The Science Based Targets initiative (SBTi) has published the first steps in a new process to develop a science-based global standard for corporate net zero target setting.
With corporate climate ambition growing all the time, the need for a common understanding on what net-zero means for companies and how they can get there has also grown.
Net zero is the point when anthropogenic emissions of greenhouse gases to the atmosphere are balanced by anthropogenic removals over a specified period. The Paris Agreement sets out the need to achieve this balance by 2050 to limit global temperature rise to 1.5°C. In short, net zero targets deliver on climate science.
What’s wrong with existing greenhouse gas target setting?
In recent years, SBTi have led on translating climate science into a framework that allows companies to set ambitious climate targets. However, without a standardised science-based net-zero approach, the corporate sector risks setting targets that don’t actually chime with the scientific reality of what is required. So, in publishing the ‘conceptual foundations’ of this process (the guidance itself will follow after consultation process) SBTi are urging businesses to ground their net-zero plans in science and are providing the necessary tools.
What will this new standard look like?
The key foundation points will strike a chord with those involved in setting corporate greenhouse gas reduction targets:
- Boundary: A net-zero target should cover all material sources of GHG emissions within its value chain.
- Transparency: Transparency about the sources of emissions included and excluded from the target boundary, the timeframe for achieving net-zero emissions, the amount of abatement and neutralization planned in reaching net-zero emissions, and any interim targets.
- Abatement: Companies must aim to eliminate sources of emissions within its value-chain at a pace and scale consistent with 1.5°C with no or limited overshoot. During transition to net zero, compensation and neutralization measures may supplement, but not substitute, reducing value chain emissions. At the time that net zero is reached, emissions that are not feasible for society to abate may be neutralized with equivalent measure of CO2 removals.
- Timeframe: Net-zero GHG emissions should be reached by no later than 2050. Earlier target years are encouraged, but a more ambitious timeframe should not come at the expense of the level of abatement in the target.
- Accountability: Long-term net-zero targets should be supported by interim science-based emission reduction targets to drive action within timeframes that are aligned with corporate planning and investment cycles and to ensure Paris-aligned mitigation pathways.
- Neutralization: Reaching net-zero emissions requires neutralizing a company’s residual GHG emissions with an equivalent amount of carbon removals. So, an effective neutralization strategy involves removing carbon from the atmosphere and storing it for a long-enough period to fully neutralize the impact of any GHG that continues to be released.
- Compensation: Whilst reaching a balance between emissions and removals is the end goal of a net-zero journey, companies should consider undertaking efforts to compensate unabated emissions in the transition to net-zero to contribute to the global transition to net-zero.
- Mitigation hierarchy: Companies should follow a mitigation hierarchy that prioritises eliminating sources of emissions within the value chain of the company over compensation or neutralization measures. So, land-based climate strategies should prioritise interventions that help preserve and enhance existing terrestrial carbon stocks, within and beyond the value chain of the company.
- Environmental and social safeguards: Mitigation strategies should adhere to robust social and environmental principles, ensuring amongst others, protection and/or restoration of naturally occurring ecosystems, robust social safeguards, and protection of biodiversity.
- Robustness: Compensation and neutralization measures should: (a) ensure additionality, (b) have measures to assure permanence of the mitigation outcomes, (c) address leakage and (d) avoid double-counting.
Clearly, a future standard based on these principles will leave little hiding room in setting targets. The mitigation hierarchy really does demote the role of offsetting in favour of achieving actual Scope 1/2/3 reductions, whilst nature-based climate solutions become an unavoidable and integral feature.
Have a look at the work Tricarbon has done with United Utilities to set their own science-based net zero target.