Background: This chapter establishes the foundational requirements for determining a company’s target base year emissions and associated required metrics under the SBTi Standards. The process begins with defining organizational and operational boundaries, which ensure that all subsequent calculations and targets accurately reflect the company’s structure and activities.
Target setting operates in defined cycles. For each new target cycle, a company is required to select the most recent year with comprehensive data as the target base year for near-term targets. This reflects changes in company structure and emissions over time and aligns with SBTi target-setting methods that determine ambition based on a company’s current emissions profile rather than historical base year emissions. Updating the target base year represents a continuation, not a reset, of the decarbonization journey: the company is expected to demonstrate continued progress across successive target cycles.
The chapter further sets out requirements for preparing a comprehensive GHG emissions inventory aligned with the GHG Protocol Standards, calculating required metrics such as low-carbon electricity (LCE), identifying emissions-intensive activities (EIAs), and applying third-party assurance. Together, these provisions provide the technical and governance foundations for credible cycle-based target setting and progress tracking.
To establish clear and comprehensive organizational and operational boundaries as the foundation for the consistent application of all SBTi Standards, including Sector Standards, and for setting, tracking, and assessing progress against targets.
To ensure that, at the start of each target cycle, companies select a target base year that reflects their current organizational structure and emissions profile. This aligns with SBTi target-setting methods, which determine ambition based on current emissions rather than historical base years, while maintaining accountability and building on achieved emissions reductions.
To ensure companies establish a robust and transparent foundation for credible target setting and end-of-cycle progress assessment by accounting for and reporting a base year GHG inventory aligned with the GHG Protocol and other target-setting metrics.
To ensure that the most emissions-intensive value chain activities are explicitly visible and addressed through targets or transition planning, the identification and quantification of EIAs is required separately from broader scope 3 categories, with dedicated target-setting options available under CNZS-C15.
To strengthen the credibility and reliability of the target base year GHG emissions inventory and related calculations through independent third-party assurance. Assurance is required for Category A companies and strongly encouraged for Category B companies as a key mechanism to enhance transparency and confidence in reported emissions.
To ensure that target base year emissions and associated required metrics remain accurate, representative, and comparable over time by requiring recalculation in response to material structural or methodological changes.
