SBTi: Definition

Updated 2026-11-02 · 2 min read · By the akar.earth specialist team

What is SBTi? The Science Based Targets initiative, how it validates corporate climate targets, and what it means for land-based carbon and FLAG emissions.

SBTi (Science Based Targets initiative) is an organisation that sets standards for corporate greenhouse gas reduction targets and independently validates whether a company’s targets are consistent with limiting warming to 1.5°C. Thousands of companies worldwide have set or committed to SBTi-validated targets.

Why it matters

SBTi shapes how large companies plan climate action, including what they buy. Because validated targets must be met through real emission reductions within the company and its value chain, SBTi affects demand for carbon credits: avoidance credits cannot count toward targets, while in-value-chain removals from land, such as agroforestry within a sourcing region, can matter for FLAG targets.

How it works

• Companies commit, then submit near-term and, where relevant, long-term net zero targets.
• SBTi checks targets against its criteria and sector pathways.
• Targets cover Scope 1, 2 and usually Scope 3 emissions.
• Companies with significant land-related emissions set FLAG targets, including a no-deforestation commitment.
• Progress is reported annually.

Standards are revised over time, so check the current Corporate Net-Zero Standard and FLAG guidance on the SBTi website. See our page on SBTi FLAG.

Indonesia and Southeast Asia angle

Global food, beverage, cosmetics and consumer goods firms buying Indonesian palm oil, coffee, cocoa and rubber often have SBTi FLAG targets. They need deforestation-free sourcing and want measurable removals in their supply sheds. That creates demand for smallholder agroforestry programmes that report tree carbon at farm level, and overlaps with EUDR data needs.

SBTi also encourages companies to finance mitigation beyond their value chain, often called beyond value chain mitigation. High-quality forest credits, including REDD+ and ARR, can be used for this purpose, as long as companies do not count them toward their reduction targets. That keeps a role for Indonesian credits in corporate strategies.

Common mistakes

• Treating SBTi as a credit standard.
• Counting offsets toward near-term targets.
• Mixing up FLAG removals inside the value chain with credits bought outside it.

More on corporate demand at the climate finance hub.