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🎯 Science-Based Targets (SBTi)
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Near-Term TargetsLesson 2 of 43 min readNear-Term Criteria V5.3, C7-C12

Emissions Accounting and Method Validity

Once a company locks down its exact target boundary, the SBTi enforces a devastatingly strict rulebook regarding exactly how those emissions are mathematically accounted for. Criteria C7 through C12 close massive historical carbon-accounting loopholes.

Method Validity (C7)

C7 strictly forbids regulatory shopping. Companies must physically model their targets using the absolute latest methods and tools officially published by the SBTi.

If the SBTi publishes an updated, vastly stricter calculation tool, companies possessing unfinished submissions enjoy a strict 6-month grace period to submit using the older tool. Once that six-month window violently closes, all new submissions must legally upgrade to the latest, strictest methodology.

Scope 2 Accounting Consistency (C8)

Purchased electricity (Scope 2) can be calculated using two wildly different approaches:

  1. Location-based: Uses the dirty, average emission factor of the physical local power grid.
  2. Market-based: Uses the clean factors from physical contracts (Renewable Energy Certificates, Power Purchase Agreements).

C8 forcefully demands absolute consistency. A company must choose exactly one approach and stick to it flawlessly. You absolutely cannot set an easy baseline using dirty location-based numbers, and then fraudulently switch to cleaner market-based numbers a few years later to fake incredible emission reductions.

Scope 3 Inventory (C9)

C9 forces reality: before you can set a target to destroy Scope 3 emissions, you must completely map them.

Companies must complete an exhaustive, devastatingly comprehensive Scope 3 inventory utilizing the exact GHG Protocol boundaries. A company absolutely cannot submit an incomplete estimate covering merely its top ten largest suppliers while completely ignoring transport and end-of-life disposal.

Biogenic Accounting (C10)

Biomass is absolutely not considered automatically "zero-carbon" in the SBTi framework. Burning wood pellets or biofuels triggers massive, highly complex accounting requirements under C10.

Companies furiously burning bioenergy must:

  1. Aggressively report all net biogenic CO2 emissions directly inside their target boundaries.
  2. Include all upstream emissions from bioenergy extraction, including Direct Land Use Change (LUC), methane from decomposition, and supply chain transport.

Historically, many corporate strategies assumed that burning trees was perfectly carbon neutral because the trees absorbed carbon while alive. This terrifying assumption completely ignores the catastrophic carbon released when clearcutting a forest, or the incredibly potent methane released by agricultural land management. C10 violently closes this loophole, forcing companies to calculate the true, devastating footprint of massive bioenergy utilization.

The Ban on Carbon Credits (C11)

This criterion brutally executes the most frequently misunderstood concept in global corporate sustainability.

C11 is unambiguous: the purchase of carbon credits absolutely must not be counted as emission reductions toward near-term SBTs.

Every single tonne of reduction claimed against an SBT essentially must come from actual physical emission destruction inside the company's boundary. You absolutely cannot buy cheap forestry offsets and use them to lower your ledger to pass your near-term target.

Carbon credits may only be deployed for two highly restricted purposes:

  1. Permanently neutralizing the final residual emissions (the last 10%) at the absolute end of the 2050 net-zero journey.
  2. Executing Beyond Value Chain Mitigation (BVCM) as a completely separate climate finance donation.

C11 in Action A massive logistics company targets a 40% emissions reduction by 2030. By 2028, it has only managed a 20% reduction. Desperate, it buys incredible volumes of premium carbon credits equal to the missing 20%.

Under C11, this completely fails. The company remains a massive failure against its SBT. It cannot legally inject credits into the reduction ledger.

Avoided Emissions are Excluded (C12)

C12 violently separates avoided emissions from corporate inventories.

Avoided emissions represent hypothetical savings occurring outside the company (e.g., the emissions "saved" when a customer buys a highly efficient electric vehicle instead of a gas guzzler). While these are fantastic for global society, they absolutely belong on a completely separate ledger. A corporation legally cannot subtract these "avoided" numbers from the massive carbon footprint of its own dirty manufacturing plants.

Key Takeaways

  • 1Companies must use only the latest SBTi-published methods and tools, with a 6-month grace period when updates are released (C7)
  • 2Scope 2 accounting must be consistent - you cannot switch between location-based and market-based methods to inflate apparent reductions (C8)
  • 3Carbon credits absolutely cannot count as emission reductions toward near-term SBTs (C11) - every tonne must come from real operational cuts
  • 4Bioenergy is not automatically carbon-neutral under SBTi rules - all biogenic CO2 and upstream land-use emissions must be reported (C10)
  • 5Avoided emissions (e.g., selling efficient products) are excluded from corporate inventories and cannot reduce SBT obligations (C12)

Knowledge Check

1.Under C7, if the SBTi publishes a revised version of an approved calculation tool, how long do companies have to still submit targets modeled using the previous version?

2.A company sets its scope 2 baseline using the market-based approach at 60,000 tCO2e, targeting a 40% reduction by 2030. In 2027, it finds that its location-based scope 2 figure has fallen faster than its market-based figure. Under C8, what must the company do?

3.Which of the following correctly describes what C11 permits companies to use carbon credits for?

4.Under C10, a company using bioenergy must include which upstream emissions in its main GHG inventory?

5.C12 states that avoided emissions fall under a separate accounting system from corporate inventories. What does this mean for a company that manufactures highly efficient heat pumps that reduce customers' heating emissions?

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