Your customer is asking for SBTi targets. Now what?

You receive an email from your biggest client: “By 2027, we only want to work with suppliers who have science-based CO₂-targets. Can you demonstrate that you have SBTi targets?” Or your supplier portal suddenly contains questions about your climate goals.

Almost all large retailers and food producers have Science Based Targets. That might sound like their problem, not yours. But large retailers are imposing increasingly strict requirements on their suppliers. Colruyt Group, for example, has an explicit supplier engagement target: 67% of their suppliers must set SBTi goals. Others ask for insight into your climate strategy or apply sustainability criteria in tenders. This pressure is spreading throughout the entire supply chain. And as an SME in food or agriculture, you will have to deal with it sooner or later.

Still wondering if SBTi is right for your company? First, read why more and more SMEs are taking the plunge. Have you already decided to start? Then read here how to tackle it.

Good news: different rules apply to SMEs

Many SMEs are convinced that SBTi is impossibly complex. They see the reports from multinationals and mentally disengage. Understandable, but incorrect. The SBTi has developed a separate pathway for small and medium-sized enterprises, with significantly lower thresholds.

Specifically: you don't have to go through a commitment phase like large companies. You set your targets immediately. You don't have to set mandatory Scope 3 targets (although you do commit to measuring and reducing those emissions). The costs: 1,250 dollars for SMEs with a turnover of less than 5 million euros. For companies with a turnover between 5 and 50 million euros, it's 2,000 dollars. The validation process usually takes around 60 working days.

But don't be fooled by these lower thresholds. The SME pathway is achievable, but it's certainly not a checkbox exercise. You need a solid GHG-inventaris inventory. You commit to effective emissions reduction. And you report annually on your progress.

Do you qualify? The SBTi criteria

The SBTi applies strict conditions for the SME pathway.

All four must apply: your scope 1 and 2 emissions (location-based) combined are less than 10,000 tons of CO₂, you are not a subsidiary of a larger group, you are not in the oil and gas or financial sector, and you do not need to use sector-specific criteria.

Plus at least three of these four: fewer than 250 employees, revenue under €50 million, total assets under €25 million, and not a mandatory FLAG sector.

That last point deserves extra attention if you are in the food sector.

FLAG: what food and agri-businesses need to pay attention to

FLAG stands for Forest, Land and Agriculture. This is relevant for companies in the food sector, as some activities fall under stricter regulations.

• You fall under mandatory FLAG criteria if more than 20% of your total emissions (scope 1, 2 and 3 combined) are FLAG-related. Or if you are active in specific sectors AND have more than 5% FLAG emissions. These sectors are: forestry and paper products, agricultural production, animal production, food processing, food retail, and tobacco.
• In practice: FLAG is only relevant if you have to submit through the corporate pathway. This is because FLAG targets apply to scope 3, and SMEs do not need to set scope 3 targets. Do you meet the SME criteria? Then FLAG does not apply to you. Do you not meet the SME criteria? Then you fall under the corporate pathway and must determine whether FLAG requirements apply based on your scope 3 emissions.

The GHG Inventory

This is where the bulk of the work lies. And no, there are no shortcuts.

Scope 1 includes your direct emissions: natural gas, fuel oil, diesel for your own vehicles. If you have process emissions, these are also included here. Refrigerant leakage is also accounted for here. The SBTi requests a breakdown by subcategory: stationary combustion, mobile combustion, process emissions, and fugitive emissions.

Scope 2 is your purchased energy. Electricity (location-based is mandatory, market-based is also permitted), and potentially purchased heat or cooling.

Scope 3 encompasses your entire value chain. As an SME, you don't need to set a specific target for this, but you do commit to measuring and reducing it. A complete, detailed inventory is not required upon submission. This often accounts for the largest part of your footprint: raw materials, transport, packaging.

Practical tip: start with scope 1 and 2. You largely already have this data through your energy bills and fuel consumption. Scope 3 is more complex, but not impossible. And you don't need to formulate a reduction target for that. Not yet. Carbon Footprint? That's always the first step.

Regarding documentation: your inventory must comply with the GHG Protocol. You cover all relevant greenhouse gases (not just CO₂, methane, nitrous oxide, and refrigerants are often relevant in food). You need a clear description of your organizational boundaries and the sources of your emission factors. Up to 5% of your scope 1 and 2 emissions may be excluded, provided it is documented and substantiated.

Determining your target: the calculations

“Science-based” sounds abstract. In numbers, it's concrete: a minimum of 4.2% reduction per year, linearly, to remain in line with the 1.5°C scenario. For SMEs, only absolute targets are allowed. Intensity targets (per unit of product or per euro of turnover) are not an option. SBTi treats base years from 2020 onwards as 2020 to avoid further delaying climate action.

In practice, this means:

Your target formulation looks like this: “[Your company] commits to reducing absolute scope 1 and scope 2 emissions by X% by [target year], compared to base year [base year], and to measure and reduce scope 3 emissions.”

Choosing a base year: more flexibility than you think.

The SBTi accepts base years from 2015 onwards. You may use a fiscal year if that is more logical for your accounting. Choose a year for which you have reliable data and that is representative of your normal business operations. A year with exceptionally high or low consumption (due to a large order, renovation, or COVID-19) is not a good basis. And you choose your target year yourself, as long as it falls between 5 and 10 years after your submission date. 

The SBTi process: from inventory to validation

The process involves five steps. First, you prepare your GHG inventory: scope 1 and scope 2. Then you determine your reduction target based on the ambition table above. Next, you prepare your documentation and submit it via the SBTi Validation Portal. Validation by the SBTi takes an average of 60 working days. This is followed by publication and communication.

How long does the entire process take? 

The validation itself takes 60 days, but preparation depends on your starting point. Do you already have a carbon footprint? Then you can proceed quite quickly. If you're starting from scratch, you'll first need to build your GHG inventory — expect several months of preparatory work, depending on your data quality and the complexity of your scope 3.

Each year, you report your emissions and progress. Every five years, you review your target and revalidate if necessary.

What if your company grows? 

Suppose that after validation, you no longer meet the SME criteria, for example, because your revenue exceeds 50 million or you have more than 250 employees. Your existing targets will remain valid. Only at the next revalidation (after five years) might you need to switch to the corporate track. Therefore, growth is no reason to wait.

Attention: Net-Zero Standard V2 is coming

In March 2025, the SBTi launched a draft for version 2.0 of the Corporate Net-Zero Standard. Companies can set targets under the current standard until December 31, 2027. From January 1, 2028, V2.0 will be mandatory for new targets.

What does this mean? 

Scope 1 and scope 2 must have separate targets, whereas they can currently be combined. Stricter requirements will be introduced for scope 3: coverage will be adjusted per company instead of the current standard of 67%. And there will be more emphasis on demonstrable progress. You can no longer "set and forget": at the end of each target cycle (typically five years), you must evaluate and update your targets.

Those starting now will still fall under the current standard. However, prepare for stricter requirements by getting your scope 3 tracking in order.

Do you want a complete introduction to SBTi and how to get started with it? Reserve your spot in our webinar.

Getting started with SBTi: first steps

Three things you can do today.

1) Check if you meet the conditions using the criteria above. Pay particular attention to FLAG if you are in food or agriculture.

2) Gather your energy data from recent years. Invoices, consumption overviews.

3) Make an initial estimate of your Scope 1 and 2. It's often simpler than you think.

Your customers' demand isn't going away. The sooner you start, the more time you'll have to realistically plan your reduction pathway.

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