It’s official! The Science Based Targets initiative (SBTi) has launched the highly-anticipated Net-Zero Standard. The first-ever global net-zero framework for business, this guidance will enable companies to set credible and robust net-zero targets in line with a 1.5°C future.
Corporate net-zero commitments have accelerated rapidly in recent years, but without a common, science-based definition, much has been left to interpretation, resulting in concerns about commitment-washing. With clear expectations now set by the Net-Zero Standard, companies can ensure their path to net zero aligns with climate science.
Quantis provided input on the Net-Zero Standard and we’ve put together the key takeaways to bring you up to speed.
“Amid the flurry of net-zero commitments, the new Standard brings much-needed clarity and forces us to face the facts: without drastic reductions, there will be no net zero.”
Global Head of Climate Strategy, Quantis
What you need to know:
- Deep, rapid reductions: The Net-Zero Standard requires prioritizing achieving drastic, absolute reductions across the entire value chain first and foremost. Near-term targets are required to ensure immediate reductions. For long-term targets, the SBTi has defined levels of residual emission reduction targets for various sectors, ranging between 80% to 100%.
- Raised ambition: The SBTi has increased the expectations of all criteria. For near-term targets (starting July 2022), companies must align scope 1+2 ambitions with a minimum of 1.5°C (from well below 2°C) and scope 3 with a minimum of well below 2°C (from 2°C). The target year must be within five to 10 years from the submission date (previously 5-15). Long-term targets must cover 90% of the scope 3 (above the 67% threshold applied to near-term targets) and align with 1.5°C.
- Clarity on claims: To claim net zero, companies will need to have achieved their absolute reduction targets by their target year. In other words, a company committed to reaching net zero by 2040 won’t be able to make net-zero claims unless it has actually reached its 80-100% absolute reduction goal — regardless of engagement in neutralization activities.
- Action beyond value chain: In parallel to emission reductions across their value chains, companies are advised to go further to accelerate the global transition with investments to help mitigate climate change elsewhere, following the mitigation hierarchy.
- The SBTi will begin validating net-zero targets in January 2022. Companies will need to book a slot to verify their net-zero targets and slots are filling up quickly. Get in touch with us to learn more.
- For companies with significant emissions impact on Forest, Land & Agriculture (FLAG), a specific tool and methodology will be released in March 2022 and will include land-use change and removal pathways.
- The SBTi has also released the Net-Zero Tool, which companies can use to determine the level of residual emissions they need to reach by 2050 at the latest.
What you can do:
- If you wish to submit science-based targets, whether near-term, long-term or both, Quantis can guide you through the process.
- If your company has high emissions from FLAG, we recommend waiting until March 2022 for the tailored tool and methodology before setting new targets. In the meantime, Quantis can provide the most up-to-date guidance while we work alongside World Wildlife Fund (WWF) on the development of the FLAG sectorial pathway.
- If you already have approved SBTs and don’t plan on setting long-term net-zero goals, your SBTs are still relevant and you can continue with current goals, reviewing them within the five-year time frame as required.
- If you already have net-zero targets, the Net-Zero Standard can help you determine their credibility and alignment with climate science.
Seven companies have already received approval of net-zero targets through a pilot process and over 600 companies have committed to setting them in the coming months. Now’s the time to set a bold climate strategy and accelerate your company’s sustainable transformation!
Want to learn more about setting net-zero targets? Get in touch with Charlotte Bande.
Global Head of Climate Strategy
Video: Is your net zero commitment credible? Ask a climate expert.
In this edition, our climate expert Charlotte Bande walks us through several steps every company should take before they declare a net-zero goal.