INSIGHT by The Science Based Targets initiative (SBTi)
Following the hottest three months ever recorded, the need for urgent, robust climate action has never been clearer, prompting the Science Based Targets initiative (SBTi) to separate out its validation services division to further boost credibility and integrity for businesses and financial institutions setting science-based targets. The transformation comes as the SBTi announces its new Chair and two new independent Trustees.
By creating a separate entity for target validation services, the SBTi is adopting the recognized best practice for assurance bodies, which is designed to safeguard impartiality.
There are also plans to increase validation capacity to meet the growing international demand for science-based targets, which last year saw an 87% year on year increase in the number of companies setting targets. The aim is to ensure the highest level of trustworthiness for corporate climate goals with best practice, greater capacity and service excellence.
The SBTi is also unveiling changes to its governance, effective this month. Francesco Starace has been appointed Chair of the SBTi’s Board of Trustees. Mr Starace is a Partner at EQT Infrastructure and formerly the CEO of Italian energy giant ENEL, for which he is credited with driving renewable energy transformation through Europe and beyond.
Global demand for credible corporate climate action is soaring as extreme weather events increase in intensity and frequency and we enter the era of ‘global boiling’. By 2025, the SBTi forecasts that more than 10,000 companies will have set science-based targets.
In the last year, the SBTi has doubled its headcount and halved average waiting times for target validations. It has also appointed an independent Technical Council, as an independent body to review and approve SBTi standards and related normative instruments, before formal adoption. Its remit is to further enhance technical integrity and adherence to established standard-setting procedures.
The SBTi has been operated as a partnership between the World Wide Fund for Nature (WWF), CDP, World Resources Institute (WRI), United Nations Global Compact, and the We Mean Business Coalition. It has now incorporated in the UK where it has registered as a company limited by guarantee and has submitted an application to the Charity Commission. Although independent, the SBTi will retain close links with its founding partners, representatives of which will continue to serve the Board alongside the new independent Trustees.
The five key pillars of the transformation program are:
- Incorporation – the development of the SBTi as an independent legal entity with its own Board of Trustees, aiming to become a charity regulated by the UK Charity Commission.
- New Chair plus independent Trustees – the establishment of a legal Board of Trustees, expanded to include the new Chair Francesco Starace, former President Iván Duque, and Ester Baiget, with more appointments due to follow.
- Creation of separate entities for standard-setting and validation – in line with recognized best practice for assurance bodies. Initially both standard-setting and target validation entities will remain closely linked and the transformation process is already underway.
- Strengthened standard-setting – the SBTi is strengthening its standard-setting by redrawing its technical governance and standard-setting processes in line with internationally recognized best-practice. Following the appointment of the Technical Council, the SBTi is finalizing and will publish its standard-setting procedures.
- Validation service provider – the validation service provider will be structured to enable it to upscale to meet growing demand.
“The moment for accelerating corporate climate action is right now. This action must be built on trust as businesses require the highest level of credibility for their targets. This year we have witnessed the three hottest months ever recorded, we must accelerate on all fronts. When I joined last year, my key remit was to build out the SBTi’s governance, while scaling up the organization in the face of enormous demand. I am elated to have an industry leader like Francesco Starace join as our Chair and welcome all of the new appointees on this important journey.”
-Luiz Amaral, SBTi CEO
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