The Corporate Net-Zero Standard
The SBTi’s Corporate Net-Zero Standard provides the guidance and tools companies need to set science-based net-zero targets.
"The Net-Zero Standard gives companies a clear blueprint on how to bring their net-zero plans in line with the science, which is non-negotiable in this decisive decade for climate action. Because we are running out of time." Johan Rockström Director of the Potsdam Institute for Climate Impact Research (PIK) and Professor in Earth System Science at the University of Potsdam
The SBTi’s Corporate Net-Zero Standard is the world’s only framework for corporate net-zero target setting in line with climate science. It includes the guidance, criteria, and recommendations companies need to set science-based net-zero targets consistent with limiting global temperature rise to 1.5°C.
Key components of the Corporate Net-Zero Standard
- Prioritize rapid, deep emission reductions by setting near-term targets: Rapid, deep cuts to direct and indirect value-chain emissions are the most effective, scientifically-sound way of limiting global temperature rise to 1.5°C. Halving emissions by 2030 must be the overarching priority for companies.
- Set long-term targets: The Net-Zero Standard also requires companies to set long-term science-based targets to cut all possible emissions before 2050. Most companies must reduce emissions by more than 90%.
- Neutralize residual emissions: After a company has achieved its long-term target and cut emissions by >90%, it must use permanent carbon removal and storage to counterbalance the final <10% of residual emissions that cannot be eliminated. A company is only considered to have reached net-zero when it has achieved its long-term science-based target and neutralized any residual emissions.
- Climate finance beyond the value chain: The SBTi wants to incentivize and catalyze as much climate finance as possible from the private sector. There is an urgent need to scale up near-term climate finance to achieve net-zero before 2050. Companies should follow the mitigation hierarchy, and make these investments in addition to deep emissions cuts, not instead of them.
Emma Watson, the SBTi's Head of Standards, explains the key features of the Net-Zero Standard.
Key strengths of the Corporate Net-Zero Standard
- Completeness: The target covers all material sources of emissions across company value chains.
- Early Action: The near-term target delivers immediate action in line with climate science.
- Ambition: The target leads to mitigation consistent with limiting warming to 1.5°C in line with robust climate scenarios.
- Timeframe: Companies must commit to reaching net-zero by 2050 at the latest
- Accountability: The target will be subject to a robust and independent accountability framework.
Why set a science-based net-zero target?
The Corporate Net-Zero Standard provides a common, robust, science-based understanding of net-zero. It gives business leaders clarity and confidence that their near- and long-term decarbonization plans are aligned with climate science.
Net-zero pledges now cover 92% of GDP and 88% of emissions worldwide. Despite this, the definition of net-zero and the path to get there has been interpreted in different and inconsistent ways.
Without a common definition, targets can differ in terms of the emissions sources included and the depth and speed of emissions reductions. This has fuelled confusion and accusations of greenwashing.
The Net-Zero Standard addresses this problem by providing a clear, consistent and science-based definition of net-zero. Through the SBTi, companies can set science-based net-zero targets to demonstrate their climate action leadership and their commitment to ensuring a habitable planet for all.
Who can set a net-zero target?
The Corporate Net-Zero Standard is intended for companies with more than 500 employees that wish to set net-zero targets through the SBTi.
The SBTi also offers a simplified route for SMEs to set net-zero targets. These companies should refer to the SME FAQ for more information and use the SME target setting system when ready to set net-zero targets.
This Standard does not cover net-zero targets for financial institutions. The SBTi is developing the first global standard for net-zero targets in the financial sector.
How to set a net-zero target
Corporates can follow the SBTi’s established target-setting process to commit to and set science-based targets.
Companies are invited to commit to set net-zero targets by signing the SBTi Commitment Letter. To submit your net-zero target for validation, use the SBTi Target Validation booking system, or for SMEs, use the streamlined SME target setting system.
"We need bold but credible net-zero plans from companies. If you are a business leader who wants to walk the talk, I encourage you to align your company's climate strategy with what is required by science.” Mads Nipper CEO, Ørsted,
Development of the Standard
Development of the Net-Zero Standard followed a thorough, inclusive, and transparent process. The process benefitted from input and expertise from a diverse range of stakeholders and close consultation with an independent Expert Advisory Group formed of experts from academia, civil society, science and business.
Resources
To support the target-setting process, the SBTi has developed key guidance materials. These were drafted, tested, and refined in collaboration with our partners and contributors from the scientific, business and civil society community.
- SBTi Corporate Net-Zero Standard: Provides guidance, criteria and recommendations to support corporates in setting net-zero targets through the SBTi.
- An overview of the Net-Zero Standard: A high-level summary of why the Net-Zero Standard is needed and the key components of a net-zero target.
- Net-Zero Standard Criteria: The criteria companies' net-zero targets must meet to be approved as science-based by the SBTi (also available in Japanese).
- Getting Started Guide: A simple, step-by-step flow chart to help companies understand how to set net-zero targets in their specific situation.
- Net-Zero Tool: Target-setting tool to calculate long-term SBTs in line with the Net-Zero Standard.
- Beyond value chain mitigation FAQ: The SBTi is continuing its work on beyond value chain mitigation to support companies in financing climate action. For more information, visit the project page.
Background resources
Launch of the Net-Zero Standard webinar and slides.
Blog posts
- Science-Based Net-Zero Targets: ‘Less Net, more Zero’
- The SBTi Net-Zero Standard: A beacon of light
- Going Above and Beyond to Contribute to Societal Net-Zero
- Net-Zero: Urgent Beyond Value Chain Mitigation Is Essential
The Net-Zero Standard: A deep dive into setting corporate science-based net-zero targets webinar
Foundations for net-zero target-setting in the corporate sector
Contact
To find out more about the Net-Zero Standard, email info@sciencebasedtargets.org or sign up to receive our net-zero email updates.
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