SMEs Drive Record Net-Zero Target Growth at SBTi in 2023

Small and medium-sized enterprises accounted for the largest share of new science-based target approvals at the SBTi in 2023, with 1,425 SMEs validated out of 2,267 total companies. Net-zero target adoption surged 245%, with 449 organisations setting such targets compared to 130 in 2022.

Of the 2,267 companies with targets validated in 2023, 1,425 were SMEs, surpassing the cumulative total of SMEs that set targets between 2020 and 2022 combined. Large companies, excluding SMEs and financial institutions, also grew strongly, with a 57% increase to 1,866 in total. Forty financial institutions set science-based targets in 2023, slightly above the 38 that did so in 2022, bringing the total to 86 and representing 83% growth.

The marked shift toward SME participation addresses a longstanding criticism of SBTi that its reach was concentrated among large, listed corporations. SMEs often lack dedicated sustainability teams, making the SBTi's streamlined SME route, introduced in 2020, a key enabler. For India, where the MSME sector constitutes a significant share of economic activity and supply chains, this trend signals growing pressure on smaller companies to align with science-based climate pathways as part of global value chain requirements.

Net-zero targets accounted for 20% of all targets set in 2023, with 51% of those from companies and 49% from SMEs. The SBTi is developing a Financial Institutions Net-Zero Standard, which will allow banks and asset managers to set validated net-zero targets. Until that standard is finalised, financial institutions are permitted to retain their existing commitments on the SBTi website while awaiting updated criteria.

Key figure — 245% growth in net-zero targets set in 2023 vs 2022