Yesterday, the Science Based Targets initiative (SBTi) launched the world’s first Net-Zero Standard. Here are the key things you need to know for setting targets in your business.
What is the SBTi Net-Zero Standard?
The SBTi Net-Zero Standard is the first framework for building net-zero targets that are based on climate science. It provides a common, robust framework to support companies in credibly aligning their near- and long-term climate action with the 1.5°C Paris Agreement Goal.
Net-zero emissions are achieved when all GHG emissions caused by humans are balanced out by an equivalent amount of GHG removals over a specified period.
5 key decisions taken in the Standards
- There is a focus on decarbonise first. The first plan of attack should be to decarbonise their business and value chain as much as possible. Carbon removal is only to be used as a last resort. At Altruistiq, we believe that this is a very important and cost-effective approach to decarbonisation.
- Emission neutralisation must come from permanent carbon removals and any investment and mitigation efforts outside of their supply chain should be seen as a bonus, not an alternative.
- Near-term targets are paired with long-term targets to ensure companies create immediate plans to rapidly reduce emissions within the next few years. The short-term rapid plans should then flow into supporting the longer-term targets.
- Scope 3 targets have an expansive boundary to support businesses through the complexity of Scope 3 change. Only 67% coverage is required in short term targets and a larger 95% coverage in the long-term target. This gives companies the time to collaborate through the whole supply chain, driving systemic change.
- No net-zero claims until long-term targets are met. A company is only considered to have reached net-zero when it has achieved its long-term target.
What does the framework actually consist of?
Step 1: Decarbonise the business and it’s value chain.
- Requires a near-term target between 5–10 years. This follows the current science-based target reduction standards.
- Requires a long-term target of no later than 2050. This target should reduce emissions to a ‘residual level’ (i.e. decarbonise everything that is possible to be decarbonised). A long-term target isn’t necessary if the near-term target reaches the residual level of emissions.
Step 2: Neutralise the residual emissions
- Any emissions that are infeasible to be reduced by 2050 should be balanced out with carbon removal offsets. Carbon removal should be used as a last resort.
Optional Step 3: Mitigate beyond the value chain
- Look to mitigate emissions through abatement or removal by purchasing credits, investing in direct air capture, geological storage, etc.
With COP26 around the corner, the release of these standards is timely and welcome. Particularly in a world with varied and sometimes unverifiable corporate sustainability pledges. Companies can already sign up to commit and validate their SBTi targets. SBTi will begin validating net-zero targets in January 2022.
For feedback on this article or questions related to how your organisation should approach sustainable reporting, drop us a line at insights@altruistiq.com.
Altruistiq is a sustainability SaaS and helps some of the world’s largest companies to sustainably sell more, spend less, and save time.
