The Net-Zero Standard by the SBTi

3 min read
August 25, 2022 at 5:46 PM

In October 2021, the SBTi launched the world-first Net-Zero Standard. This initiative has emerged to provide companies with a credible science-based certification to meet the Paris Agreement goal of limiting global warming to 1.5°C by 2050. 

The key point in limiting global warming and reaching net-zero emissions at a global level is to reduce emissions within and beyond its value chain and neutralize residual emissions. Net-zero emissions mean that GHG emissions are equal to CO2 removals.

You may feel lost in the flood of information about carbon emissions reductions and what strategies to implement within your company. 

 

In this article, we explain the net-zero standard by SBTi and how to achieve it.

The Science Based Targets initiative (SBTi) is a partnership between CDP, the United Nations Global Compact, World Resources Institute (WRI), and the World Wide Fund for Nature (WWF). SBTi defines and promotes best practices to set emissions reductions and targets considered “science-based.” These targets are in line with the latest climate science to help prevent the worst consequences of climate change and prepare companies for future growth in line with the Paris Agreement.

 

What are the 3 key elements of the Net-Zero Standard?

1. Reduction within the value chain:

 According to the SBTi, abatements are “measures that companies take to prevent, reduce, or eliminate sources of GHG emissions”. Abatement is a priority and a minimum societal expectation to face the environmental crisis and limit global warming below 1.5°C. 

This reduction plan is divided into two phases: near-term targets and long-term targets.

  • Near-term SBTs: In the short term (5-10 years), carbon emissions must be reduced in line with the Paris Agreement (limiting global warming to 1.5°C). Near-term science-based targets are required to achieve significant emissions reductions by 2030.
  • Long-term SBTs: in the long term (by 2050), all emissions must be reduced to a residual level (in line with the Paris Agreement).

 

What can companies do to reduce their emissions? 

  • Adopt existing reduction measures, implement comprehensive decarbonization measures, and mainstream flagship projects throughout the organization. 
  • Invest in research and development of new technological solutions and sustainable transport.
  • Source a majority of renewable energy (renewable electricity) and use a transparent accounting method that reflects the emissions from the electricity consumed rather than the emissions from the electricity purchased. 
  • Disclose details of reduction measures taken by the company in a way that is as transparent as possible and communicate the expected emission reductions as a result of the implementation of those measures throughout the value chain. 
  • Reduce all relevant emission sources across all three scopes and disclose more detailed information about the company’s scope 3 emissions. 

 

2. Beyond value chain mitigation:

Beyond value chain mitigation is the next step for companies to reach net-zero carbon emissions and go beyond their near-term and long-term science-based targets. 

Businesses can go further to mitigate their carbon footprint outside their value chain by undertaking actions, like preventing deforestation or making investments, such as financing projects or new technologies.

 

Beyond value chain mitigation are actions or investments that include activities of avoidance and sequestration of GHG, such as purchasing high-quality credits (Forestry and Land Use like REDD+, conservation projects, like peatland or mangrove, energy efficiency, renewable energy, etc.). This includes activities outside a company’s value chain that avoid or reduce greenhouse gas emissions or permanently remove and store greenhouse gases from the atmosphere.

 

3. Neutralization of residual emissions (within or beyond the value chain):

Neutralization is the last step for companies to achieve the Net-Zero Standard. It consists of removing the remaining emissions from the atmosphere by capturing them and permanently storing them. This can be done within or beyond the value chain through nature-based or engineered solutions, such as direct air carbon capture and storage technologies. Companies can neutralize emissions only once they have achieved their long-term SBT. 

 

Additional climate action: 

Removal of emissions is capturing emitted GHG from the atmosphere to counterbalance the impact of emissions (through permanent removal and permanent storing). Removals can contribute towards “beyond value chain mitigation”, or “neutralization”, depending on whether they are used or not to counterbalance remaining residual emissions.

Although going beyond the value chain is not the main priority for a company, this will be key in limiting global warming to 1.5°C and securing a “liveable future.”