Resources Institute and WWF. It validates corporate emission reduction targets to ensure they align with climate science. The SBTi’s Corporate NetZero Standard requires companies to halve emissions before 2030, cut more than 90 % by 2050 and neutralise residual emissionssciencebasedtargets.org.

What does ‘NetZero’ mean?

Net zero refers to achieving a balance between the GHGs emitted into the atmosphere and those removed from it. Under the SBTi standard, a company reaches net zero only after it has reduced emissions by more than 90 % and neutralised the remaining emissions using permanent removals.

What are ‘near-term’ and ‘long-term’ targets?

Near-term targets typically cover 5–10 years and require rapid reductions in Scope 1, 2 and 3 emissions (≈42 % reduction in Scope 1/2 and 25 % in Scope 3 by 2030). Long-term targets extend to 2050 and mandate emissions reductions of >90 %.

What is the difference between absolute and intensity targets?

Absolute targets commit to reducing total emissions by a specific amount (e.g., 50 % reduction by 2030), whereas intensity targets reduce emissions relative to a unit of output (e.g., tCO₂e per tonne of product). The SBTi allows both but encourages absolute reductions where feasiblefiles.sciencebasedtargets.org.

Why is Scope 3 important?

Scope 3 emissions often represent the majority of a company’s footprint and may be 11.4 times larger than direct emissions. Engaging suppliers, improving product design and encouraging circular practices are essential to meet net-zero goals. SBTi requires Scope 3 targets when these emissions account for ≥40 % of total emissions and mandates that targets cover at least 67 % of Scope 3 emissions.

What is ‘beyond value chain mitigation’?

These are voluntary investments in emission reductions or removals outside a company’s value chain. They complement, but do not substitute for, internal emission reductions and help accelerate systemic decarbonisation.

Conclusion

Achieving net zero is not a vague aspiration; it requires clear definitions, science-based targets, strategic reduction actions and robust monitoring. The SBTi’s NetZero Standard provides a blueprint, demanding rapid cuts of ~50 % by 2030, deep reductions of >90 % by 2050 and neutralisation of residual emissions. Effective decarbonisation combines renewable electricity procurement, energy efficiency and electrification, phasing out fossil fuel equipment, supplier engagement and process optimisation. Tools like SustainZone can support this journey by visualising the net-zero trajectory, modelling actions and tracking KPIs. By embedding SBTi milestones into dashboards and aligning business decisions with science, companies can credibly claim that they are on a net-zero trajectory, benefit from improved efficiency and resilience, and play their part in the urgent challenge of limiting global warming to 1.5 °C.