Defining a Global Net-Zero Standard

By Kevin Boon


REAL Sustainability attended the Science Based Targets Initiative (SBTi) webinar on 28 January 2021 launching the public consultation process on the SBTi Net-Zero Criteria. The public consultation is open until 26 February 2021.

The speakers were

Alberto Carrillo Pineda – Director, Science Based Targets, CDP

Alexander Farsan – Global Lead, Science Based Targets, WWF

Nate Aden – Senior Associate, WRI

Elena Stecca – Associate Director, Commit to Action, CDP

Recognizing the importance of keeping global warming to 1.5°C, companies are increasingly adopting net-zero climate targets. While the growing interest in net-zero targets represents an unparalleled opportunity to drive corporate climate action, it also creates the pressing need for a common understanding of “net-zero,” as existing targets vary widely in boundaries, definitions, timeframes, and mitigation strategies used. To avoid confusion and inconsistent claims that potentially undermine the credibility and impact of corporate net-zero targets, a science-based framework is needed to translate the growing momentum behind net-zero targets into action consistent with achieving climate stabilisation.

To address this need, the SBTi is undertaking an inclusive, stakeholder-informed process to develop the net-zero standard, which will enable companies to set robust and credible net-zero targets in line with a 1.5°C future. The standard will include a set of criteria for net-zero targets, allowing companies to have their net-zero targets validated by the SBTi, as well as user friendly guidance for net-zero target-setting.


About Science Based Targets Initiative

SBTi is a collaborative project initiated in 2015 involving CDP, UN Global Compact, World Resources Institute and World Wide Fund for Nature working with the We Mean Business Coalition and other partners. Its intention is to embed the implementation of the Paris Agreement into the real economy by driving the adoption of science-based targets based on the Paris Agreement goals.  

The organisation’s vision is that science-based greenhouse gas (GHG) emission reduction target setting will become standard business practice and corporations will play a critical role in the transition towards a zero-carbon economy.

Following commitment to a science-based target or a net-zero target, companies go through a target setting phase and then target implementation process. There are almost 1200 companies taking action with over 500 having approved targets. Over 380 companies are committed to the Business Ambition for 1.5oC campaign where targets are aligned with 1.5oC or net-zero.  The rate of adoption of science-based targets doubled in 2020 compared to the period 2015-2019 with over 370 companies joining the SBTi in 2020 including Amazon, Facebook and Ford. In 16 OECD countries, a critical mass of 20% of high-emitting companies has been reached. For more information see SBTi’s 2020 progress report.


SBTi Corporate Net-zero Standard process

The process was launched last year with a Net-Zero Foundations Paper setting out key concepts and definitions. 

The report defined net-zero as reaching a state of no impact on the climate from GHG emissions. It proposed that setting net-zero targets aligned with meeting societal climate goals requires:

  • Achieving a scale of value chain emissions reduction consistent with the level of reduction in 1.5oC pathways
  • Neutralising the impact of any residual emissions by permanently removing an equivalent volume of carbon dioxide.

To develop the first draft of the criteria, SBTi convened a diverse Expert Advisory Group to provide advice and direction. Two phases of public consultation are planned with the first being the current consultation. Decisions are being developed through building consensus and all outputs are subject to comprehensive and rigorous reviews by stakeholders. SBTi is planning to launch the standard in time for this year’s COP26.

Net-zero criteria

Some of the key points relating to the criteria are set out below. The simplified net-zero target trajectory is as follows:

  • Interim science-based targets: companies shall have interim SBTs that meet specific leadership criteria (eg target ambition and boundary)
  • Net-zero target: targets shall include deep decarbonisation of value chain emissions paired with carbon removals that neutralise all residual emissions
  • Optional compensation (offsetting): companies are encouraged to compensate for unabated emissions (those not reduced) by providing annual support to projects, programs and solutions that provide quantifiable benefits to climate, people and nature.

The net-zero target year shall be no later than 2050 in line with the IPPC 1.5oC requirement. If the net-zero target year is beyond a certain date, interim SBTs will be required.

Value chain emissions need to be abated by an amount consistent with gross emissions reductions achieved at global net-zero in 1.5oC-aligned pathways. For example, if gross global emissions need to be reduced by 90% by a certain year to limit warming to 1.5oC, a company using absolute contraction would also need to reduce its emissions by 90%.  Both absolute and intensity targets are eligible within the criteria.

Emissions in scopes 1, 2 and 3 are required to be included in the emissions abatement boundary of net-zero targets. Three approaches to determining minimum scope 3 boundary coverage are being considered and feedback is sought in the current public consultation.

Companies shall set a target to neutralise all residual value chain emissions with permanently removed carbon. Neutralisation is not intended to lessen the need for companies to abate value chain emissions at a minimum determined science-based rate. Direct emissions (scope 1) need to be neutralised with direct removals (scope 1) or removals acquired using contractual instruments (e.g. carbon removal “credits”). Companies shall demonstrate that all unabated indirect emissions (scopes 2 and 3) are uniquely neutralised. This means that if a company procures a commodity from a producer which still has some embedded emissions, they either need to demonstrate that emissions have been neutralised along that value chain or the company itself needs to neutralise the emissions. The criteria do not explicitly differentiate between different carbon removal approaches, however, durability of storage is a key factor addressed by the criteria.

SBTi invite feedback on a number of key questions relating to timeframe, level of ambition, target type, scope 3 target boundary, neutralisation targets and compensation actions.

SBTi will be developing separate criteria for financial institutions.