| By Frances Schwartzkopff As the world hurtles toward 3C of warming, corporate executives have just learned they'll still need to demonstrate that their businesses are aligned with a 1.5C trajectory — if they're to get their climate claims verified. It's a strange split-screen moment that has the potential to frustrate companies across jurisdictions. But according to the Science Based Targets initiative, the world's main standard setter for corporate climate targets, it's the only responsible way forward. "Scientific evidence shows that even small increases in global temperature — every 0.1C — exacerbate risks of catastrophic impacts, such as more extreme weather events and irreversible tipping points," SBTi said in a report on Tuesday. It may become a rare example of a climate watchdog actually holding on to the hallowed 1.5C goal that others are increasingly dismissing as unachievable. The Net-Zero Banking Alliance, for example, is considering axing the goal after its North American members mounted a high-profile exodus. SBTi acknowledges that 1.5C is a high bar, and says it's making some adjustments to accommodate companies based on their size and geographic location. The idea is to "make the standards more accessible to companies operating in different contexts," said Alberto Carillo Pineda, chief technical officer at SBTi.  Firefighters on Charlie Canyon Road during the Hughes Fire in Castaic, California on Jan. 22, 2025. Photographer: Jill Connelly/Bloomberg Adding complexity to the problem, new research shows a company with SBTi targets isn't necessarily on a 1.5C pathway. Recent analysis by Morningstar Sustainalytics based on the 9,500 companies within its coverage universe found that none of the companies having sought SBTi verification actually has a transition plan that aligns with 1.5C. "Having science-based targets does not necessarily imply that a company is on the right track to achieving net zero by 2050, in line with the Paris Agreement," Hortense Bioy, head of sustainable investing research at Morningstar, said in a note last month. The analysis found that 25% of companies with SBTi targets are on a pathway that's somewhere between 1.5C and 2C. The bulk — or 56% of companies with SBTi targets — are on a pathway that's aligned with between 2C and 2.5C of warming, it said. Morningstar Sustainalytics said its analysis looks not just at stated targets, including those set in accordance with SBTi, but also the actions companies are taking to reduce emissions. According to the latest United Nations Emissions Gap report, the world could be as much as 3.1C hotter by the end of the century than it was before the industrial age, based on existing policies. That's a scenario that the group describes as "catastrophic." Far from seeing such forecasts as reason to be less ambitious, SBTi is now urging businesses and investors to seize this as a critical moment to get back on track. "As the window to stabilize global temperatures below 1.5C narrows, and the effects of small temperature increases become clearer, the case for strengthening the climate ambition becomes stronger," SBTi said in Tuesday's report. Such ambition "must also lead to meaningful action" that can actually cut the accumulation of greenhouse gases in the atmosphere, it said. For now, the political will to achieve that goal is showing signs of flagging across the globe. In the US, the administration of President Donald Trump has taken a hatchet to the climate policies of his predecessor, and dubbed net zero a "sinister" goal. In Europe, corporate backlash against red tape has led officials there to propose dramatic cuts to planned environmental regulations. "The temporary breach of the 1.5C global warning threshold in 2024 and growing impact of climate change underscore the critical importance of accelerating efforts to phase out greenhouse gas emissions from our economy," SBTi said. To speed up the transition, SBTi is proposing that companies move to low-carbon electricity no later than 2040. To better tackle so-called Scope 3 emissions, it's considering replacing requirements that companies target 67% of carbon in their value chains in the near term and 90% in the long term. Instead, SBTi proposes that firms prioritize the heaviest sources of pollution and those with which they have the greatest leverage. "Companies with the capacity to transition faster than the 1.5C-aligned pathway should do so, reflecting their ability to lead in mitigating climate change," SBTi said. "Additionally, companies based in high-income countries should establish targets that surpass the minimum requirements. Given their historical responsibilities and access to resources, this would reflect a greater level of ambition." | 
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