Norges Bank Investment Management (NBIM), responsible for the investments of Norway’s Government Pension Fund Global (GPFG), has urged the Science Based Targets initiative (SBTi) to “balance scientific rigour with practical implementation”, in response to a consultation.

NBIM chief governance and compliance officer, Carine Smith Ihenacho, and NBIM head of environmental team, active ownership, Eivind Fliflet, responding on behalf of NBIM, said the consultation “presents a timely opportunity to evaluate the current approach”.

In setting out NBIM's interest in SBTi, Smith Ihenacho and Fliflet noted that, as a long-term financial investor, NBIM expects companies in its portfolio to commit to net zero by 2050 or sooner and align their activities with the goals of the Paris Agreement.

“We also expect them to set science-based interim emission reduction targets. We value SBTi’s role in providing a credible framework for assessing corporate climate ambition and have for many years encouraged companies to submit their targets for validation by SBTi,” they said.

However, they said that through company dialogues, NBIM has observed “growing challenges” with implementing and verifying science-based targets.

“While scientific integrity remains essential, the effectiveness of SBTi's standards ultimately depends on their widespread adoption. Standards that are perceived as overly complex or difficult to implement may, over time, limit participation to a small subset of companies, rather than driving the broader market transformation necessary to achieve global climate goals,” they wrote.

NBIM has, therefore, made several recommendations for a revised SBTi and highlighted concerns with current plans. In particular, it said it was concerned that SBTi is expanding its scope beyond verifying targets.

The draft standard includes elements such as requirements for transition plans, public commitment mandates, fossil fuel policies and supplier engagement. SBTi is also moving towards an enforcement role with a suggested validation model that requires regular progress assessment against fixed five-year cycles, with consequences for underperformance.

NBIM believes that some of these elements could “introduce complexity and will be difficult for many companies to implement”. Smith Ihenacho and Fliflet urged SBTi to “ensure widespread adoption and excellence in its core function of target verification before expanding its scope”.

They also said SBTi should take a “more considered approach to what role it seeks to play in assessing and following up corporate actions on climate change, versus that of other stakeholders”.

For instance, NBIM suggested that auditors, investors, regulators, and civil society may be better suited to assess performance and hold companies accountable to the targets they set.

In addition, NBIM believes that the requirement for alignment with 1.5°C pathways may create barriers to adoption for many companies and aligning with the Paris Agreement is a more flexible approach.

“We recognise that every additional fraction of a degree of warming may have severe consequences, but ultimately believe that unrealistic ambitions foster less action, not more. We therefore encourage SBTi to consider a more flexible approach that recognises different levels of ambition,” Smith Ihenacho and Fliflet wrote.

SBTi was also advised to simplify its core document, as the draft consultation contains “prescriptive and detailed requirements” across more than 100 pages, which NBIM believes creates a “significant barrier for adoption”.

Furthermore, Smith Ihenacho and Fliflet said the current SBTi framework has seen limited adoption in some critical sectors where methodologies are still under development. NBIM has also heard that companies in other sectors are moving away from SBTi verification, citing complexity and feasibility concerns.

“As these sectoral approaches continue to be developed, they should be grounded in the experiences companies have made through multiple strategy cycles and capital allocation decisions based on available technology, regulatory developments, and market conditions,” Smith Ihenacho and Fliflet said.

On the issue of balancing scientific rigour with practical implementation, NBIM believes the ultimate measure of success is driving widespread, meaningful action across high-emission sectors, not technical perfectionism.

“Success should be measured by the volume of global emissions covered by verified targets, rather than just the number of companies participating. If the standard remains overly complex and unrealistic, companies will inevitably seek alternative frameworks or abandon formal verification,” Smith Ihenacho and Fliflet concluded.

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