Transition Finance Data: Insights from the Science Based Targets initiative

In July, the Luxembourg Stock Exchange (LuxSE) announced the launch of a brand-new initiative which aims to support issuers in their transition journey and provide transparency to investors. The Transition Finance Gateway shines the spotlight on the exchange’s some 500+ non-financial corporate debt issuers across both conventional and sustainable bonds.

To mark the launch of our innovative Transition Finance Gateway, we sat down the Science Based Targets initiative (SBTi) - one of the four data providers helping to power the Gateway with market-renowned climate transition data.

Could you please tell us a little about the history of SBTi and its creation?

The Science Based Targets initiative (SBTi) is a corporate climate action organisation that enables companies and financial institutions worldwide to play their part in combating the climate crisis. We develop standards, tools and guidance which allow companies to set greenhouse gas (GHG) emissions reductions targets in line with what is needed to keep global heating below catastrophic levels and reach net-zero by 2050 at latest.

The SBTi started life as an initiative operated by CDP, the United Nations Global Compact, World Resources Institute (WRI), and the World Wide Fund for Nature (WWF), and one of the We Mean Business Coalition commitments. Our goal was to get 100 companies to commit to set GHG emissions reductions targets in line with what science deemed necessary to avoid the worst impacts of climate change.

Since then, the huge demand from companies and financial institutions worldwide for credible, science-based targets means that the initiative has grown beyond expectations. In 2023, the SBTi became an independent organisation, and was subsequently recognised as a charity by the Charity Commission for England and Wales. By 2024, the SBTi had separated out its independent target services arm – SBTi Services – designed to drive efficiencies, scale and excellence in operations.

The SBTi continues to expand its reach. In addition to its flagship Corporate Net-Zero Standard, the SBTi has also created 11 sector-specific pathways to guide decarbonisation by some of the highest-emitting industries. By the beginning of 2025, over 7,000 companies and financial institutions worldwide had set science-based targets, with an additional 3,000 having committed to do so.

What transition data does the SBTi provide?

The SBTi holds data on companies’ science-based targets and commitments to set them, including details on which sector they operate in, their geographic location, and the date of the commitment or target. The SBTi also captures a qualitative description of the target itself, providing essential context around the ambition and scope of each target.

Why is this data so important?

Capturing data on companies’ targets and commitments is essential for promoting transparency, accountability, and informed decision-making across the climate ecosystem. It enables companies, policymakers, researchers, and civil society to better understand corporate climate ambition and track progress—ultimately supporting more effective and credible climate action.

How can investors use this data to finance the transition towards net-zero by 2050?

Access to climate target data enables investors assess which companies are best positioned for the low-carbon transition and manage climate-related risks across their portfolios. It supports more informed investment decisions by highlighting companies with credible, science-based targets, and facilitates more effective engagement to drive meaningful corporate action.

Ultimately, this helps investors safeguard long-term returns while identifying opportunities for sustainable growth in a net-zero economy.

How can issuers use this data to transition towards net-zero by 2050?

Setting and publishing credible climate targets builds confidence among investors and lenders, and helps companies compare themselves to peers to guide internal strategy. It can improve visibility in sustainability rankings and attract interest from investors. Publicly committing to climate action also shows responsibility and strengthens relationships with customers, employees, and partners.

How do you see the financing of the transition developing in the future?

The finance sector is key to unlocking the system-wide change needed to reach a net-zero global economy. As the effects of global heating become more extreme, financial institutions can reduce the climate-related risks associated with their portfolios by setting targets to reduce the emissions associated with their financial activities.

In doing so, financial institutions can reallocate their capital and finance, contributing to the global transformation to a net-zero economy significantly by incentivising companies to take meaningful action.

If you could put forward one call to action to issuers that have yet to start their transition journey, what would it?

If you don’t have a target, set one. If you do, stay the course. The climate crisis is already reshaping markets. Businesses that move now will be more resilient, more competitive, and better positioned to lead.

Action builds credibility—inaction carries risk.