Takeaways
- SBTi provides a globally recognised framework for setting credible and transparent greenhouse gas reduction targets aligned with climate science.
- Committing to SBTi requires organisational readiness, including reliable emissions data, internal expertise, governance oversight and long-term resource commitment.
- Businesses in Malaysia should conduct a thorough internal assessment before committing, ensuring they understand the transparency and accountability expectations involved.
- When the organisation is prepared, SBTi can strengthen climate risk management, improve investor and stakeholder confidence, and support competitiveness in global supply chains.
- SBTi is most effective when integrated into overall business strategy, rather than treated as a standalone sustainability exercise.
The Science Based Targets initiative (SBTi) has emerged as a key global standard for corporate climate action. It supports organisations in setting greenhouse gas (GHG) reduction targets that are grounded in climate science and aligned with global efforts to limit warming to 1.5°C. As regulatory expectations, supply chain requirements and investor priorities continue to evolve, many companies in Malaysia are considering whether to adopt science based targets as part of their sustainability strategy.
This guide explains what SBTi is, why it matters, how it works and what Malaysian businesses should evaluate before making a commitment.
Table of Contents
What is the Science Based Targets initiative (SBTi)?
The SBTi is a collaboration between CDP, the United Nations Global Compact, the World Resources Institute and the World Wide Fund for Nature. Its purpose is to help businesses set credible, measurable and time-bound emissions reduction targets. These targets must be aligned with the latest scientific understanding of how much and how quickly emissions must decrease to avoid the worst impacts of climate change.
To be recognised as science based, targets must:
- Align with the 1.5°C warming limit
- Cover relevant emissions scopes
- Include near-term targets, and where applicable, long-term net zero targets
- Be publicly disclosed with annual reporting of progress
This framework ensures corporate climate commitments are transparent and verifiable.
Why SBTi Matters for Businesses in Malaysia
Committing to SBTi can provide meaningful strategic and operational benefits. However, it also represents a long-term commitment to transparency, accountability and active emissions management.
Conducting an Internal Assessment Before Committing
Before adopting SBTi, businesses should assess their current readiness to measure, manage and report emissions. Committing to SBTi means the organisation will publicly disclose targets and progress, which can lead to increased expectations from stakeholders including customers, investors, regulators and employees.
Companies should therefore evaluate whether they have:
- Reliable data systems for measuring Scope 1, Scope 2 and relevant Scope 3 emissions
- Clear internal roles and responsibilities for sustainability and climate governance
- Sufficient resources and expertise to design and implement reduction initiatives
- Leadership commitment, including senior management and board oversight
If these elements are not yet established, it may be beneficial to strengthen internal capacity first before formalising SBTi commitments.
Benefits When the Organisation Is Prepared
For companies that have the foundation in place, SBTi offers the following advantages:
Stronger climate risk and regulatory preparedness
A structured reduction pathway supports compliance planning and transition risk management.Enhanced trust and credibility
Science aligned targets are increasingly valued in investment decisions and procurement evaluations.Operational efficiency and innovation
Emissions reduction efforts often lead to energy efficiency, improved resource use and opportunities for new business solutions.Competitive positioning in global supply chains
Many multinational customers now require suppliers to measure and reduce emissions.Reputation and stakeholder confidence
Publicly validated targets demonstrate responsible and forward-looking corporate governance.
Learn more on How SBTi Drives Sustainable Innovation in Climate Action
The SBTi Process: Step-by-Step
| Step | Description |
|---|---|
| 1. Commit | Declare the intention to set science based targets. |
| 2. Develop | Measure emissions and set reduction targets based on accepted methodologies. |
| 3. Submit for Validation | SBTi reviews and validates the proposed targets. |
| 4. Announce | The organisation publicly communicates its approved targets. |
| 5. Disclose Progress | Progress is reported annually through recognised sustainability reporting channels. |
This sequence ensures targets are planned, validated and monitored consistently.
What Makes a Target “Science Based”?
A science based target must reflect the emissions reduction required to meet the global 1.5°C limit. Typically, this includes:
- Setting near-term targets over a 5 to 10 year horizon
- Setting long-term ambitions toward net zero where applicable
- Addressing Scope 1 and Scope 2 emissions in all cases, with Scope 3 included when material
- Applying recognised sector or cross-sector decarbonisation pathways
This ensures emissions reductions are environmentally meaningful and globally aligned.
Challenges for Malaysian Organisations and Practical Approaches
Common Challenges
- Limited availability or accuracy of emissions data
- Difficulty engaging suppliers for Scope 3 information
- Limited internal expertise for emissions modelling and scenario planning
- Evolving local sustainability reporting frameworks
Practical Approaches
- Start with building a reliable Scope 1 and Scope 2 emissions baseline
- Establish internal governance and integration into business planning
- Engage suppliers early and provide support on emissions measurement
- Use established calculation tools and international methodologies
- Treat SBTi as part of a long-term organisational improvement journey
How SBTi Supports Broader ESG and Net Zero Ambitions
SBTi provides structure and clarity to sustainability and climate action strategies. It strengthens:
- Credibility of net zero commitments
- Alignment with disclosure requirements and climate-related risk reporting
- Integration of climate considerations into business strategy
The SBTi provides Malaysian organisations with a clear and credible framework for reducing emissions in line with international climate goals. It can enhance competitiveness, improve stakeholder confidence and support long-term resilience. However, organisations should assess their readiness and capacity carefully to ensure that commitments can be implemented effectively and consistently.
At Bernard Business Consulting, we support organisations in Malaysia and the region to design and implement science-aligned climate targets. This includes greenhouse gas accounting, emissions reduction planning and sustainability reporting to help businesses prepare for and progress toward SBTi commitments. Our practical guidance, tools and capacity-building programmes enable companies to integrate climate objectives into strategy, governance and day-to-day operations with clarity and confidence.
Contact us if your organisation is exploring or planning to adopt the SBTi, you may reach out to us to discuss the next steps.
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