Can Science-Based Targets Make the Private Sector Paris-Aligned? A Review of the Emerging Evidence

Companies increasingly set science-based targets (SBTs) for reducing greenhouse gas emissions. We review literature on SBTs to understand their potential for aligning corporate emissions with the temperature goal of the Paris Agreement.

SBT adoption by larger, more visible companies in high-income countries has accelerated. These companies tend to have a good prior reputation for managing climate impacts and most appear on track for meeting their scope 1 and 2 SBTs. More research is needed to distinguish between substantive and symbolic target-setting and understand how companies plan to achieve established SBTs. There is no consensus on whether current target-setting methods appropriately allocate emissions to individual companies or how much freedom companies should have in setting SBTs. Current emission accounting practices, target-setting methods, SBT governance, and insufficient transparency may allow companies to report some emission reductions that are not real and may result in insufficient collective emission reductions. Lower rates of SBT diffusion in low- and middle-income countries, in certain emission-intensive sectors, and by small- and medium-sized enterprises pose potential barriers for mainstreaming SBTs. While voluntary SBTs cannot substitute for more ambitious climate policy, it is unclear whether they delay or encourage policy needed for Paris alignment.

We find evidence that SBT adoption corresponds to increased climate action. However, there is a need for further research from a diversity of approaches to better understand how SBTs may facilitate or hinder a just transition to low-carbon societies.