Science-Based Targets initiative launches the first global standard for net-zero targets
28th October 2021
Today, the Science-Based Targets initiative (SBTi) launched the SBTi Net-Zero Standard, the first global standard for setting science-based net-zero business targets. The announcement comes in the build-up to the 26th Conference of the Parties (COP26) in Glasgow, and in the wake of a stark report from the UN Environment Programme, laying out the “catastrophic” gap between current emissions trajectories and the emissions levels required to avert the worst impacts of climate breakdown. This article details the latest on the SBTi, the new net-zero standard, and what it means for businesses going forward.
What is the Science-Based Targets initiative?
The Science-Based Targets initiative is a partnership between the UN Global Compact, Carbon Disclosure Project (CDP), World Resources Institute (WRI) and the World Wide Fund for Nature (WWF) – aiming to drive ambitious climate action in the private sector by enabling companies to set science-based emissions reduction targets. In practice, this involves developing robust frameworks, promoting best practice, and validating corporate targets in line with climate science.
Climate change consultant
Image showing growth of the SBTi since 2015, and some of the major companies committed
What are ‘science-based’ and ‘net-zero’ targets?
Targets are considered ‘science-based’ if they are in line with what the latest climate science deems necessary to meet the goals of the Paris Agreement – limiting global warming to well-below 2°C above pre-industrial levels and pursuing efforts to limit warming to 1.5°C.
Targets are considered to be ‘net-zero’ targets if they involve achieving a state at which a company’s greenhouse gas emissions are completely balanced by removals of greenhouse gases from the atmosphere. Due to limited global capacity for greenhouse gas removals, it is understood that companies must make all efforts to decarbonise as a first priority, and only neutralise any ‘unabatable’ residual emissions through carbon removals.
Graph showing a net-zero target under the SBTi framework. Source: SBTi Corporate
Net-Zero Standard (PDF)
These two types of targets are complementary – being ‘science-based’ dictates the speed and scale of reductions required, while the ‘net-zero’ aspect defines the final target state to be achieved by the company. A credible carbon reduction strategy must achieve both.
What does the new standard mean for businesses?
Historically, the SBTi has provided guidance and validation only for near-term (5-15 year) science-based targets, aimed at driving immediate climate action. The new standard, however, expands this – meaning companies can now set and validate longer term science-based net-zero targets. The new standard also provides updates increasing the level of ambition required for near-term targets, in line with the latest climate science.
Table summarising the new requirements for near-term and long-term (i.e. net-zero) science-based targets
This has a number of key implications for businesses:
- Near-term and long-term (net-zero) targets – businesses will be able to submit these for validation by the SBTi, as of January 2022.
- An increase in ambition levels – long-term targets require a minimum of 90% absolute reduction* in emissions across all scopes, and the minimum ambition for near-term targets has been raised from well-below 2ºC to 1.5ºC for scope 1 and 2 emissions, and from 2ºC to well-below 2ºC for scope 3.
- Clearer definitions – long-term targets must reach net zero no later than 2050, starting from a base year no earlier than 2015, and the allowed timeframe for near-term targets has been reduced to 5-10 years (previously 5-15 years). Importantly, companies can not claim net zero until the long term target (~90% reduction) has been achieved.
- Working beyond value chains – companies are encouraged to go beyond value chains in supporting others to accelerate decarbonisation on a global scale.
*with some exceptions for specific sectors such as Forests, Land and Agriculture
Why is it so important?
As companies queue up to announce their net-zero ambitions ahead of COP26, the ever-growing demand for climate action is in many cases being met by corporate greenwashing – with many companies and nations relying on creative accounting methods, unrealistic levels of cheap offsetting, or convenient exclusions of emissions sources from their scope.
As a result, it is vital that a credible definition of net-zero is agreed: one that is robust and appropriate for the scale and urgency of the climate crisis being faced. Going forward, the SBTi’s Net Zero Standard provides a reference point for defining what is, and more importantly what is not, a credible net-zero target – thus providing a standard against which all corporate net-zero targets can be assessed.
What’s missing from the standard?
While the SBTi provides a vital point of reference for good practice and emissions reduction frameworks, there are a number of key issues that remain to be resolved.
- Historic emissions and a Just Transition – latest research shows that just 100 companies are responsible for 71% of historic global emissions, and that there are vast global inequalities in both levels of current emissions, and levels to which different communities, countries and companies have benefitted from these historic emissions. By treating all companies equally, this approach ignores the responsibility of large polluting industries and their beneficiaries for redistributing the benefits gained from their historic emissions, by supporting others in their transition to net zero. As such, it is significantly easier for these large corporations to meet a science-based target, and allows them to artificially ‘do their bit’ without taking reparative action for historic emissions.
- ‘Following the science’ and the need for 100% participance – The SBTi aligns with the Paris Agreement as a point of reference for ambition levels, however it does not recognise that the Paris Agreement is already a compromise – it leads to a 66% chance of staying below 2°C global mean warming above pre-industrial levels throughout the 21st century. The SBTi is seen as the ‘gold standard’ for corporate target-setting, however unless every company in the world aligns the SBTi within the next few years, global emissions will not fall enough to meet even this compromise position.
- Transparency and accountability – Once targets are set, companies are required to measure and report ongoing progress against emissions reductions targets. However, there is no requirement for transparency in terms of calculation methodology, and companies who are failing to meet these targets are not removed from the initiative. As such, there is little accountability or requirement for companies to take any action once their targets are validated.
- Reliance on removals – While the 90% reduction is a welcome development in terms of minimum levels required, it still leaves 10% of global emissions as residual emissions for removal (4.3 billion tCO2e, based on a 2019 base year). For this level of carbon capture and storage to be achieved would require significant deployment of technologies which have not yet been developed or tested at scale, in a very short time frame.
Despite these significant issues however, the SBTi remains the most common and most credible framework for setting validated carbon targets – and the groundbreaking new standard will be key to informing and guiding companies on their net zero journeys. Bearing in mind the issues raised above, it is important that the SBTi is seen as a key minimum level of ambition for all companies in setting carbon targets, and not a gold standard to which only the most progressive companies can aim.
The SBTi is aware of these ongoing issues, and has announced three new projects aimed at resolving them
With the final consultation completed, the new changes will be implemented in 2022. Some sector-specific pathway development is still ongoing, as is the development of guidance on emissions accounting and target setting for the FLAG (Forestry, Land and Agriculture) sector.
You can find more on the SBTi’s Net Zero standard, including full technical details, the latest developments on science-based net zero targets, and how to book a validation slot, here.