SBTi Target Setting and Tracking: From Press Release to Measured Progress

The SBTi hit 10,000 validated companies in January 2026. That's a genuinely impressive number — up from 1,000 in 2021. But here's a question nobody is asking loudly enough: how many of those 10,000 companies can actually tell you, right now, whether they're on track against their near-term target?

We'd bet it's fewer than half.

Not because they don't care. Because tracking progress against a science-based target requires a different kind of infrastructure than setting one. Setting a target is a modelling exercise. You run the SBTi Target Setting Tool, pick your pathway (1.5°C, well-below-2°C), choose your method (absolute contraction, sectoral decarbonisation), get the numbers validated. It's hard work, but it's a one-time project. Tracking progress is operational. It happens every month, every quarter, every year — and it demands emissions data at a granularity that most companies simply don't have.

We built SBTi target tracking into Carbonly because we kept seeing the same pattern. A company spends $50,000-$120,000 on consultants and validation fees to set science-based targets. They get the press release. They put the logo on the website. Then twelve months later, someone asks "are we on track?" and the sustainability manager opens a spreadsheet.

The gap between commitment and measurement

KPMG's 2024 sustainability survey found 37% of ASX100 companies have SBTi-aligned targets. ACSI reports 66% of ASX200 companies have net zero commitments of some kind. The Investor Group on Climate Change tested twelve major ASX-listed companies in high-emitting sectors against a capital allocation framework and found exactly one met the high-alignment threshold in more than half the criteria.

These numbers tell you something important. Australian companies are willing to commit. They're not yet equipped to track.

The SBTi itself requires annual public disclosure of your GHG inventory and progress against validated targets — typically through CDP's climate change questionnaire. From 2025, the first wave of mandatory five-year target reviews kicked in, requiring companies validated in 2020 to reassess and potentially resubmit their targets within twelve months. And the upcoming V2 Net-Zero Standard (expected mid-2026) will tighten measurement, reporting, and verification requirements further, introducing scope-specific targets set on fixed five-year timeframes and enhanced accountability for Scope 3.

That's a lot of annual reporting obligations stacking up. And they all depend on one thing: reliable, granular, up-to-date emissions data.

What tracking actually requires (it's more than an annual number)

An SBTi near-term target typically reads something like: "Reduce absolute Scope 1 and 2 emissions 42% by 2030 from a 2020 base year." Clean sentence. The tracking infrastructure behind it is anything but.

To know whether you're on pace, you need emissions calculated at the source level — by facility, by fuel type, by electricity account, by gas type. You need it broken down by scope, with Scope 2 split between location-based and market-based methods. You need it current, not twelve months stale. And you need it consistent with your base year methodology so the comparison is valid.

That last point catches people. If your base year inventory used the national average grid factor (0.62 kg CO2-e/kWh from the NGA Factors 2025) but your current-year tracking uses state-based factors (Victoria at 0.78, Tasmania at 0.20), you're not comparing like with like. If your base year included an estimate for refrigerant losses but your current-year inventory doesn't track them at all, your apparent "reduction" is partly a data gap. Auditors will find this. SBTi's five-year review process will find this.

In Carbonly, targets link directly to measured emissions data. Not to an annual number someone typed in from a consultant report. To the actual facility-level, scope-level, gas-level data the system calculates from utility bills, fuel records, and operational inputs. The target module tracks CO2, CH4, N2O, HFCs, PFCs, SF6, and NF3 individually — because SBTi requires you to report by gas, and because aggregating everything into CO2-e hides the detail you need for meaningful tracking.

Near-term versus long-term versus net-zero: three different tracking problems

SBTi distinguishes between near-term targets (5-10 years out, aligned with 1.5°C or well-below-2°C), long-term targets (by 2050), and full net-zero commitments (90%+ absolute reduction plus neutralisation of residuals). These aren't just different time horizons. They're different tracking problems.

Near-term targets are the most tractable. Five to ten years gives you a manageable number of interim checkpoints. If you committed to 42% absolute reduction by 2030 from a 2020 base, you're roughly looking for 4.2% per year. You can set annual milestones, measure against them, and identify early whether you're drifting. This is where most Australian companies should focus their tracking effort, because it's where SBTi will scrutinise you first during the five-year review.

Carbonly's target module lets you set interim milestones at whatever frequency makes sense — annual, biannual, quarterly. Each milestone pulls the latest measured emissions and compares them against the linear (or modelled) reduction pathway. Green, amber, red. Are you on track, drifting, or off pace? That sounds simple, but doing it with actual data rather than estimates is the entire challenge.

Long-term targets are harder to track meaningfully because 2050 is still far enough away that year-on-year variance doesn't tell you much. A company could be ahead of pace in 2027 and behind by 2032 depending entirely on when major capital projects land. The useful tracking metric here isn't "are we on the line" but "are we making structural changes that compound over time." That's why carbon reduction planning matters — it connects specific actions (electrify fleet, switch to PPA, replace gas boilers) to projected abatement, so you can see whether your action pipeline is big enough to reach the long-term number.

Net-zero targets add another layer. The SBTi Net-Zero Standard requires 90%+ absolute reduction before you can claim net zero, with only the residual 5-10% addressed through carbon removals. Tracking net-zero progress means tracking both your reduction pathway and your residual emissions — and being honest about the gap. We wrote about this distinction in detail in our piece on what net zero claims actually mean in Australia.

The Scope 3 tracking problem nobody has fully solved

We need to be upfront about this. Scope 3 target tracking is harder than Scope 1 and 2 by an order of magnitude. And anyone who tells you otherwise is selling something.

SBTi requires a Scope 3 target when indirect emissions exceed 40% of total — which they do for most companies. You need to cover at least 67% of Scope 3 emissions for near-term targets. That means tracking progress across categories like purchased goods and services (Category 1), upstream transportation (Category 4), business travel (Category 6), and use of sold products (Category 11).

The data problem is real. Your suppliers might not report emissions at all. Spend-based estimates carry 30-40% error margins. Hybrid approaches mixing supplier-specific data with spend-based fill-ins create methodological inconsistencies that make year-on-year comparison shaky.

Carbonly tracks all 15 Scope 3 subcategories and supports multiple calculation methods — spend-based, supplier-specific, average-data, and hybrid. But we don't pretend that Scope 3 tracking delivers the same precision as Scope 1 and 2. It doesn't. The SBTi knows this too, which is why the draft V2 standard introduces a more "focused and flexible" framework for Scope 3 that prioritises the most emission-intensive activities rather than requiring blanket coverage. That's a pragmatic shift, and we think it's the right one.

For Australian companies, the practical approach is to track Scope 3 at whatever level of granularity your data supports, improve it year on year, and be transparent about your methodology and its limitations. AASB S2 gives modified liability protection for Scope 3 disclosures in the early years precisely because everyone knows the data isn't perfect yet.

How AASB S2 makes SBTi tracking non-optional

Even if the SBTi's own annual reporting requirements weren't enough motivation, AASB S2 makes target progress tracking a regulatory disclosure obligation for reporting entities.

Paragraph 33 requires disclosure of any climate-related targets, including the metric used, the objective (mitigation, adaptation, or conformity with a science-based initiative), the base period, and interim milestones. Paragraph 34 goes further — you must describe your approach to setting and reviewing targets and the metrics used to monitor progress. And from your second reporting period, paragraph 14(c) requires quantitative progress reporting against previously disclosed transition plans.

For companies with SBTi-validated targets, this creates a direct line between your SBTi commitment and your statutory disclosure. Your auditor will check whether the target you disclosed last year matches what the SBTi has on file, whether your reported emissions are consistent with your base year methodology, and whether your interim progress is disclosed with the same rigour as your financial metrics.

That's why the connection between target and measurement matters so much. If your SBTi target says "42% reduction by 2030 from 2020 baseline" and your AASB S2 disclosure shows current-year emissions, your auditor needs to verify that both numbers come from the same source, use the same factors, and follow the same methodology. A target set by one consultant and emissions measured by a different consultant two years later, using a different edition of the NGA Factors and a different organisational boundary? That's a finding waiting to happen.

What we built and what it does

Carbonly's target module is built specifically for this connection between commitment and measurement.

Each target carries an SBTi alignment flag, a status tracker (committed, targets set, validated), a pathway designation (1.5°C, well-below-2°C), and a category marker (near-term, long-term, net-zero). Targets can be absolute, intensity-based, or renewable energy percentage-based — matching the three types SBTi validates. Interim milestones create year-by-year checkpoints that pull directly from measured emissions, not from manually entered progress updates.

The critical design decision was linking targets to actual emissions data rather than having a separate "target tracking" module where someone enters numbers. Your target baseline is your measured base-year emissions. Your current position is your measured current-year emissions. Progress is calculated, not reported. And every data point in that chain carries an audit trail back to the source document — the electricity bill, the fuel card record, the gas invoice.

For Scope 1 and 2, this means tracking by facility, by source, by gas. For Scope 3, it means tracking by category with methodology documentation so you (and your auditor) can see exactly how each number was derived.

Does the system guarantee SBTi validation? No. Validation depends on SBTi's assessment against their criteria, which change periodically — the V2 standard expected in mid-2026 will shift requirements again. What the system does is give you the measurement infrastructure to know whether you're on track, identify where you're falling behind, and produce the documentation your auditor and SBTi reviewer will need.

The five-year review is coming for early adopters

This matters right now because of timing. Companies that validated targets in 2020 and 2021 are hitting their mandatory five-year review window. The SBTi's December 2025 guidance gives companies twelve months from their trigger date to complete the review, with revised targets submitted for validation if needed.

That review asks: are your targets still aligned with the latest science? Have your emissions actually decreased? Is your methodology still current?

If you don't have a system tracking your progress year by year, that review becomes a scramble. We've seen it happen. A company validated targets in 2020 using one consultant, switched to a different consultant for annual reporting, never reconciled the methodologies, and now faces a five-year review with three years of emissions data that doesn't match the base year. Fixing that takes months and costs $30,000-$60,000 in consultant fees. It shouldn't have to.

And with the SBTi's new expanded status categories — active, extended, expired, inactive, withdrawn, archived — falling behind on your review doesn't just mean a quiet extension anymore. It means a public status change on the Target Dashboard. Investors and customers check that dashboard. We know because they tell us they do.

Honest limitations

A few things we won't pretend about.

SBTi methodology changes. The current V1.3 standard will coexist with V2 until December 2027, after which V2 becomes mandatory for new targets. If you set targets under V1.3, you may need to recalibrate for V2. Our system tracks which standard version your target aligns to, but predicting future methodology changes is obviously outside anyone's control.

FLAG pathways are still difficult. Companies in land-intensive sectors — agriculture, food, forestry — face sector-specific requirements that demand data most Australian companies don't have yet. Woolworths committed to a FLAG target of 40% reduction by FY2033. That's ambitious, and tracking progress against it requires agricultural supply chain data at a level of detail that's genuinely hard to get.

Scope 3 precision has real limits. We track it. We report on it. But a spend-based Scope 3 estimate for purchased goods and services won't move much year on year unless your procurement mix or suppliers' reported data actually changes. Don't mistake a flat Scope 3 number for zero progress — it might just mean your data resolution isn't fine enough to detect the change.

And Australia's 2035 NDC (62-70% below 2005 levels) will eventually flow through into updated SBTi country-level pathways. That could shift what "1.5°C-aligned" means for Australian companies specifically. We're watching that space, but it hasn't played out yet.

The measurement gap is the credibility gap

The gap between SBTi commitment and SBTi progress isn't a strategy problem. Most companies know what they need to do — electrify, switch to renewables, engage suppliers, improve efficiency. It's a measurement problem. Can you demonstrate, with auditable data, that you did those things and that they produced the reduction your target pathway requires?

If your answer is "we'll know when the consultant does next year's inventory," that's not tracking. That's hoping.

Start with what you can measure. Get your Scope 1 and 2 data flowing from actual bills and records. Set your baseline properly. Link your SBTi target to measured emissions so progress updates itself as data comes in. Then work on Scope 3, category by category, improving data quality each year.

The press release was step one. The measurement system is step two. And it's the step that actually matters.

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