SBTi Research Identifies Critical Gaps in Corporate Climate Target Verification

The Science Based Targets initiative has published a research paper examining current practices and challenges in measuring, reporting and verifying progress against corporate science-based targets. The paper, based on surveys, literature reviews, data analysis and stakeholder interviews, identifies three priority areas: standardising thresholds for significant inventory changes, developing leading progress indicators, and improving third-party assurance.

The landscape analysis paper on measurement, reporting and verification of science-based targets ranks current practices and challenges across five dimensions: consistency with targets, achievement, transparency, feasibility and alignment with guidance. One key finding concerns the lack of clear guidance on how to handle significant changes — such as mergers, major divestments or shifts in GHG accounting methodology — during a target period. In 2023, the SBTi introduced a 5% maximum threshold to define when a change in a company's emissions profile requires an update to its inventory.

The research highlights that progress against corporate climate targets is often difficult to assess because of delays between action and measurable emissions impact, as well as accuracy and completeness challenges in emissions calculations. The paper proposes supplementing core target metrics with financial and transition-plan indicators, including capital expenditure, operating expenditure and research and development spend, as early signals of a company's decarbonisation trajectory. These leading metrics could give investors and stakeholders greater context well before actual emissions reductions are measurable.

Third-party assurance emerged as a third major theme, with the paper finding that such assurance is now required or recommended by at least seven regulations and eleven leading climate frameworks. The practice is becoming more common among corporates, reflecting growing expectations from regulators and investors for independent verification of GHG emissions data. The SBTi positions the findings as a foundation for developing more standardised and robust MRV frameworks that will help companies and financial institutions demonstrate credible progress against their voluntary climate commitments.

Key figure — 11 leading climate frameworks recommend or require third-party assurance