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🎯 Science-Based Targets (SBTi)
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Advanced TopicsLesson 1 of 33 min readNear-Term Criteria V5.3, C22-C24; Net-Zero Standard V1.3, Section 6

Sector-Specific Guidance

The SBTi framework began with general rules for everyone. However, the exact methods required to decarbonize a software company are utterly useless for decarbonizing a massive global steel manufacturer. The SBTi systematically deployed devastating sector-specific guidance to force heavy industries onto technically customized, hyper-aggressive decarbonization pathways.

For companies operating in these chosen sectors, sector guidance is absolutely not optional.

The Rule of Mandatory Alignment (C24)

Criterion C24 brutally dictates that if the SBTi publishes new sector-specific guidance covering your industry, you have exactly 6 months to align your entire target architecture to it. If you submit a target on day 181 using the old general methods, it will be instantly rejected.

What Sector Guidance Forces You to Do

Sector guidance strips away all flexibility and forces heavy industries into uncompromising corners:

  1. Mandatory Pathways: A cement company cannot use general cross-sector math. It must use the cement-specific Sectoral Decarbonization Approach (SDA) pathway dictating exact clinker ratios.
  2. Fixed Intensity Metrics: The guidance violently locks down the exact physical metric. A steel company absolutely must measure purely in "tCO2e per tonne of steel." It cannot use revenue or other favorable economic metrics.
  3. Tighter Ambition Floors: Sector guidance frequently ramps up the minimum ambition completely beyond the general 4.2% rule. The power sector, for instance, is mathematically forced to hit near-zero grid intensity by 2040 in many massive global markets.

Think of sector-specific guidance exactly like moving from a general physician to a specialized neurosurgeon. The general rules still apply, but the specialized guidance uses hyper-precise instruments calibrated entirely for your specific, highly complex operational anatomy.

Heavily Regulated Sectors

The SBTi actively maintains hyper-strict guidance for the following massive global sectors:

  • Power and Electric Utilities
  • Cement, Steel, and Aluminum
  • Maritime Shipping and Aviation
  • Forest, Land, and Agriculture (FLAG)
  • Financial Institutions and Private Equity
  • Apparel, Footwear, and Buildings

The Brutal Fossil Fuel Rules (C22 & C23)

The SBTi maintains an incredibly hostile, heavily structured relationship with the fossil fuel economy.

C22: The Category 11 Mandate

If your massive diversified company sells or distributes any fossil fuels to end users, Criterion C22 violently triggers. You absolutely must set a Scope 3 Category 11 (use of sold products) target. You cannot claim that fossil fuels only represent 5% of your revenue to dodge the requirement.

C23: The Total Exclusion Zone

Criterion C23 completely bans two specific types of companies from even entering the SBTi framework:

  1. Fossil Fuel Producers: Companies whose primary business is violently ripping coal, oil, or gas from the earth.
  2. Majority Distributors: Companies deriving more than 50% of their massive revenue purely from distributing fossil fuels.

A fossil fuel producer's Scope 3 Category 11 emissions (customers burning their oil) represent 90% of their footprint. Setting a legitimate 1.5C science-based target would logically require the oil company to mathematically commit to rapidly shutting down its own core business. Because the exact timeline of global fossil fuel phase-out remains highly political and technically unresolved, the SBTi currently refuses to validate targets that would inevitably lend unearned climate credibility to massive oil majors.

Key Takeaways

  • 1If the SBTi publishes sector-specific guidance for your industry, you have exactly 6 months to align your targets to it (C24)
  • 2Sector guidance mandates specific pathways, fixed physical intensity metrics, and often tighter ambition floors than the general 4.2% rule
  • 3Regulated sectors include power and utilities, cement, steel, aluminum, maritime shipping, aviation, FLAG, financial institutions, and apparel
  • 4Any company selling or distributing fossil fuels must set Scope 3 Category 11 targets (C22), regardless of revenue share
  • 5Fossil fuel producers and majority distributors (over 50% revenue from fossil fuels) are completely excluded from SBTi validation (C23)

Knowledge Check

1.Criterion C24 of the SBTi Near-Term Criteria states that when sector-specific guidance is published, companies operating in that sector must align their targets with the guidance within what timeframe?

2.Criterion C22 requires that fossil fuel sellers set a Scope 3 Category 11 target regardless of what factor?

3.Under Criterion C23, which of the following company types is currently ineligible to set SBTi targets through the standard process?

4.The Sectoral Decarbonization Approach (SDA) for the steel sector uses which physical intensity metric?

5.A company discovers that sector-specific SBTi guidance applicable to its operations was published 8 months ago, but it has not yet updated its validated targets to reflect the guidance requirements. Under C24, what is the situation?

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