SBTi and the CO₂ Performance Ladder: Complementary Tools for a Low-Carbon Future

As the urgency to address climate change grows, organisations face a growing number of tools designed to help them reduce their carbon footprint. Two such tools, the Science-Based Targets initiative (SBTi) and the CO₂ Performance Ladder, are well-regarded for their ability to guide organisations toward meaningful emissions reductions. While these tools share common goals, their approaches and applications differ significantly. This comparison explores their features, highlights areas of overlap, and identifies the unique value they bring to the table.

Understanding the Tools

The SBTi is a collaborative initiative involving CDP, the UN Global Compact, WMBC, WRI, and WWF. It enables organisations to set greenhouse gas (GHG) emissions reduction targets that are grounded in climate science. With a focus on aligning corporate action with the Paris Agreement, SBTi supports both near-term (5–10 years) and long-term (net-zero by 2050) commitments. Validation is carried out by SBTi Services, a second-party process ensuring adherence to rigorous and transparent standards for target approval. Organisations voluntarily commit to SBTi and begin with a self-assessment before submitting targets for validation. Costs are primarily associated with target validation, where large companies pay fees for approval, while SMEs have access to a streamlined, lower-cost SBTi validation process.

Once SBTi targets are approved, organisations must self-report their progress annually. A full target reassessment is required every five years to ensure continued alignment with the latest climate science.

The CO₂ Performance Ladder, on the other hand, provides a structured management system to help organisations reduce their carbon emissions and energy use. Rooted in a continuous improvement model (Plan-Do-Check-Act [PDCA] cycle), it goes beyond reduction targets, incorporating stakeholder engagement, energy efficiency, and sustainable procurement practices (including life-cycle analysis) to foster a more integrated approach to carbon reduction. The Ladder certifies organisations at multiple levels, allowing them to demonstrate progress over time. The certification process involves independent third-party audits conducted by accredited certification bodies, ensuring a high level of rigour and credibility. Participation is voluntary, and organisations begin with a self-assessment to determine their certification level before undergoing an external audit.

Certification under the Ladder requires annual audits to verify continued compliance, with a full recertification process every three years. Certification costs depend on the level an organisation pursues, with expenses covering internal resource allocation and third-party audit fees.

Shared Objectives

Both SBTi and the Ladder are anchored in the ambition to reduce greenhouse gas emissions and support global climate goals. Organisations adopting either tool benefit from greater transparency and accountability in their carbon reduction efforts. The tools are also increasingly relevant in procurement, enabling organisations to engage suppliers in their decarbonisation strategies. By setting clear expectations for climate action, both SBTi and the Ladder empower organisations to play a pivotal role in tackling the climate crisis.

Diverging Pathways

While their goals overlap, the two offer distinct approaches. SBTi focuses on setting and validating science-based emissions reduction targets, requiring organisations to establish a robust and rigorous baseline as a foundation for target setting. This binary process (approved or not) ensures alignment with science-based standards but leaves implementation plans to the organisation’s discretion.

In contrast, the Ladder adopts a broader perspective. Its multi-level certification framework allows organisations to progressively enhance their understanding and management of greenhouse gas emissions, helping them increasing their ambitions over time. Even if organisations remain at the same certification level, the Ladder’s continuous improvement approach encourages them to strengthen their emissions reduction efforts and integrate sustainability deeper into their operations.

The Ladder’s focus extends beyond emissions targets, addressing stakeholder engagement, energy efficiency, and sustainable procurement practices (including life-cycle analysis) to support holistic carbon reduction strategies. This structured approach makes it particularly useful for organisations looking to integrate emissions management into their core operations while fostering long-term sustainability improvements.

Practical Application in Procurement

Procurement is a critical area where both tools add value, albeit in different ways. SBTi is often used as a benchmark for assessing suppliers’ climate commitments. For instance, organisations may require their suppliers to have validated SBTi targets or show clear progress toward setting them. Some organisations also set Scope 3 engagement targets, requiring suppliers to establish their own SBTs. This approach leverages procurement as a mechanism to align supply chains with science-based targets.

The CO₂ Performance Ladder, however, offers a more nuanced approach to procurement. Its certification levels provide a framework for assessing suppliers based on their sustainability performance, enabling organisations to reward continuous improvement. One of the most distinctive features of the Ladder is its incentivisation mechanism in procurement. For example, procurers can apply fictitious discounts or points-based systems in award evaluations to favour suppliers with higher Ladder certification levels. The requirements of the Ladder can also be applied solely to the contract in question, if preferred by the supplier. This mechanism not only rewards suppliers for their progress but also drives systemic decarbonisation across supply chains.

Complementary Strengths

For organisations already using one tool, adopting the other can offer complementary benefits. SBTi users, for example, will find that much of their emissions accounting and target-setting work aligns with Ladder requirements. However, they may need to invest additional effort to meet the Ladder’s broader management and sustainability criteria. Similarly, organisations using CO₂ Performance Ladder can benefit from the scientific rigour of SBTi’s target validation process, which can enhance their credibility and accountability.

Summary at a Glance

SBTi and the CO₂ Performance Ladder are complementary tools for driving climate action. SBTi excels in aligning emissions reductions with science-based standards, while the Ladder provides a more holistic framework that incentivises supply chain decarbonisation. Together, they offer a robust approach to meeting ambitious sustainability goals.

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