What SBTi Version 2.0 means for food and drink businesses

If you manufacture or supply food and drink products to major retailers, supermarkets or other food businesses, you'll know that sustainability is becoming an increasingly important part of commercial relationships. As these organisations work towards their own net zero commitments, they're looking more closely at emissions across their supply chains, including those associated with the products they purchase.

With SBTi Version 2.0 introducing additional requirements, including independent assurance for certain businesses, setting and validating science-based targets could become more complex and costly. If you've been considering SBTi, acting now could help you take advantage of the current standard before the new requirements become mandatory.

Key Takeaways

• SBTi Version 2.0 could make validation more complex and costly. Additional requirements, including independent third-party assurance, could mean more preparation, external fees and internal resources. 
  
  

• There's still an opportunity to use the current standard. The existing route for registering a commitment close on 31st January 2027, with subsequent submissions by 31st January 2028. Preparing now could help you avoid some of the additional requirements associated with Version 2.0.

   

• The retailers and manufacturers you supply may expect more detailed emissions information. As these organisations work towards their own net zero commitments, understanding your emissions and having a plan to reduce them could become increasingly important to your commercial relationships.

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  FLAG emissions bring additional requirements for food and drink businesses. Those within scope will need separate targets covering emissions from forest, land and agriculture.

What is SBTi Version 2.0? 

The Science Based Targets initiative (SBTi) provides businesses with a recognised framework for setting greenhouse gas emissions reduction targets in line with climate science. Its Corporate Net-Zero Standard sets out how organisations can establish near-term and long-term targets covering emissions from their own operations and wider value chains.

Version 2.0 is an update to this standard, with changes to how targets are developed, the information businesses need to provide and how progress is measured over time. There's also greater emphasis on demonstrating how businesses intend to deliver the reductions they've committed to.

For food and drink manufacturers, setting science-based targets can be particularly involved because so much of your carbon footprint may come from activities outside your direct control. Agricultural production, purchased ingredients, packaging and transport can all contribute to your emissions, which means having reliable information from the businesses supplying you is an important part of the process.

What's changing under SBTi Version 2.0?

Version 2.0 places greater emphasis on how businesses plan to achieve their emissions reduction targets and demonstrate progress over time. Some of the changes could also introduce additional work and costs, depending on the size of your business and the requirements that apply. There are several areas you should be aware of.

Climate transition planning

You'll need to give more consideration to how your targets will be achieved, including the actions, resources and investment required. This means looking at how emissions reduction plans fit alongside wider business priorities, including investment decisions and modelling the impact of different emissions reduction activities.

Scope 1 and 2 emissions

The updated standard proposes changes to target-setting requirements for emissions from your own operations and purchased energy. You'll need to review how the revised criteria apply to your business and whether your existing approach remains suitable.

Scope 3 (E&I and FLAG) emissions

Emissions across your wider value chain remain an important part of the standard. These can include everything from agricultural production and purchased ingredients to packaging, distribution and other activities associated with the businesses you buy from.

Reporting, assurance and accountability

Version 2.0 introduces additional requirements around reporting and independent assurance. For businesses classified as Category A under the updated standard, this includes having an independent validation base-year emissions data and associated required information.

This is separate from having your targets validated by SBTi. It involves an additional review of the emissions data and calculations supporting those targets, which could mean extra preparation, external fees and internal resources. If you have a complex supply chain or significant agricultural emissions, gathering the information required may be particularly involved.

The requirements are not the same for every business, so it is important to understand which SBTi company category applies to your organisation before deciding how to approach SBTi.

What are the SBTi deadlines for 2027 and 2028?

There are two important deadlines to be aware of, depending on whether you're registering your intention to set science-based targets or submitting those targets for approval.

Preparing an SBTi submission can take considerable time, particularly if you need to gather emissions data from multiple suppliers or account for agricultural emissions. If you're considering setting targets, starting the process now gives you more time to complete the work under the current standard and potentially avoid some of the additional requirements and costs associated with Version 2.0.

Why does SBTi matter for food and drink suppliers?

Many major retailers and food manufacturers have made commitments to reduce emissions across their wider value chains. As a significant proportion of these emissions can come from the products they purchase, they're increasingly looking beyond their own operations when assessing their environmental impact.

If you supply retailers, supermarkets or other food manufacturers, you may already be receiving requests for more detailed emissions information or being asked how you intend to reduce your impact. Even if these conversations haven't started yet, understanding your emissions and having a plan in place can help you prepare for future requirements.

There are also benefits beyond responding to requests from the businesses you supply. Understanding where your emissions come from can help identify opportunities to improve efficiency, work more closely with your own suppliers and make better-informed decisions about where to invest time and resources. With production costs and margins already under pressure, it's important that your sustainability plans take these commercial considerations into account.

What are FLAG emissions and why do they matter for food manufacturers?

Forest, Land and Agriculture (FLAG) emissions are an important consideration when preparing science-based targets. They cover emissions associated with activities such as agricultural production, livestock, fertiliser use and land management, including relevant changes in land use.

Food and beverage processing is one of the sectors covered by SBTi's FLAG requirements. If these apply to your business, you may need to set separate targets for emissions associated with agriculture and land use, alongside those from energy use and other industrial activities. The distinction matters because reducing emissions from agricultural production often requires a different approach to reducing emissions within a manufacturing facility.

You'll therefore need to understand which activities contribute to your FLAG emissions, how those emissions should be calculated and what information you'll need from the businesses supplying your ingredients and raw materials. This can be particularly challenging if you work with multiple agricultural suppliers, different production methods and varying levels of available data.

Why does the right carbon accounting methodology matter?

The way you calculate your emissions can make a significant difference to how accurately you understand your carbon footprint and, importantly, where you identify opportunities to reduce it.

Standard emissions factors are often used to estimate the impact of different activities. While these provide a useful basis for carbon reporting, they don't always reflect the specific circumstances of your business or the way your products are manufactured. In food production, for example, emissions can vary depending on agricultural practices, fertiliser use, crop types and land management. Using more detailed information, where it's available and appropriate, can help you understand these differences and identify where reductions may be possible.

Looking at emissions associated with individual products can be particularly useful. Rather than relying solely on your overall carbon footprint, you can begin to understand which activities contribute most to a product's emissions and what changes could make a difference. It can also help with supplier engagement, giving you a clearer understanding of where additional information is needed and where working together could help reduce emissions.

For SBTi validation, you'll need to demonstrate that your calculations are appropriate and supported by reliable evidence. But having more detailed information can also help you make better decisions about where to focus your emissions reduction efforts.

How can food and drink businesses prepare for SBTi validation?

Preparing for SBTi validation starts with understanding your current emissions position and whether the information you have is sufficient to meet the relevant requirements. This means reviewing your existing carbon footprint, checking that the appropriate Scope 1, 2 and 3 emissions are included and identifying any gaps in the data. You'll also need to assess whether FLAG requirements apply and how agricultural emissions should be accounted for.

Once your emissions inventory has been established, you can begin developing appropriate targets and identifying how those reductions could be achieved. Depending on the complexity of your operations, this may involve gathering more detailed supplier information, improving calculation methodologies and developing emissions reduction plans.

Once you've submitted your targets, SBTi Services will review the calculations and supporting information you've provided. They may ask for clarification or additional evidence before approving them, particularly where the methodology or assumptions need further explanation. Having accurate data and clear documentation from the outset can make this process easier and help avoid unnecessary delays.

It's also worth considering how you'll monitor progress once your targets are approved. Having reliable reporting processes and clear responsibilities in place can help you manage your commitments alongside your wider operations.

How can Trident help with SBTi target setting and validation? 

At Trident, we have extensive experience supporting businesses through the SBTi process, from calculating emissions and developing appropriate reduction targets to preparing submissions and responding to questions during validation.

Alongside this, we have specialist experience of Forest, Land and Agriculture (FLAG) requirements, which can make the process particularly complex for food and drink manufacturers. We've supported businesses with developing suitable carbon accounting methodologies, understanding emissions across agricultural supply chains and identifying opportunities to reduce them.

We can also help you understand how Version 2.0 could affect your business and whether progressing under the current standard is the right approach.

Our experience in practice 

One example of our work involved supporting a food producer in successfully achieving SBTi target validation, including the specialist requirements for FLAG emissions. At the time its targets were approved, it was one of just 252 corporate organisations worldwide with approved FLAG targets.

Our work went beyond preparing the targets for validation as we also developed reduction pathways for key products, identifying how their associated emissions could be halved. This involved looking closely at where emissions occurred across the products' supply chains and identifying practical opportunities to reduce them.

Our wider SBTi experience, combined with our specialist knowledge of FLAG requirements, means we can help you navigate the technical challenges while developing emissions reduction plans that reflect how your business operates. 

Considering SBTi? Now is a good time to review your options 

If you've been thinking about setting science-based targets, waiting could mean facing additional requirements, more preparation work and potentially higher costs under Version 2.0. Our net zero consultants can help you understand what's involved, assess your existing emissions data and identify the most appropriate route for your business. Whether you're starting from scratch or have already begun preparing your targets, we can help you make the most of the time available.