CCP Science-Based Targets Initiative 3 — Questions and Answers
Question 1: What is the SBTi's 'two-degree of freedom' flexibility for scope 3 targets?
- Companies may choose any two scope 3 categories to exclude
- Companies can set either an absolute or intensity target for scope 3 (Correct answer)
- Companies may delay scope 3 targets by two years if data is unavailable
- Companies can use two different baseline years for scope 3 and scope 1/2
Correct answer: Companies can set either an absolute or intensity target for scope 3
SBTi allows companies flexibility to use either absolute reduction or economic intensity approaches when setting scope 3 science-based targets.
Question 2: How does the SBTi treat renewable energy certificates (RECs) or guarantees of origin for scope 2 targets?
- RECs fully satisfy scope 2 targets with no additional requirements
- Only market-based accounting with RECs is accepted for scope 2
- Location-based accounting is required; RECs alone cannot meet scope 2 targets
- RECs count only if procured within the same grid region (Correct answer)
Correct answer: RECs count only if procured within the same grid region
SBTi requires that energy attribute certificates (EACs/RECs) be sourced from the same grid where consumption occurs to count toward market-based scope 2 targets.
Question 3: Which SBTi validation status indicates a target has been submitted but not yet reviewed by the technical team?
- Committed
- Approved
- Pending Review (Correct answer)
- In Progress
Correct answer: Pending Review
After submission, targets enter 'Pending Review' status while SBTi's technical team evaluates them before granting approval.
Question 4: What is the minimum absolute emissions reduction rate per year that SBTi requires for scope 1 and 2 targets aligned with well-below 2°C?
- 2.5% per year
- 4.2% per year (Correct answer)
- 7.6% per year
- 10% per year
Correct answer: 4.2% per year
For well-below 2°C alignment, SBTi's Absolute Contraction Approach requires a minimum 4.2% linear reduction in scope 1 and 2 emissions per year.
Question 5: Which SBTi-approved method allows heavy industry sectors to set targets based on production-weighted benchmarks?
- Absolute Contraction Approach (ACA)
- Sectoral Decarbonization Approach (SDA) (Correct answer)
- Greenhouse Gas Protocol Method
- Economic Intensity Convergence
Correct answer: Sectoral Decarbonization Approach (SDA)
The Sectoral Decarbonization Approach (SDA) uses sector-specific, production-based intensity benchmarks aligned with climate scenarios for hard-to-abate industries.
Question 6: According to SBTi, what is required of financial institutions setting science-based targets for their portfolio emissions?
- They must divest from all fossil fuel companies immediately
- They must use the Portfolio Coverage, Temperature Rating, or SDA methods (Correct answer)
- They are exempt from scope 3 targets if total AUM exceeds $1 trillion
- They must only target financed emissions from listed equities
Correct answer: They must use the Portfolio Coverage, Temperature Rating, or SDA methods
SBTi's Financial Institutions framework allows banks and investors to use Portfolio Coverage, Temperature Rating, or Sectoral Decarbonization Approach methods for setting financed emissions targets.
Question 7: What happens to a company's SBTi approval if it fails to meet interim milestones on its approved target trajectory?
- The company is automatically removed from the SBTi target list
- SBTi issues a warning but retains approval unless the target is formally revised downward (Correct answer)
- The company must purchase carbon offsets equal to the shortfall
- Nothing, as SBTi only validates at baseline and net-zero endpoints
Correct answer: SBTi issues a warning but retains approval unless the target is formally revised downward
SBTi may issue public notifications of non-compliance, but targets remain listed unless the company formally revises them; removal is a last resort after review.
CCP Science-Based Targets Initiative 3
What is the SBTi's 'two-degree of freedom' flexibility for scope 3 targets?