SBTi launches new Net-Zero Standard

Share on facebook
Share on twitter
Share on linkedin
Share on email
Share on whatsapp

SBTi launches Net-Zero Standard

Ahead of COP26, the Science-based Targets initiative (SBTi) launched a new net-zero emissions standard for businesses that is compatible with the Paris Agreement. The standard requires deep decarbonisation of 90-95% of emissions by 2050, and sets out near- and long-term targets for the entire value chain. The remaining 5 to 10% of value chain emissions should be removed from the atmosphere and sequestered in carbon sinks in order to achieve net-zero. In addition, companies are encouraged to invest in carbon offset projects that reduce emissions outside their value chain. 

 Why is the Net-Zero Standard important? 

While around 70% of the world’s economies are covered by net-zero or carbon neutral objectives, the gap between the current global trajectory and the one required by the latest science remains alarming. The latest UN Emissions Gap report warns current commitments to cut greenhouse gas emissions put the planet on track for an average 2.7°C temperature rise this century. 

This gap between commitments and real impacts highlights the importance of setting credible, science-based targets to guide and accelerate the necessary transformations.  

Developed with the help of an independent advisory group of experts from the scientific and academic community, civil society, and business, this standard provides a solution to certify these targets and thus to remedy the wide disparity and lack of comparability between the objectives announced by companies.  

The first seven certified companies demonstrate its feasibility  

More than 80 companies took part in a trial of the standard in August 2021. Seven of them have had their net-zero emission targets certified by SBTi.  

How to be a pioneer? 

All companies are encouraged to set targets in line with the new standard. In particular, the 300 companies, including Atos, that have made a commitment to achieve net-zero emissions by 2050 through the Business Ambition for 1.5°C campaign.  

The SBTi will begin the validation process from January 2022. The online booking calendar available to interested companies is filling up fast, reflecting the recognition the initiative has gained.  

Deep decarbonisation of 90-95% of all emissions, and near & long-term targets 

Companies adopting the standard will be required to set near-term science-based targets (SBTs) and long-term reduction targets for all emissions scopes (1, 2 and 3). Near-term targets should cover immediate emission reductions for the next five to ten years (SBTs), while long-term net-zero targets will determine the total level of decarbonisation by 2050.  

With this standard, the SBTi clarifies that net-zero implies that companies commit to a deep decarbonisation of 90-95% before 2050. Only once this condition is met, the SBTi recommends to ‘neutralise’* the emissions that cannot yet be reduced. The ‘neutralisation’* of these emissions can take the form of removing carbon from the atmosphere through nature-based solutions (such as reforestation) or through technological means (capture and storage). 

A company will have achieved zero net emissions, when it has achieved this long-term goal 

The SBTi sets clear criteria to ensure that residual emissions do not exceed 5-10% of a company’s emissions, depending on its sector. The fundamental principle governing the standard is the ‘mitigation hierarchy’: companies must commit to reducing emissions throughout their value chain before investing in mitigation outside of it.  

Financing decarbonisation through carbon offsetting in parallel 

However, support for emission mitigation outside the value chain through voluntary carbon offsetting remains highly important and necessary. In view of the urgent need to mobilise short-term finance and develop international solidarity, the initiative recommends that companies also invest in carbon offsetting projects to reduce emissions outside their value chain. These mechanisms should remain additional and in no way replace emission reductions. 

What opportunities for harmonising corporate voluntary commitments?  

To limit climate change in line with the latest scientific knowledge, it is crucial to base the corporate approach on a comprehensive, recognised framework grounded in science.  

The major problem for corporate commitments was the absence, not only of a strict and ambitious regulatory framework, but also of a recognised voluntary standard reflecting the latest scientific knowledge.  

This obstacle has now been removed, as this standard provides a definition of the objectives towards net-zero emissions at company level. It is a significant step towards harmonising companies’ voluntary commitments and an opportunity for them to align themselves with the Paris Agreement’s 1.5°C trajectory within a robust framework.  

Benefits of the Net-Zero Standard for your company 

Aligning with this new standard gives recognition to the corporate climate approach. This provides a clear way to demonstrate that targets are based on GHG emission reductions according to climate science. Compliance with the standard not only ensures that your commitment is technically correct and in-line with the latest science, but also that it can be communicated transparently and intelligibly to your stakeholders through this new common framework. 

As climate experts, we advise organisations, as always, to rely on recognised standards and to avoid using terms that have not been defined or standardised, or that suggest no impact, such as ‘carbon-free’ or ‘zero-carbon’. 

Demonstrating your progress certified by an independent third party allows you to move from a claims-based model to a performance-based model. Relying on the most robust and scientifically grounded approaches is a key to success in staying ahead of your competitors and ever-changing regulations, as well as meeting the growing expectations of your stakeholders. 

If you would like to know more about how to adopt this new standard and be supported in setting your goal towards net-zero emissions, please contact us. 





*Neutralisation (also referred to as removal): measures that companies take to remove carbon from the atmosphere and permanently store it to counterbalance the impact of emissions that remain unabated (not yet reduced). 

Share on facebook
Share on twitter
Share on linkedin
Share on email
Share on whatsapp
Share on facebook
Share on twitter
Share on linkedin
Share on email
Share on whatsapp


About EcoAct

At EcoAct we are driven by a shared purpose to make a difference. To help businesses to implement positive change in response to climate and carbon challenges, whilst also driving commercial performance.
Follow us here:
© 2023 EcoAct.
All rights reserved.