What's Happening?
The Science-Based Targets initiative (SBTi) has reported a significant increase in the number of companies setting verified decarbonisation targets. In Q2 2025, the number of firms with near-term targets rose by 97% compared to Q4 2023, while long-term net-zero targets surged by 227%. Despite this growth, the share of global market capitalisation under science-based targets remained stable at around 41%. SBTi CEO David Kennedy emphasized the importance of integrating climate action into business strategies to maintain competitiveness and capitalize on low-carbon opportunities. As of now, 8,715 companies have validated emissions targets, with a notable presence in manufacturing, logistics, and textiles industries.
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Why It's Important?
The increase in decarbonisation targets reflects a growing commitment among businesses to align with the Paris Agreement's climate goals. This trend is crucial for driving global efforts to reduce carbon emissions and transition to a sustainable economy. Companies adopting these targets can enhance their market position, attract environmentally conscious investors, and mitigate regulatory risks associated with climate change. The widespread adoption across industries indicates a shift towards sustainable practices, potentially influencing supply chains, consumer behavior, and policy frameworks.
What's Next?
The SBTi is updating its Net Zero Standard to address challenges faced by businesses in adopting decarbonisation targets. The revised standard, expected in early 2026, will offer more flexibility, particularly for SMEs in low-income countries. A second round of public consultation is anticipated, which will refine the standard and potentially expand the use of carbon offsetting. Companies will need to adapt to these changes and continue setting ambitious targets to meet global climate objectives.
