SBTi Targets for Indian Manufacturers: How Science-Based Target Setting Works in Practice

Science-Based Targets (SBTs) have moved from a voluntary leadership signal to a near-mandatory requirement for Indian companies with global customers, investors, or supply chain relationships. If your European, American, or Japanese customer has committed to net zero, they are likely asking their Indian suppliers — you — to set SBTi-validated targets. This guide explains how SBTi target-setting works for Indian manufacturers and what the process actually involves.

What is SBTi?

The Science Based Targets initiative (SBTi) is a collaboration between CDP, the UN Global Compact, WRI, and WWF. It provides companies with a defined pathway to reduce GHG emissions in line with climate science — specifically, the Paris Agreement goal of limiting global warming to 1.5°C above pre-industrial levels.

SBTi validation means an independent body has reviewed your emission reduction targets and confirmed they are consistent with what the science says is needed. A validated SBT is not just a company commitment — it is a credible, externally verified climate pledge.

SBTi for Indian Companies: Current Status

As of 2025, over 9,000 companies globally have committed to or validated science-based targets. Indian companies are catching up rapidly, driven by:

• Customer requirements: European OEMs, retailers, and brands increasingly mandate SBTi commitments from their Indian suppliers
• Investor pressure: FII investors and ESG-focused funds screen for SBTi commitments
• BRSR Leadership indicators: SBTi alignment is referenced in BRSR’s advanced disclosure requirements
• CDP questionnaire scoring: SBTi status improves CDP scores significantly

Near-Term vs Long-Term Targets: What SBTi Requires

SBTi requires companies to set two types of targets:

For most Indian manufacturers, the near-term Scope 1 + 2 target is the primary focus initially. Scope 3 targets are mandatory only if Scope 3 emissions exceed 40% of total Scope 1+2+3 emissions — which is the case for most manufacturers.

Sector-Specific Pathways: Why This Matters for Indian Industry

SBTi has developed sector-specific decarbonisation pathways for heavy industry sectors. These matter significantly for Indian manufacturers:

• Steel (SBTi Steel Pathway): Emissions intensity target per tonne of steel. Allows for technology constraints in India (coal-based DRI/BF-BOF) while requiring a trajectory toward green steel.
• Cement (SBTi Cement Pathway / WBCSD-CSI): Net emissions intensity per tonne of cementitious product. Acknowledges clinker process emissions as unavoidable.
• Textiles / Apparel: Absolute contraction approach — significant Scope 3 requirements given supply chain emissions.
• Chemicals / Pharma: Follows cross-sector pathway with sector guidance in development.

The SBTi Target-Setting Process: Step by Step

Step 1: Establish a Validated GHG Inventory

You cannot set science-based targets without a solid baseline. Your Scope 1 and 2 inventory must cover at least one full reporting year and follow GHG Protocol Corporate Standard. If Scope 3 is likely to be >40% of your total footprint, you also need a Scope 3 inventory covering material categories.

Step 2: Choose Your Base Year

Your base year should be the most recent year for which you have complete, reliable data. SBTi requires the base year to be no earlier than 2015 for near-term targets. For Indian manufacturers, FY 2022-23 or FY 2023-24 are the most common base years currently.

Step 3: Model Your Target Using SBTi Tools

SBTi provides sector-specific target-setting tools (Excel-based) for most sectors. For Indian companies, the key variables are:

• Base year absolute emissions (Scope 1 + 2 in tCO₂e)
• Target year (5-10 years out)
• Sector pathway selection
• Whether to use absolute contraction or intensity approach

Step 4: Submit to SBTi for Validation

Submit your target letter and supporting documentation through the SBTi portal. As of 2025, the validation fee is USD 9,500 for large companies. The validation process takes approximately 6-9 months. SBTi reviewers will scrutinise your boundary, methodology, and target ambition.

Step 5: Annual Progress Tracking and Public Disclosure

Once validated, you must disclose progress annually in your sustainability report or BRSR. SBTi monitors commitments and can remove companies that do not progress. This is where your GHG accounting system must be robust enough to track year-on-year reductions accurately.

Common Challenges for Indian Companies Setting SBTi Targets

• Weak baseline GHG data: If your Scope 1 and 2 inventory has data quality gaps, targets set on this base will be challenged during validation
• Grid electricity dependence: India’s coal-heavy grid (0.716 kgCO₂/kWh) makes Scope 2 reduction challenging without renewable energy procurement or captive solar
• Scope 3 magnitude: For Indian manufacturers with coal-heavy supply chains, Scope 3 targets require supplier engagement that is difficult to operationalise
• Technology pathway uncertainty: Green steel and green cement technologies are not yet commercially available at scale in India — long-term targets must account for this

How Planetary Plus Supports SBTi Target Setting

We help Indian manufacturers through the complete SBTi journey: from building the GHG inventory that serves as your baseline, through selecting the right sector pathway and target type, to preparing the submission documentation for SBTi validation.

We have worked with cement, steel, and auto component clients on SBTi readiness, and we understand the specific challenges of Indian manufacturing — coal-heavy processes, grid electricity constraints, and supply chain data limitations — that generic SBTi guidance does not address.

If you are considering SBTi targets or have been asked by a customer or investor to commit, get in touch for a readiness assessment.