Our thinking

Oil companies part ways with SBTi

25 July, 2025

This week, several oil majors walked away from efforts to define what net zero means for the oil sector. Shell, Aker BP, and other energy groups have quit the expert advisory group of the Science-Based Targets initiative (SBTi), stepping away from what has been a multi-year process to define a net zero standard for the oil and gas sector.  

The companies were quick to say that the withdrawal isn’t about abandoning climate goals, but that they felt that the draft SBTi standards – which would require target setters to stop developing new oil and gasfields – did not reflect industry realities.  

It’s not surprising to see oil and gas companies moving away from the SBTi, but it is noteworthy that they are not the only ones doing so. In 2024 over 200 companies failed to meet their commitments to set validated targets. The recurring reason for doing so was the challenges of achieving targets – reflecting the fact that the easy wins of early climate action are now giving way to the harder work of real emissions reduction. 

This has sparked debate. Critics argue SBTi has become too rigid. Supporters counter that climate targets should be tough – because climate change doesn’t care about feasibility studies. The truth likely lies in between. 

There’s still a vital role for a science-based, credible framework that challenges companies while allowing for nuance. Encouragingly, SBTi’s newly released net zero standard for financial institutions shows it’s possible to strike the balance of tough but tailored. (Incidentally, 28 financial institutions were involved in the development and testing of the new standard.)  

Unfortunately, it’s hard to see an effective standard being achieved for oil and gas. SBTi has now paused the standard development process, officially due to capacity constraints, though the loss of key players likely played a role. With the standard on hold and industry stepping back, one of the most carbon-intensive sectors now risks being left without a clear, trusted path to net zero. 

By Louise Podmore