Why supply chain SBTi coverage matters and how to effectively track it

Angela Thompson
Angela Thompson
Head of Marketing – Avarni
February 27, 2024
min read

In an era where environmental sustainability is no longer a mere buzzword but a crucial aspect of corporate strategy, the Science Based Targets Initiative (SBTi) has emerged as a beacon guiding organizations towards measurable and impactful climate action. The SBTi provides a framework for setting ambitious greenhouse gas (GHG) emission reduction targets in line with climate science, helping organizations align their efforts with the imperative of limiting global warming to well below 2 degrees Celsius above pre-industrial levels.

Why organizations set SBTi-validated targets

A growing number of organizations are committing to SBTi targets, recognizing the imperative of aligning their business strategies with climate science. The adoption of SBTi-validated targets for emission reduction witnessed a remarkable surge in 2023, soaring from 2,079 in 2022 to 4,204 in 2023. On average, over 100 organizations commit to SBTi targets or make related pledges each week. Setting a SBTi-validated target serves as a strategic imperative for organizations across various industries for several reasons:

1. Demonstrating commitment to climate action: By aligning with SBTi targets, organizations showcase their dedication to addressing climate change. In an era where stakeholders, including investors, customers, and employees, increasingly prioritize sustainability, demonstrating a commitment to reducing emissions can enhance brand reputation and attractiveness.

2. Risk mitigation and future-proofing: Climate change poses significant risks to businesses, ranging from physical risks like extreme weather events to transition risks associated with regulatory changes and market shifts towards low-carbon alternatives. Tracking SBTi helps organizations identify and mitigate these risks by setting emissions reduction targets that align with a low-carbon future.

3. Driving innovation and efficiency: Pursuing SBTi targets necessitates innovation and efficiency improvements across operations, driving organizations to adopt cleaner technologies, optimize resource usage, and streamline processes. This not only reduces emissions but also enhances operational resilience and competitiveness.

4. Access to capital and markets: Increasingly, investors and financial institutions are integrating climate-related criteria into their investment decisions. Organizations that track SBTi and demonstrate progress towards their targets may find it easier to access capital and secure investment, as well as gain entry into markets with sustainability requirements or preferences.

Why tracking SBTi in the supply chain matters

Organizations recognize that their environmental footprint extends beyond their direct operations to encompass their entire supply chain. In fact, over 80% of an organization's emissions, on average, stem from its supply chain. And so, to make impactful reductions and meet their net zero targets, organizations must decarbonise their supply chains. By tracking SBTi commitments in their supply chain partners, organizations can:

  • Enhance resilience: By ensuring the sustainability of their supply chain, organizations can mitigate risks associated with climate-related disruptions.
  • Drive innovation: Collaborating with suppliers to achieve SBTi targets can spur innovation in product design, materials sourcing, and logistics, leading to more sustainable practices.
  • Meet stakeholder expectations: Stakeholders increasingly expect organizations to address emissions throughout their value chain, making supply chain emissions transparency and reduction efforts essential.
Decarbonizing the supply chain is a pivotal element in an organization's journey towards achieving its net zero targets.

How Avarni facilitates SBTi tracking

Avarni offers valuable tools to aid in monitoring SBTi commitments within your supply chain:

  • SBTi Weekly Digest — Avarni's weekly email digest offers a concise summary of the 100+ organizations, on average, that commit to SBTi targets each week. This digest provides insights into trends such as the most active sectors, examples of public companies and their set targets, as well as details on organizations with impending commitment deadlines. Additionally, it includes a link to download a comprehensive spreadsheet of weekly changes, saving time typically spent filtering through updates on the SBTi website.
  • Supplier readiness gap analysis — Avarni enables you to assess the proportion of your supply chain that has already established SBTI-validated targets. Seamlessly integrating SBTi data with your supply chain expenditure information, Avarni provides a real-time overview of your progress. Its search feature empowers you to identify specific suppliers and promptly ascertain their sustainability targets, aiding in informed decision-making regarding supplier relationships.

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