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

TL;DR

Your 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 Year

Aim for data-rich and business-representative:

• Data availability & quality: Activity data (primary 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 Organisational and Operational Boundaries

Be explicit and write it down.

• Organisational 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). Prioritise material categories first, but plan to reach comprehensive coverage.

4) Gather Data Sources and Select Emission Factors

Scopes 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, programme 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 Choices

Draft 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 Policy

Define when you'll adjust the baseline:

• Structural changes: Significant M&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 Readiness

Before 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

PurposeEstablish the base year GHG inventory used to measure performance against our science-based targets, ensuring completeness, consistency, reproducibility, and auditability.

ScopeThis policy covers organisational 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 Organisational boundary register (copy-paste table)

9.3 Operational boundary register (Scopes 1 to 3)