How to Set an SBTi Baseline (2025 Guide): Scope 1 to 3, data sources, and recalculation rules

---## TL;DRYour SBTi baseline is the reference inventory you'll use to calculate reductions over time. Pick a representative year, define clear boundaries (Scopes 1 to 3), document methods and assumptions, and adopt a recalculation policy for structural changes. Build quick coverage first, then improve accuracy over time.---## 1) What exactly is an SBTi baseline?Your baseline (often "base year inventory") is the emissions snapshot you'll use to calculate reductions over time. It should be:- Complete: Includes Scopes 1, 2 (both market and location based), and all relevant Scope 3 categories.- Consistent: Methods, factors, boundaries, and assumptions are defined and repeatable.- Reproducible: Documented so a teammate or an auditor can recreate it.---## 2) Choose a representative baseline yearAim for data-rich and business-representative:- Data availability & quality: Activity data for energy, refrigerants, logistics, business travel, and purchased goods & services.- Business normality: Avoid anomalous years (e.g., unusual shutdowns or spikes).- Structural changes: Consider acquisitions and divestitures and whether a recalculation may be required later.- Comparability: Align with public disclosures where possible._Tip:_ If your best year lacks data in one area, document a proxy with a plan to replace it in the next cycle.---## 3) Define organizational and operational boundariesBe explicit and write it down.- Organizational boundary: Equity share vs. control; which entities, JVs, and regions are in scope.- Scope 1: Stationary/mobile combustion, process emissions, fugitive gases (e.g., HFCs).- Scope 2: Report both market based and location based electricity/steam/heat.- Scope 3: Map relevance and materiality across categories (e.g., Cat. 1 Purchased Goods & Services, Cat. 4 Upstream Transport, Cat. 6 Business Travel, Cat. 11 Use of Sold Products). Prioritize material categories first, but plan to reach comprehensive coverage.---## 4) Gather data sources and select emission factorsScopes 1 to 2 activity data: Fuel volumes, kWh by site/tariff, refrigerant top ups, vehicle data (miles and km, fuel type).Scope 3 approaches:- Spend based (fast coverage): Map GL and AP data to categories and apply sector-average factors.- Activity based (higher accuracy): Shipment weights and ton km, waste tonnage, product BOMs, supplier energy use.- Supplier specific (highest relevance): Primary supplier data, program results (e.g., recycled content, energy switching).Factor management: Use reputable factor libraries; version lock the set used for the baseline; retain source and year; avoid mixing incompatible geographies or vintages without documentation.---## 5) Make and document methodology choicesDraft a short methods memo that covers:- Electricity: Market- vs. location based methods; treatment of certificates and PPAs.- Refrigerants: Leak-rate assumptions and data sources.- Travel & commuting: Class-of-travel splits, WFH assumptions, survey methods.- Purchased goods & services: When spend-, activity-, and supplier specific methods apply and how you prevent double counting.- Data gaps & proxies: What you estimated, why it's reasonable, and how you'll improve it.---## 6) Create a robust recalculation policyDefine when you'll adjust the baseline:- Structural changes: Significant M and A, outsourcing and insourcing.- Methodology/factor updates: Changes that materially shift base year totals.- Material data corrections: Fixes to errors discovered post hoc.- Boundary changes: New facilities or regions under control.Set a governance cadence (e.g., annual review or after major transactions). Document the trigger, decision, and any recalculated values with rationale.---## 7) QA, governance, and audit readinessBefore you lock the baseline:- Completeness checks: Confirm relevant Scope 3 categories; scan for double counting.- Reasonableness checks: Compare intensity metrics (tCO₂e/revenue, per unit, per FTE) to peers and prior years.- Version control: Freeze factor versions; record transformations from source systems.- Sign-off: Secure cross functional approval (finance, sustainability, operations).---## 8) Common pitfalls (and quick fixes)- Only Scope 1 to 2, weak Scope 3: Use spend based for rapid map coverage, then upgrade material categories.- Single-method rigidity: Mixing methods is fine if you track where each applies.- No recalculation policy: Write and ratify it now to avoid disputes later.- Ambiguous Scope 2 reporting: Always present both market and location based results with clear certificate treatment.- Untraceable vendor estimates: Tie supplier numbers to auditable initiatives and evidence.---## 9) Baseline policy template### 9.1 Policy statement boilerplate> Purpose>> Establish the base year GHG inventory used to measure performance against our science-based targets, ensuring completeness, consistency, reproducibility, and auditability.>> Scope>> This policy covers organizational and operational boundaries, data sources, calculation methods, emission factors, QA, governance, and baseline recalculation triggers.>> Effective date>> [YYYY-MM-DD]>> Owner(s)>> Sustainability Lead (Policy owner); Finance (Data owner); IT/Data (System owner).---### 9.2 Organizational boundary register (copy-paste table)| Entity / legal unit | Boundary approach (Equity/Control) | Consolidation (Y/N) | Included in baseline? | Start date | Notes || ----------------------- | -------------------------------------- | ----------------------- | ------------------------- | -------------- | ----------------------------------------------------------- || [Entity A] | [Equity/Operational] | [Y/N] | [Y/N] | [YYYY-MM-DD] | [JV? minority?] || [Entity B] | | | | | || Rationale | colspan | colspan | colspan | colspan | Summarize why inclusions/exclusions align with GHG Protocol |---### 9.3 Operational boundary register (Scopes 1 to 3)| Scope | Source / category | Included? | Method (Activity/Spend/Supplier specific) | Primary data source(s) | Factor source & vintage | Notes || --------- | ------------------------------------------ | ------------- | --------------------------------------------- | -------------------------- | --------------------------- | -------------------------- || Scope 1 | Stationary combustion | | | | | || | Mobile combustion | | | | | || | Process emissions | | | | | || | Fugitive (refrigerants) | | | | | || Scope 2 | Purchased electricity (location based) | | | | | || | Purchased electricity (market based) | | | | | Certificates/PPAs handling || Scope 3 | Cat. 1 Purchased goods & services | | | | | || | Cat. 2 CapEx | | | | | || | Cat. 3 Fuel & energy-related | | | | | || | Cat. 4 Upstream transport & distribution | | | | | || | Cat. 5 Waste | | | | | || | Cat. 6 Business travel | | | | | Class splits || | Cat. 7 Employee commuting/WFH | | | | | Survey method || | Cat. 8 Upstream leased assets | | | | | || | Cat. 9 Downstream transport & distribution | | | | | || | Cat.10 Processing of sold products | | | | | || | Cat.11 Use of sold products | | | | | Lifetime, duty cycles || | Cat.12 End-of-life treatment | | | | | || | Cat.13 Downstream leased assets | | | | | || | Cat.14 Franchises | | | | | || | Cat.15 Investments | | | | | Financed emissions method |---### 9.4 Baseline year selection file (quick scoring matrix)| Candidate year | Business representativeness (1 to 5) | Data completeness (1 to 5) | Data quality (1 to 5) | Structural anomalies (negative 2 to 0) | Public comparability (1 to 3) | Total || ------------------------ | ---------------------------------------- | ------------------------------ | ------------------------- | ------------------------------------------ | --------------------------------- | -------------------------------------------------------------- || 20XX | | | | | | || 20XY | | | | | | || Decision & rationale | colspan | colspan | colspan | colspan | colspan | Explain the winning year and any compensating controls/proxies |---### 9.5 Data inventory & quality checklist| Data domain | Source system(s) | Owner | Coverage % | *Method (A/S/SS\) | Quality (1 to 5) | Known gaps | Fix plan & ETA || -------------------------- | --------------------- | --------- | -------------- | --------------------- | -------------------- | ----------------------- | ------------------ || Energy (kWh per site) | [Utility portal, EMS] | [Name] | | A | | | || Fuels (L/therms) | [ERP, fleet] | | | A | | | || Refrigerants | [FM logs] | | | A | | | || Business travel | [TPM] | | | A | | Missing rail legs | || Purchased goods & services | [ERP/AP] | | | S/SS | | Supplier splits unknown | || Logistics (ton km) | [3PL] | | | A/SS | | | || Waste | [FM/vendor] | | | A | | | || Use of sold products | [Eng/Product] | | | A/SS | | Duty cycle uncertain | |- A = Activity based, S = Spend based, SS = Supplier specific---### 9.6 Methods & factors register (version locked)| Category / source | Method | Factor library | Factor code / name | Geography | Vintage (year) | Emission unit | Notes || --------------------- | ---------- | ------------------ | ---------------------------- | ---------------- | ------------------ | ----------------- | ---------------------- || Electricity (LB) | Activity | [Library vX.Y] | [Grid mix code] | [Country/Region] | 20XX | kgCO₂e/kWh | || Electricity (MB) | Activity | [Market vX.Y] | [Residual mix / supplier EF] | | 20XX | kgCO₂e/kWh | Certificates scope || Cat.1 PG&S (fallback) | Spend | [IO table vX.Y] | [Sector code] | | 20XX | kgCO₂e/$ | Currency deflator used || Logistics | Activity | [LCA vX.Y] | [Mode x distance] | | 20XX | kgCO₂e/ton km | || Supplier specific | SS | [Supplier doc] | [ID] | [Plant] | 20XX | kgCO₂e/unit | Verification status |---### 9.7 "Methods & Assumptions" memo skeleton**1. Organizational boundary : approach, included entities, changes vs. prior year2. Operational boundary : Scopes 1 to 3 inclusions and exclusions3. Calculation methods : by category (A/S/SS), rationale, double-count controls4. Electricity methods : LB/MB, certificates and PPAs treatment5. Emission factors : libraries, vintages, geographies, version lock6. Data gaps & proxies : what, why reasonable, replacement plan7. QA & reasonableness : outlier rules, intensity comparisons, peer benchmarks8. Recalculation policy : triggers, thresholds, governance---### 9.8 Recalculation policy (triggers, thresholds, decision tree)Triggers (any may apply):1. Structural change (M and A, outsourcing and insourcing)2. Method/factor change that would materially shift base year totals3. Material data correction4. Boundary change (new facility under control)Materiality thresholds (set both):- Relative: ≥ 5 to 10% change to base year total emissions (pick one band and fix it in policy)- Absolute: ≥ [X,000] tCO₂e change to base year totalDecision tree (text form):- Did a trigger occur? → No: No action. Yes →- Estimate impact on base year total → - If ≥ threshold → Recalculate baseline (document, update targets if required) - If < threshold → Document as non-material change, no recalculation.Baseline change log (copy-paste table)| Date | Trigger | Estimated impact (% / tCO₂e) | Decision | Approvers | Notes / links || -------- | ----------- | -------------------------------- | ---------------- | ------------- | ----------------- || | | | Recalculate / No | [Names] | |---### 9.9 QA rules (ready to implement)- Completeness: All relevant Scope 3 categories decisioned (Included/Not relevant) with rationale.- Double-count checks: - Cat.3 vs Scope 1/2 fuel/electricity overlap - Cat.4/9 vs internal logistics - Cat.1 vs CapEx (Cat.2) classification- Outlier detection: Any site/category ± >30% YoY without documented driver.- Factor sanity: No mixed vintages for the same category without rationale; geography alignment checked.- Intensity reasonableness: tCO₂e per revenue/unit/FTE compared to prior year and peer range.- Version control: Factor set and methods memo have explicit version IDs.---### 9.10 Governance & RACI| Activity | Sustain. | Finance | Ops | Procurement | Legal | IT/Data | Exec || ------------------------- | ------------ | ----------- | ------- | --------------- | --------- | ----------- | -------- || Set baseline policy | R | A | C | C | C | C | I || Data sourcing | C | A | R | R | | R | I || Factor library/versioning | R | C | | | | A | I || QA & sign-off | A | R | C | C | | C | I || Recalculation decision | A | R | C | C | C | C | I || SBTi submission | A | R | | | | | I |(A = Accountable, R = Responsible, C = Consulted, I = Informed)---### 9.11 Intensity & benchmarking worksheet| Metric | Definition | Baseline value | Peer range (min to max) | Source | Notes || --------------- | --------------------- | ------------------ | --------------------------- | ---------- | --------- || tCO₂e / revenue | Total Scope 1+2+3 / $ | | | | || tCO₂e / unit | Total / product unit | | | | || tCO₂e / FTE | Total / employee | | | | |---### 9.12 Working papers index (kept inside your doc)| Ref ID | File / sheet name | Owner | Status | Link (internal) | Notes || ---------- | --------------------- | --------- | ---------- | ------------------- | --------- || WP-01 | Utility data by site | [Name] | Final | [URL] | || WP-02 | AP spend map to Cat.1 | | Draft | | || WP-03 | Factor pack vX.Y | | Final | | || WP-04 | Methods & Assumptions | | Final | | |---### 9.13 Scope 3 relevance screening matrix (quick start)| Category | Typical data | Relevance signals | Decision (Y/N) | Notes || --------------------------- | ---------------------- | -------------------------------- | ------------------ | --------- || Cat.1 PG&S | AP/GL, supplier splits | High spend on materials/services | | || Cat.3 Fuel & energy-related | Energy bills | Energy-intensive ops | | || Cat.4 Upstream transport | 3PL ton km | Global supply chain | | || Cat.6 Business travel | TMC export | High sales/consulting travel | | || Cat.7 Commuting/WFH | HR/surveys | Office-based workforce | | || Cat.11 Use of sold products | Product duty cycles | Energy-using products | | || Cat.12 End-of-life | Product materials | Short life / high volume | | |---### Optional appendix: example policy paragraph (ready to paste)> We report Scope 2 using both location based and market based methods. Market-based results include supplier specific emission factors and the use of energy attribute certificates (EACs) in accordance with quality criteria. Recalculation of our 20XX baseline is triggered if any single change would alter base year emissions by ≥7% or ≥15,000 tCO₂e (whichever is smaller). All changes, material or not, are recorded in the Baseline Change Log with approver sign-off.---## How DitchCarbon helps- Fast coverage → precision: Map AP/GL to Scope 3 for immediate coverage, then upgrade hot-spots to activity and supplier specific data.- Version-locked factor packs: Region-aware libraries with provenance and vintages for clean audit trails.- Governance in-line: Built-in QA rules, change logs, and side-by-side recalculation comparisons against your materiality thresholds.- SBTi-ready outputs: One-click exports of the Methods & Assumptions memo, factor register, and boundary statements aligned to reviewer expectations.