By ADEC Innovations
Climate disclosure is moving rapidly from voluntary to mandatory. For years, companies have leaned on frameworks such as the Science Based Targets initiative (SBTi) and CDP (formerly the Carbon Disclosure Project) to measure, manage, and disclose their greenhouse gas (GHG) emissions. What once was viewed as forward-looking sustainability leadership is now becoming the baseline expectation in global markets shaped by new regulatory demands.
At ADEC Innovations, we see these frameworks not as separate tracks, but as converging pathways that allow companies to prepare for—and even get ahead of—climate regulation.
The Power of Voluntary Frameworks
The SBTi provides validation that a company’s emissions reduction targets are consistent with the Paris Agreement’s ambition to limit global warming to 1.5 °C. Companies that commit to SBTs send a strong market signal: they are serious about aligning strategy with climate science. CDP, meanwhile, has become the world’s leading platform for corporate environmental disclosure. It is not just about transparency—CDP scoring influences investor confidence, customer preference, and even access to capital.
Together, SBTi and CDP create a powerful ecosystem. Organizations that use both are typically better equipped to handle new disclosure requirements under frameworks like the EU’s Corporate Sustainability Reporting Directive (CSRD) or the global IFRS S2 standards. By voluntarily engaging early, companies reduce the burden of compliance when regulations catch up.
Best Practices for Setting Science-Based Targets
Based on our work with clients across industries, several best practices consistently emerge:
- Secure leadership buy-in. Science-based targets are ambitious and organization-wide. Without executive sponsorship, they risk being sidelined.
- Understand the timeline. Once a company commits, it has 24 months to set, submit, and validate its targets. Planning ahead is essential.
- Build a reliable data foundation. Accurate, consistent greenhouse gas inventories—covering Scope 1, 2, and 3 emissions—are the backbone of credible targets.
- Engage the value chain. For most companies, Scope 3 emissions dwarf direct emissions. Supplier collaboration is often the only path to meaningful impact.
- Consider third-party assurance. Independent verification builds trust and improves data quality.
One beverage company illustrates this journey. Initially hesitant about Scope 3 disclosure, it identified packaging as its largest emissions hotspot. By working with suppliers and shifting to recycled materials, it turned a compliance challenge into a competitive advantage.
What’s Next: SBTi Net-Zero Standard V2.0
The SBTi is raising the bar. From 2027, all new near- and long-term targets must comply with its Corporate Net-Zero Standard V2.0. Key updates include:
- A public commitment to net-zero by 2050 at the latest.
- Publication of a climate transition plan within 12 months of validation.
- Separate, specific targets for Scope 1 and 2 emissions.
- Location-based Scope 2 targets, paired with either market-based targets or a zero-carbon electricity goal.
- Stricter Scope 3 requirements and mandatory external assurance.
- A new SME classification (“Category B”) designed to improve accessibility.
These changes will demand more rigor, but they also provide clarity. Investors, regulators, and customers increasingly expect such commitments.
The Regulatory Convergence
Across jurisdictions, climate regulation is converging with voluntary frameworks. The EU’s CSRD requires net-zero pathways, climate risk disclosure, governance, and internal carbon pricing—all areas already embedded in SBTi and CDP. The California Climate Accountability Package (SB 253 and SB 261) similarly overlaps with CDP’s disclosure model. Even state-specific rules, such as New York’s S4558B and Washington’s HB 1107 targeting apparel sustainability, align with value-chain emissions and due diligence requirements addressed in SBTi and CDP reporting.
The message is clear: what gets measured voluntarily today will be regulated tomorrow.
From Optional to Strategic
For sustainability leaders, the question is no longer whether to adopt voluntary frameworks, but how to maximize them. Setting science-based targets and disclosing through CDP is not only about meeting compliance halfway—it is about seizing strategic advantage. Companies that move early can:
- Streamline reporting and reduce duplication.
- Build resilience in operations and supply chains.
- Attract climate-conscious investors and customers.
- Demonstrate leadership at a time when credibility is scarce.
At ADEC Innovations, we believe SBTi and CDP are no longer “nice-to-haves.” They are essential tools for navigating the fast-evolving intersection of voluntary ambition and regulatory obligation. Companies that embed these frameworks into their strategy today will be tomorrow’s climate leaders.
