The SBTi Net-Zero Standard: A beacon of light
28th Oct 2021
Today, we are unveiling the world’s first science-based standard for setting corporate net-zero targets - the SBTi Net-Zero Standard. As the first-ever, science-based validation of companies’ net-zero targets, this is a momentous leap towards halting global temperature rise to 1.5°C.
We are also announcing the pioneering companies leading the way with the first validated SBTi net-zero targets. The seven businesses - spanning different countries and sectors - are: AstraZeneca (UK), CVS Health (US), Dentsu International (UK), Holcim (Switzerland), JLL (US), Ørsted (Denmark) and Wipro (India).
Until now, companies have had no way of knowing if their net-zero decarbonization targets align with science. The launch of the SBTi Net-Zero Standard is a beacon of light - providing a trusted guide for companies to reach net-zero.
The Net-Zero Standard was developed in consultation with an independent Expert Advisory Group made up of experts from academia, civil society, science and business. It was then road tested by 84 companies in July and August 2021. The SBTi will continue its work on Net-Zero into 2022, specifically looking at best practice in beyond value chain mitigation and how to further support companies in reducing scope 3 emissions.
No time to lose
The latest IPCC report, released in August 2021, was a final call to keep 1.5°C alive and prevent further devastating impacts from climate breakdown, which have already become more apparent. Wildfires, drought, heavy rainfall and floods are becoming more frequent, affecting countless lives each year and costing $383 million per day globally. This is only set to worsen if we do not take action now.
Ahead of COP26 next week - the milestone climate conference - many of the world’s biggest governmental, corporate, scientific and environmental leaders are repeatedly telling us that this is the decisive decade. Every country and company must rapidly accelerate climate ambition and action now. It’s clear that we have to bend the curve of emissions, or risk locking in catastrophic changes to our climate.
Within the last couple of years, the concept of net-zero has become the north star of climate action. 80% of the global economy representing 78% of emissions is pledged to net-zero. But without standardization, it has steadily become clear that not all net-zero pledges are created equal. Lack of a common definition of net-zero and uncertainty on how to get there has led to confusion and inconsistency, as well as accusations of greenwashing.
The Net-Zero Standard provides a blueprint of what is needed for corporate net-zero targets to keep warming below 1.5°C which we know is crucial.
What does good corporate net-zero look like?
Companies that adopt the Net-Zero Standard will set both near- and long-term science-based targets. Near-term science-based targets outline what the company will do now and over the next 5-10 years to reduce their emissions to align with 1.5℃ scenarios. Long-term targets are the amount of carbon reductions needed for companies to reach net-zero before 2050. Most are expected to make reductions of at least 90%.
Companies must then use carbon removals to neutralize any emissions that remain, but this is expected to be no more than 5-10% of total emissions.
At the heart of the SBTi Standard is the “mitigation hierarchy”. This means companies should commit to reducing value chain emissions and implement strategies to achieve these targets as a first order priority, ahead of actions or investments to mitigate emissions outside their value chains. Investing outside of the value chain is in addition to, and not instead of, emissions reductions.
Net-Zero Standard: A beacon of light
The release of the Net-Zero Standard is a positive step forward, and an urgent call to action. We are making progress, but there is still a challenging journey ahead with much to be done. Despite great progress, we cannot afford to lose sight of the further crucial action needed to protect our future on this planet.
There can be no shortcuts on the road to net-zero. Rapid decarbonization is our only way forward - and the Net-Zero Standard is lighting the way.
More than 600 companies have already made a commitment to reach science-based net-zero no later than 2050, through the SBTi’s Business Ambition for 1.5°C campaign. We are calling on companies across all geographies and sectors to commit to science-based net-zero by returning the signed commitment letter to [email protected].
To reserve a spot on the waitlist for Net-Zero Target validation, companies should use the Net-Zero Target Validation booking system.