According to the Science Based Targets Initiative, some businesses’ climate efforts risk being “misguided” or outright “misleading.” Its newly launched Net-Zero Standard is meant to help get businesses back on track.
With the clock ticking to 2050 and carbon emissions still on the rise, a growing number of businesses are committing to take climate action and a growing number of initiatives are there to help. Yet not all are in line with the 1.5 ° C trajectory, which demands drastic emissions reductions within a business’ own value chain.
Suston reaches out to Andres Chang at the Science Based Targets Initiative (SBTi), whose newly-launched Net-Zero Standard is set to bring climate efforts in line with the science.
There have been various certifications and schemes directed at helping and validating companies’ efforts to reduce their GHG emissions. What sets Net-Zero apart?
The Science Based Target initiative’s (SBTi) new Net-Zero Standard is the world’s first framework for corporate net-zero target setting in line with climate science. It provides the guidance and tools companies need to set science-based net-zero targets. Through the SBTi, companies will be able to set verified net-zero targets consistent with limiting temperature rise to 1.5°C.
The SBTi Net-Zero Standard will cover all of a company’s value chain emissions, including those produced by their own processes (scope 1), purchased electricity and heat (scope 2) and those generated by suppliers and end-users (scope 3). What also sets it apart is the SBTi is firmly embedded in the economy as investors and decisionmakers request companies set SBTs and make critical methodological decisions based on the SBTi.
The SBTi has already proved its efficiency in validating near-term emissions reductions targets, and our team of experts and partners makes this the most effective framework in the industry.
What problems were emerging in business pledges and their climate efforts that led to this standard being needed in the first place?
Without a common standard, net-zero targets vary in three important dimensions: what’s covered, what counts, and by when. The SBTi requires net-zero targets that are organization-wide with stringent emissions reductions across the value chain. These net-zero targets are only recognized if they’re supported by near-term science-based targets, too.
Outside the Net-Zero Standard, we’ve seen a mix of good and bad targets. The bad targets can be awfully misleading and reflect poor practice across all three dimensions. There are companies setting net-zero targets that cover just operational emissions, even though downstream emissions are much more important. They might also rely heavily on offsets. You have to assume these companies aren’t changing their business model—they’re certainly not in line with climate goals—and it’s even worse if the nearest target is more than 15 years away.
Now that we have the Net-Zero Standard, there’s a good way to check the quality of net-zero targets and companies have no excuse not to join the cause.
With partners like CDP, the UN, WWF and World Resources Institute, the SBTi undoubtedly bears clout. Is the new standard meant to work side-by-side with the ecosystem of actors that have popped up offering climate consultancy and mitigation services, to help guide it, or to replace it?
The Standard was developed in collaboration with external partners from NGOs, the private sector, and climate experts. So, we hope for it to be the leading validation process for assessing net-zero targets, but not to replace the climate consultancy realm that helps companies achieve validation with the Net-Zero standard. Companies will need a lot of support to actually meet these targets, and they will need to work together across the economy. That’s the real hard part.
The main objective of the Net-Zero Standard was to have science-based means of assessing net-zero pledges to ensure we’re on track to halve global emissions and reach 1.5C, and having additional credible actors in this space helps us to achieve this goal amongst the private sector.
The standard includes the concept of “mitigation hierarchy,” requiring greater reductions within a company’s own value chain than outside of it using instruments like offsets. Can you explain the logic of this?
Under the Net-Zero Standard, it’s essential for companies to reduce their own emissions to a level that’s compatible with a net-zero economy. For most companies, that means reducing emissions across the value chain by at least 90%, and there’s no way around this through offsets. To get to that final 10%, companies can keep reducing emissions further or use permanent removal offsets.
Companies can’t achieve these targets alone because they cover the entire value chain, so most net-zero targets are set for 2040 or later. With the Net-Zero Standard, companies must also have near-term science based targets (no further than 10 years out). Companies should be setting and acting upon these targets, as well as contributing to societal climate goals beyond their value chain through immediate actions. There’s no need to wait until reaching net-zero for that.
There are many companies now choosing to offset their current annual – or even lifetime – emissions with the intent of also reducing their own value chain emissions at a more tempered pace. Is this a worthy ambition? Or misguided?
It’s absolutely misguided – and misleading – for companies to purchase offsets instead of reducing their own emissions. Companies should be reducing their own emissions at science-based rates, as well as contributing to societal climate goals beyond their value chain through immediate actions.
Some companies are already doing this, and we’re working to help drive more of that forward.
Net-Zero vs. Carbon Neutral?
A state of balance between anthropogenic emissions and anthropogenic removals. In most cases, it is important to specify either net-zero CO2emissions or net-zero GHG emissions, which also includes non-CO2 GHGs. Net-zero GHG emissions must be achieved at the global level to stabilize temperature increase, and targets set using the Net-Zero Standard must cover all UNFCCC/Kyoto GHG emissions
The SBTi’s Net-Zero Standard outlines what companies need to do to enable the global economy to achieve net-zero. The Standard makes clear that for corporate net-zero targets in line with keeping global warming to 1.5°C require rapid and deep emission reductions. Companies must take action to halve their emissions by around 2030. Likewise, long-term deep emissions cuts of at least 90% before 2050 are crucial for net-zero targets to align with science.
Although often used interchangeably with ‘net-zero’, the two are not the same. In general, when companies claim carbon neutrality they are counterbalancing CO2 emissions with carbon offsets without necessarily having reduced emissions by an amount consistent with reaching net-zero at the global or sector level. This may conceal the need for deeper emissions reductions that are in line with what the science requires for the world to keep global warming to 1.5°C. Carbon neutrality claims also do not necessarily cover non-CO2 GHGs. The SBTi does not validate carbon neutrality claims.
Source: Science Based Targets Initiative