How to Set Science-Based Targets as an SME

Introduction

Setting science-based climate targets is becoming a key expectation for companies of all sizes under the Corporate Sustainability Reporting Directive (CSRD). For small and growing businesses (SMEs), this can seem complex — but it doesn’t have to be. By following simplified methods and using the Science Based Targets initiative (SBTi) for SMEs, you can create credible, proportionate targets that demonstrate climate commitment and satisfy customer and investor expectations.

This guide explains what science-based targets are, why they matter under CSRD, and how small and growing businesses (SMEs) can set and track them step by step.

What Are Science-Based Targets?

Science-based targets (SBTs) align a company’s greenhouse gas (GHG) reduction goals with the latest climate science — specifically, limiting global warming to 1.5°C above pre-industrial levels, as outlined in the Paris Agreement.

For small and growing businesses (SMEs), these targets:

• Provide a clear emissions reduction roadmap.
• Strengthen trust with clients, banks, and investors.
• Align with the CSRD requirement to disclose GHG targets and transition plans.
• Support access to green finance and supply chain opportunities.

The VSME Standard (B3 and C3 disclosures) encourages SMEs to set proportional climate targets — even if they are not yet validated by SBTi — as part of responsible transition planning.

Step-by-Step: Setting Science-Based Targets for SMEs

Step 1: Measure Your Current Emissions

Start by quantifying your Scope 1 and Scope 2 emissions:

• Scope 1: Direct emissions from your own fuel use (vehicles, boilers, machinery).
• Scope 2: Indirect emissions from purchased electricity or heating.

You can estimate these using utility bills, fuel invoices, or data already collected for your CSRD energy and GHG reporting.

Tip: SMEs can use free online calculators (like the SBTi SME tool or GHG Protocol tools) without needing consultants.

Step 2: Choose Your Target Type

SBTi offers two main SME-friendly pathways:

1. Near-term targets: Commit to reducing Scope 1 and 2 emissions by at least 50% within 5–10 years.
2. Long-term net-zero targets: Commit to achieving net-zero by 2050 (optional for SMEs).

If you cannot commit to SBTi validation yet, you can still set internal science-aligned targets using the same principles — these are accepted under CSRD as “credible climate transition targets.”

Step 3: Register or Publish Your Commitment

If you choose SBTi validation, complete the SME Commitment Letter via the SBTi SME portal. This step is free and requires only your company details and basic emissions data.

Alternatively, document your commitment internally and publish it in your sustainability report or website — ensuring it includes:

• The target year and reduction percentage.
• The baseline year and emissions covered.
• Planned actions to achieve it.

Step 4: Plan Reduction Actions

Identify practical steps that will reduce your emissions. Common SME actions include:

• Switching to renewable electricity.
• Upgrading lighting, insulation, or machinery for efficiency.
• Reducing travel or switching to electric vehicles.
• Encouraging remote work or shared transport.
• Engaging suppliers for lower-carbon materials or logistics.

These actions can be tracked through energy management systems or even simple spreadsheets.

See how SMEs collect and manage climate data →

Step 5: Monitor and Report Progress

CSRD and VSME encourage annual reporting of target progress. Track year-on-year changes in emissions and share updates in your sustainability report, even if targets haven’t been fully met yet. Transparency is valued more than perfection.

If you use SBTi validation, you’ll need to reconfirm progress every 5 years, ensuring targets remain aligned with current science.

Step 6: Extend to Value Chain (Scope 3)

Once comfortable with your own operations, start mapping key upstream and downstream emissions — known as Scope 3. These often represent the majority of an SME’s footprint and are essential for supply chain transparency.

Learn how to map your value chain and Scope 3 impacts →

Practical Example

A small food manufacturer with 60 employees measures its 2023 baseline:

• Scope 1: 120 tonnes CO₂e (gas heating, vehicles)
• Scope 2: 80 tonnes CO₂e (electricity)

The company commits to reduce combined Scope 1 and 2 emissions by 50% by 2030, by:

• Installing solar panels,
• Replacing delivery vans with EVs, and
• Switching to renewable energy contracts.

It records this in its sustainability report and submits a free SBTi SME commitment — fulfilling both CSRD climate target requirements and customer expectations.

Frequently Asked Questions

Do I need SBTi validation for CSRD compliance?

No. CSRD requires disclosure of targets and progress, not external validation. However, SBTi provides credibility and helps align with market best practices.

Learn about CSRD climate reporting basics →

How can small businesses afford to measure emissions?

Start with energy and fuel data you already have — from invoices or meters. Free online tools can calculate emissions quickly. Over time, you can refine accuracy as your data improves.

What if I don’t meet my target on time?

Be transparent about challenges and corrective actions. CSRD values honesty and continuous improvement — missed targets don’t mean non-compliance, as long as progress is tracked and explained.

See how SMEs update their CSRD reports annually →

Can I include supplier or logistics emissions later?

Yes, once your direct emissions tracking is stable. Expanding to Scope 3 is encouraged but not mandatory for SMEs in early years. Start small and build progressively.

Explore simple methods for Scope 3 tracking →

Key Terms

• Science-Based Targets (SBTs): Emission reduction goals consistent with limiting global warming to 1.5°C.
• SBTi: Science Based Targets initiative providing SME pathways.
• GHG Emissions: Greenhouse gases such as CO₂, CH₄, and N₂O.
• Scope 1, 2, 3: Categories of emissions (direct, purchased energy, and value chain).
• VSME Standard: Simplified sustainability framework for SMEs under CSRD.
• Net-Zero: Balancing remaining emissions with removal or offset measures.

Conclusion

Setting science-based targets is one of the most effective ways for SMEs to demonstrate climate leadership and CSRD alignment. You don’t need a consultant or expensive software — just a structured approach, basic data, and a commitment to continuous improvement.

By measuring, targeting, and reporting transparently, your SME can reduce costs, attract clients, and contribute meaningfully to Europe’s net-zero transition — proving that sustainability and profitability go hand in hand.