Corporate Net-Zero Standard Version 2.0 Public Consultation
Explore the initial draft of the Corporate Net-Zero Standard Version 2.0 with our digital consultation guide.
Explore the draft standard
- 01 Getting started
- 02 Take part in the public consultation
- 03 Key features at a glance
- 04 Draft Standard Chapter 1: Corporate Net-Zero Commitment
- 05 Draft Standard Chapter 2: Determining Performance in the Target Base Year
- 06 Draft Standard Chapter 3: Target-Setting
- 07 Draft Standard Chapter 4: Addressing the Impact of Ongoing Emissions
- 08 Draft Standard Chapter 5: Assessing and Communicating Progress
- 09 Draft Standard Chapter 6: SBTI Claims
- 10 Project documentation
- 11 Frequently asked questions
Draft Standard Chapter 4: Addressing the Impact of Ongoing Emissions
Background and key concepts
Target setting, as detailed in Chapter 3, is central to the SBTi’s work. Science-based target setting incentivizes companies to undertake transformative actions to decarbonize operations and value chains, preventing the release of future GHG emissions. At the same time, the SBTi acknowledges the urgency of addressing emissions released into the atmosphere today and the critical role that companies can play in mobilizing finance for mitigation activities beyond their value chain.
During the transition to net-zero, companies continue to release emissions while they work to implement their science-based targets. These are referred to as ‘ongoing emissions’. They are different from residual emissions, which remain at the net-zero target year after all possible abatement measures have been implemented.
Since these ongoing emissions are a primary driver of negative climate impact, it is crucial for companies’ credibility to take responsibility for them. This chapter aims to recognize companies that mitigate the impact of ongoing emissions as they progress toward near- and long-term decarbonization.
While the current version of the standard (Version 1.2) recommends companies to go above and beyond their science-based targets through beyond value chain mitigation (BVCM), this draft standard aims to provide a stronger incentive by recognizing companies that not only set science-based targets to reduce emissions within their operations and value chain but take responsibility for addressing the impact of emissions released into the atmosphere as they undergo their net-zero transformation.
The SBTi is proposing to recognize companies that mitigate the impact of ongoing emissions while undertaking science-based decarbonization as an optional leadership practice, rather than a mandatory requirement. Through this approach, the SBTi aims to remain inclusive for companies with varying resources, while offering recognition for those who can and want to go above and beyond to demonstrate enhanced climate leadership, further strengthening their credibility in the process.
The scope of emissions for which companies seeking recognition shall take responsibility and the eligible mitigation actions are proposed in this chapter, but will be further explored and refined. Through the consultation process, the SBTi aims to identify the most effective mechanisms to shape and recognize this leadership practice.
Distinguishing ongoing emissions from residual emissions
It is important to differentiate between ongoing emissions and residual emissions at net-zero; they represent distinct stages in a company’s decarbonization journey and require different approaches for mitigation.
Ongoing emissions are the GHG emissions that companies continue to release into the atmosphere as they implement the necessary transformations to achieve net-zero emissions. The SBTi aims to incentivize companies to take responsibility for the impact of ongoing emissions by providing optional recognition for these actions.
Residual emissions are GHG emissions that remain at the net-zero target year after a company has implemented all possible abatement measures across its operations and value chain, and has achieved a level of performance consistent with net-zero aligned pathways.
Interoperability and recognition of other frameworks
There is a broad ecosystem of actors contributing to corporate climate action. The SBTi will explore opportunities to recognize other programs and frameworks that provide assurance that companies are taking responsibility for ongoing emissions in line with the criteria outlined in this standard.
Draft criteria and recommendations
Beyond value chain mitigation
Previous versions of this standard recommended that companies take responsibility for their ongoing emissions by mitigating emissions beyond their value chain. However, these efforts were not formally recognized.
In this standard, optional recognition of companies that mitigate the impact of ongoing emissions and related reporting requirements are proposed. This change aims to provide a stronger incentive for companies to take responsibility for ongoing emissions, recognizing the urgent need to accelerate climate action and scale up corporate climate finance.