The concept of Net Zero can sometimes create confusion and ambiguity. Even the most well-meaning of interpretations can differ vastly by organisation. This not only undermines the credibility and ambition of the strategies, it reinforces the difficulty of truly understanding how effective climate action can be achieved. The new Science Based Target initiative (SBTi’s) Corporate Net-Zero Standard has been welcomed by businesses across the board to commit to a clear and meaningful Net Zero target before the clock times out.
So, what exactly are SBTis, what’s the deal with the new standard and what should every Sustainability Manager know?
Why was the new Net Zero standard needed?
Rigour and credibility have always been central to the goals of the SBTi, a collaboration of organisations dedicated to the fight against climate change. The introduction of science-based targets provided a way for organisations to demonstrate their commitment to a low-carbon future and meet growing pressure from investors and consumers alike while aligning to the climate science. However, beyond SBT commitments, there was general recognition that not all emissions pledges are created equally – which makes fair comparison difficult to achieve. A new corporate standard was devised in consultation with over 400 organisations to give greater clarity and understanding on what is required to achieve the longer term target of Net Zero – and avoids the opportunity for any corporate greenwashing.
What key changes does the new Net Zero standard bring?
A target shake-up is one of the biggest changes, and one that shines a light on corporate action. For organisations that commit to the new corporate standard, there is now a mandatory requirement to set both short-term and long-term (before 2050) science-based targets across all 3 scopes of emission. Short term is now more narrowly defined as between 5-10 years, as opposed to the previous 5-15 years’ timeframe. And with carbon levels at an all-time high, targets submitted after 15 July 2022 will now only be validated if they align with limiting temperature warming to 1.5°C.
It’s all about 1.5°C
A lot has happened since Paris. In recognition of the latest science, all targets must now align with a 1.5°C future as part of the new corporate standard. Every increment that we nudge over 1.5°C warming runs the risk of unleashing even more severe climate-related effects. Think severe weather events, coastal erosion and rising temperatures to name a few. The next few years will be critical in preventing this. From July 2022, the SBTi will only validate near-term targets for scope 1 and 2 emissions that align with limiting warming to 1.5°C or below, and any near-term scope 3 targets must have a minimum ambition of well below 2°C.
Carbon offsets cannot contribute towards targets
All emissions reductions set out in the new standard must be achieved without the use of carbon offsets. The SBTi continues to recommend additional decarbonisation action outside of a business’ value chain in recognition of the urgency of the situation – however this is not considered an eligible way of meeting targets. Carbon offsets are only considered an acceptable measure across global industries as a way to neutralise the final 5-10% of residual emissions, once net zero targets have been met.
What does this mean for my existing SBTs?
All businesses are encouraged to revise targets to meet the new requirements. Those that already have validated targets approved for well below 2°C will have until 2025 to update them to the latest criteria. Any organisation with targets previously approved can update them using the free process provided via the Target Ambition Update Form.
The Net Zero Standard is being welcomed by industry – as evidenced by the immediate uptake by large corporates globally, and is widely viewed as a powerful message signalling much-needed change.
If you want to understand more about the new corporate standard and the benefits that Net Zero can offer your organisation, contact Maisie Auld, Head of Carbon and Climate Resilience at Edge Environment.