CENsible - Science-based targets

What are science-based targets and the Science Based Targets initiative (SBTi)?

• Science-based targets are carbon reduction targets which align to limiting global warming to 1.5°C above pre-industrial levels.

• The SBTi provides a validation standard for science-based reduction targets.

• Over 7,000 companies have targets validated with the SBTi, of which over 1,600 companies have full net zero targets.

• Targets are evolving both at the sector level and the SBTi’s Net Zero Standard as a whole.

  • Recent sector standards in Transport, Buildings and Forest, Land and Agriculture (FLAG) sectors provide specific pathways more detailed guidance for hard-to-abate sectors and may require pre-existing targets to be revised.

  • Last month, the SBTi has released a 2.0 draft Net Zero Standard for consultation, which proposes additional requirements for those setting “regular” SBTi targets: separate targets for scope 1 and scope 2, greater precision in scope 3 targets, more rigour in data including an assurance requirement and public commitment for publishing a transition plan.

How can private equity firms set science-based targets?

• Private equity firms can set portfolio engagement targets for scope 3 or value chain emissions, which are predominantly emissions from investments.

• Portfolio engagement targets commit PE firms to having a proportion of portfolio companies set their own science-based targets by a certain date, proportionally rising on a linear path to 100% portfolio coverage by 2040.

What have your peers been doing?

• Since 2021, when the Science Based Targets initiative released its private equity sector target guidance document, 50 private equity firms have set science-based portfolio targets; 6 in 2021, 9 in 2022, 14 in 2023, 20 in 2024 and 1 so far in 2025.

• The most aggressive targets commit to 100% of portfolio companies having their own approved SBTs by 2030. The least demanding targets are in line with the SBTi's deadline of 100% by 2040.

Why set science-based targets?

• LP focus. LPs are evolving their sustainability approaches. Setting approved SBTs is a clear signal of market-leading transition planning.

• Value creation. Commercial requirements are by far the largest driver of corporate net zero target setting and provide a differentiator when value chain companies are seeking partners. Your portfolio companies' customers may prefer, or even require, companies have approved science-based targets, resulting in new business opportunities and protecting current relationships.

• Long-term focus. Done properly, lifecycle carbon footprinting and setting SBTs opens long-term conversations within businesses and with external stakeholders about use of renewables, future technologies, carbon intensity of partners' processes, value chain oversight and so on. The process provides clear identification of levers allowing for strategic planning for net zero transition.

• Talent attraction. Science-based targets can be an important factor for attracting talent at portfolio companies.

How can CEN help?

• Set GP science-based targets to demonstrate alignment to climate change management which is increasingly part of an investors’ fiduciary duty.

• Ensure portfolio companies meet portfolio engagement targets, focusing on high impact investments as a priority.

• Ensure portfolio companies meet customer demands, especially in B2B sectors where targets are increasingly a condition of supply. 

• De-risk targets as much as possible. We set practical, project-based targets based on as detailed a transition plan as possible, which ensures smooth internal approval process and credible external communication of the net zero journey.

CEN client examples

• In the last year, CEN has determined and set 10 SBTi-validated net zero targets, filed targets for 3 additional businesses and are working with 4 more. Our team have written 7 net zero transition plans.

• Large private industrials firm – we supported a global auto parts manufacturer to measure its carbon footprint, submit its EcoVadis assessment, and set and validate science-based targets. Our client achieved platinum EcoVadis (top 1% of all companies) and, using a lifecycle approach for its carbon footprint, we have been able to provide details of product carbon footprints to serve stringent customer requests. Our client has been recognised as a leader and has been nominated by customers for sustainability awards.

• Small private cyber security firm – we supported a small cyber security firm for the same requirements as the example above. As a result of achieving platinum EcoVadis and validating its science-based targets the firm has met the requirements of some of its customers to be eligible to conduct business, protecting its current, and widening its potential, customer base.

Contact us

CEN Group is an award-winning investor communications and sustainability consultancy. We help companies engage more effectively and become more sustainable, providing practical, business-first solutions that make our clients’ lives easier.

If you would like to learn more about our services, please get in contact via email and our team would be happy to assist.

• Jasper Crone, Director: jasper.crone@cen-grp.com

• Roger Johnston, Director: roger.johnston@cen-grp.com

For industry insights and expert views, follow CEN Group on LinkedIn.