Net-Zero

Foundations for net-zero target-setting in the corporate sector

We’ve launched a process to develop the first science-based global standard for corporate net-zero targets, to ensure that companies’ net-zero targets translate into action that is consistent with achieving a net-zero world by no later than 2050.

Our new paper lays out the conceptual foundations for credible, science-based net-zero targets for the corporate sector:

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Net zero: a North Star for climate action

According to the latest report by the Intergovernmental Panel on Climate Change (IPCC), to limit global warming to 1.5°C above pre-industrial levels and avoid the most catastrophic impacts of climate change, the world must halve CO2 emissions by around 2030 and reach net-zero CO2 emissions by mid-century.

Recognizing the importance of keeping global warming to 1.5°C, companies are increasingly adopting net-zero climate targets. Between July 2019 and June 2020, over 230 companies committed to reach net-zero emissions as part of the Business Ambition for 1.5°C campaign, an urgent call-to-action for companies to set emissions reduction targets in line with a 1.5°C future. The campaign is led by the SBTi and backed by a global coalition of UN leaders, business organizations and NGOs.

Science-based net-zero targets for companies

At the global level, the IPCC provides a clear definition of net zero: Net-zero emissions are reached when anthropogenic (i.e., human-caused) emissions of greenhouse gases to the atmosphere are balanced by anthropogenic removals over a specified period.

Within the corporate context, however, the definition is not so clear, leading to significant confusion and inconsistent claims. Without a common science-based definition of what constitutes a “net-zero” target, companies and their stakeholders can’t be sure that their long-term climate targets are credible or ambitious enough.

In 2019, the SBTi initiated an inclusive, stakeholder-informed process to develop a framework to enable companies to set robust and credible net-zero targets in line with a 1.5°C future. The framework will include net-zero target validation criteria, allowing companies to have their net-zero targets validated by the SBTi, as well as user friendly guidance for setting net-zero targets.

Timeline

The SBTi began consultations with companies and relevant stakeholders in September 2019. Our aims were to develop a set of guiding principles to ensure that corporate net-zero targets are consistent with the transformation required for a net-zero economy and propose a working definition of a corporate net-zero target.

Following on from the publication of the ‘Foundations for net-zero target setting in the corporate sector’ paper in September 2020, the SBTi is in the process of developing detailed criteria and guidance. A public consultation on the criteria was open for comments for two months and closed on 12th of March 2021. Over 80 companies road tested the Net-Zero target validation criteria, tool, and guidance from 15 July to 31 August 2021. A Pre-Launch Public Consultation will take place from 20 September to 6 October 2021. A final net-zero framework, including target-setting guidance and target validation criteria, is planned to be launched for Thursday, 28 October 2021.