Illustrative example: Northstar Joinery has 120 tonnes of annual Scope 1 and 2 emissions and chooses a 42 percent reduction target, giving it a required cut of 50.4 tonnes by its target year. That is the basic maths behind how to set science based targets as an SME—but the hard part is deciding what belongs in the baseline, what the business can control, and whether the target follows current SBTi criteria.
You don’t need a sustainability team of ten people. You do need a defensible emissions inventory, a sensible boundary and a plan that survives questions from customers, lenders and your own finance director.
“We’re too small for science-based targets”
“We have 35 employees. Surely this is for listed companies.” That objection comes up regularly. It’s understandable, but size doesn’t make a target credible. A smaller manufacturer can have more concentrated emissions than a large office-based group, particularly where gas, fuel, refrigerants or purchased materials are involved.
The Science Based Targets initiative, or SBTi, provides routes intended for smaller organisations as well as larger companies. Its current rules and submission options can change, so use the SBTi’s official guidance before committing to a validation route.
An SME can also set a science-aligned target without immediately paying for formal validation. That may be the right starting point if you need a credible customer response now and want to improve data quality before submitting. The contrarian point is that a badge won’t fix weak data. A well-evidenced internal target is more useful than a validated target built on guesses.
Define the business and emissions boundary first
“Our landlord pays the energy bills, so we don’t have emissions.” A London design agency made up of leased offices might say that, but its electricity, commuting, business travel, cloud services and purchased goods can still be material.
Start by listing the legal entities, sites, vehicles, leased assets and activities included in the target. Choose either operational control or financial control, then apply that approach consistently. The GHG Protocol control approach guide explains the practical difference, which matters when your company operates a subsidiary, franchise or shared site.
Your inventory should follow the three GHG Protocol scopes:
- Scope 1: direct emissions from boilers, company vehicles, industrial processes and refrigerant leaks.
- Scope 2: purchased electricity, heat, steam or cooling.
- Scope 3: value-chain emissions such as purchased materials, freight, waste, business travel, employee commuting and use of sold products.
Use the GHG Protocol Corporate Standard for the accounting structure. Do not start by choosing a percentage reduction. First establish what the percentage will actually cover.
One caveat: perfect organisational boundaries are rare in an SME. If data is unavailable for a minor leased site, document the exclusion, estimate its likely effect and set a deadline for fixing it. A transparent limitation is better than false precision.
Build a baseline you can defend
“We already know our footprint because we have a spreadsheet.” Perhaps. But a spreadsheet containing one annual electricity total and a supplier estimate isn’t necessarily a baseline suitable for target setting.
Choose a base year with reliable, representative data. Avoid a year distorted by a factory closure, an acquisition, severe weather or an unusual production shutdown unless you explain the distortion and have a clear restatement policy.
Gather activity data before applying emissions factors. Typical inputs include:
- gas and electricity in kilowatt-hours;
- litres of diesel or petrol;
- refrigerant top-ups in kilograms;
- tonnes of purchased steel, timber, plastics or food ingredients;
- kilometres or spend for freight and business travel;
- kilograms of waste by treatment route; and
- supplier-specific product carbon data where it has been independently prepared.
For UK reporting, the government’s SECR guidance is a useful reference even when your company is not legally required to report under SECR. It sets out practical expectations around energy use, emissions and intensity ratios.
Then calculate the baseline: activity data multiplied by the relevant emissions factor. For example, 240,000 kilowatt-hours of gas multiplied by an assumed factor of 0.18 kilograms of carbon dioxide equivalent per kilowatt-hour equals 43,200 kilograms, or 43.2 tonnes, of Scope 1 emissions. Label assumptions clearly and retain invoices, meter readings and factor sources.
The less comfortable truth is that Scope 3 will often be less precise. That isn’t a reason to ignore it. It is a reason to rank categories by likely significance and improve the biggest uncertainties first. Our guide to carbon accounting spreadsheets versus software for SMEs covers when a simple system stops being reliable.
Choose the right target route
“Should we promise net zero by 2050, or submit a near-term target to SBTi?” These are related decisions, not interchangeable ones.
A near-term target normally covers roughly five to ten years from the base year and focuses on rapid, measurable emissions reductions. A net-zero target adds the long-term requirement to reach deep emissions cuts and neutralise residual emissions in line with SBTi rules. Many SMEs should begin with the near-term target because it produces decisions that can be budgeted this year.
There are three practical routes:
| Route | Best suited to | What it involves | Main caution |
|---|---|---|---|
| SBTi SME route | Smaller businesses wanting a recognised framework | Use the applicable simplified criteria, inventory and submission process | Criteria and submission arrangements can change |
| Full SBTi route | Larger or complex SMEs with significant value-chain emissions | Set targets across relevant scopes and meet full validation requirements | More data, governance and review time |
| Science-aligned internal target | Businesses building capability before formal submission | Use recognised methods, publish assumptions and track progress | Don’t imply SBTi validation where none exists |
Check the latest eligibility rules before selecting the SME route. The business may need to address Scope 3 if it represents a significant share of total emissions, and some sectors have additional requirements. If you sell to a large company, ask what evidence it actually needs. A procurement portal may require a public commitment, while another customer may only need your footprint and reduction plan.
That distinction saves money. Formal validation can be worthwhile, but it isn’t automatically the best first use of a small sustainability budget.
Set the reduction target and delivery plan
“Can we just choose 30 percent by 2030?” Not responsibly. The percentage must follow the applicable science-based method, your base year and the scopes included.
For the illustrative Northstar Joinery example, a 42 percent reduction from 120 tonnes means reaching 69.6 tonnes in the target year. That is not a plan yet. The company would need to identify the projects that deliver the 50.4-tonne reduction, such as replacing a gas-fired drying process, switching electricity supply, reducing timber waste and improving freight efficiency.
Translate the target into annual actions and owners:
- replace the oldest gas boiler by 2027, owned by operations;
- procure renewable electricity where the contract and evidence are acceptable, owned by finance;
- reduce material waste per finished unit by 20 percent, owned by production; and
- collect supplier-specific data for its five largest purchased-material categories, owned by procurement.
Set both absolute and intensity measures where they answer different questions. Tonnes of carbon dioxide equivalent show whether total emissions are falling. Tonnes per product, employee or £1 million of revenue show whether efficiency is improving as the business grows. Neither measure excuses rising absolute emissions indefinitely.
Need a broader structure for the actions? Our guide to building a net zero roadmap can help turn targets into a sequenced programme.
Talk to our carbon audit team if you want an independent check on your baseline, boundary and proposed target before publishing it.
Handle Scope 3, offsets and public claims carefully
“We’ll reduce what we can and offset the rest.” That sentence creates more risk than many SMEs realise.
Carbon credits don’t reduce your company’s own emissions. They finance a project elsewhere, and their quality varies considerably. Reduction should come first: energy efficiency, electrification, lower-carbon materials, logistics changes and supplier engagement usually deserve the budget before credits.
When residual emissions remain, describe credits accurately and follow the relevant SBTi rules. Don’t say the business has achieved net zero because it bought credits. Our guide to what makes a carbon credit high quality explains additionality, permanence, leakage and verification in practical terms.
Scope 3 claims need the same discipline. If you use spend-based estimates for purchased goods, say so. If a supplier gives you a product footprint, check the boundary, method and verification. A smaller number is not automatically a better number; sometimes it simply reflects missing categories.
The contrarian caveat is worth stating plainly: a modest target with a credible delivery budget can be more persuasive than a dramatic pledge with no capex, no owner and no review process.
Track progress and keep the target credible
“Once we publish the target, the work is done.” It isn’t. A science-based target is a management control, not a framed certificate.
Review emissions at least annually, preferably alongside financial planning. Record activity data, emissions factors, acquisitions, disposals, structural changes and any base-year restatement. Report progress in tonnes, percentage change from the base year and a relevant intensity ratio.
Give one director clear accountability. Finance should control the evidence trail, operations should own reduction projects, procurement should engage suppliers and the board should approve material changes. This is where a carbon audit earns its keep: it tests whether the published number can be traced back to bills, mileage, production records and supplier data.
Recalculate the target when the business changes materially. An acquisition can make the original boundary obsolete. A product redesign can move emissions from purchased goods into use of sold products. Pretending nothing changed is not consistency; it is bad governance.
For most SMEs, the sensible order is simple: measure, define, set, fund, review. Don’t wait for perfect Scope 3 data before reducing electricity and fuel. Don’t publish a target before knowing who will pay for delivery.
FAQs
Do small businesses have to set science-based targets?
No. Most UK SMEs are not legally required to set an SBTi target. Customers, lenders or tender requirements may still ask for one. If you make a science-based claim, be clear whether the target has been formally validated by SBTi or is an internally developed target aligned with recognised criteria.
How long does it take to set a target?
A straightforward SME with complete energy and fuel records may produce a credible baseline in four to eight weeks. Complex Scope 3 data, leased sites and multiple entities take longer. The target itself can be drafted quickly; checking boundaries, assumptions and delivery costs is what prevents weak commitments.
Do science-based targets include Scope 3 emissions?
They may. The requirement depends on the proportion of your total emissions arising from Scope 3 and the route or sector criteria that apply. Don’t assume a simplified SME route removes all value-chain responsibility. Screen Scope 3 early and document which categories are included, estimated or excluded.
Can an SME use carbon offsets to meet its target?
Offsets or carbon credits should not replace direct emissions cuts. They may have a role in addressing residual emissions under the relevant rules, but purchasing them does not reduce your Scope 1, 2 or 3 inventory. Check project quality, claims guidance and the current SBTi requirements before making any public statement.
Want a target that your accounts team, customers and operations director can all stand behind? Arrange a practical carbon audit discussion and we’ll help you work from evidence rather than guesswork.
Frequently asked questions
Do small businesses have to set science-based targets?
No. Most UK SMEs are not legally required to set an SBTi target. Customers, lenders or tender requirements may still ask for one. If you make a science-based claim, be clear whether the target has been formally validated by SBTi or is an internally developed target aligned with recognised criteria.
How long does it take to set a target?
A straightforward SME with complete energy and fuel records may produce a credible baseline in four to eight weeks. Complex Scope 3 data, leased sites and multiple entities take longer. The target itself can be drafted quickly; checking boundaries, assumptions and delivery costs is what prevents weak commitments.
Do science-based targets include Scope 3 emissions?
They may. The requirement depends on the proportion of your total emissions arising from Scope 3 and the route or sector criteria that apply. Don’t assume a simplified SME route removes all value-chain responsibility. Screen Scope 3 early and document which categories are included, estimated or excluded.
Can an SME use carbon offsets to meet its target?
Offsets or carbon credits should not replace direct emissions cuts. They may have a role in addressing residual emissions under the relevant rules, but purchasing them does not reduce your Scope 1, 2 or 3 inventory. Check project quality, claims guidance and the current SBTi requirements before making any public statement.
