SBTi Launches World-First Net-Zero Corporate Standard
Posted on 27 October 2021
SBTi’s science-based Net-Zero Standard launches today to provide a credible and independent assessment of corporate net-zero target setting and enable companies to align their near- and long-term climate action with limiting global warming to 1.5°C.(Thursday 28 October) The Science Based Targets initiative (SBTi), the global body enabling businesses to set emissions reduction targets in line with science of which WWF is a partner, today launches the world-first Net-Zero Corporate Standard.
The SBTi’s Net-Zero Standard is the world’s first science-based certification of companies’ net-zero targets in line with the Paris Agreement’s goal of keeping planetary warming to 1.5°C.
Alberto Carrillo Pineda, Co-Founder and Managing Director of the SBTi, said: “Companies are currently self-defining net-zero targets without credible and independent assessment of their ambition and integrity. For the first time, the SBTi Net-Zero Standard offers companies robust certification to demonstrate to consumers, investors and regulators that their net-zero targets are reducing emissions at the pace and scale required to keep global warming to 1.5°C. We’re now inviting all companies with net-zero targets and ambitions to show stakeholders that their decarbonization pathway is aligned with science. And the rest of the business sector - we call on you to join the Race to Zero.”
Marco Lambertini, WWF Director General, said: “A huge global effort is required to halve emissions before 2030 and achieve net-zero emissions by 2050. This is the least we need to do if we are to avoid the worst impacts of the climate crisis, and build a climate-resilient future for people and nature. So it is imperative for business to use the Science Based Targets initiative’s Net-Zero Standard to accelerate decarbonization efforts at the depth and pace needed to align with the goals of the Paris Agreement.”
Manuel Pulgar-Vidal, WWF Global Lead Climate & Energy and SBTi Board Member, said: “To keep the 1.5°C global temperature target within reach, it is vital to have businesses do their part. But crucially, we need a credible basis for assessing progress. The Science Based Targets initiative’s Net-Zero Standard sets a common, robust and science-based framework for corporate net-zero target-setting. This gives companies the confidence to take their climate actions to the next level. They can be on the right side of history by being part of the transformation to a global net-zero emissions economy.”
The first seven firms to have their net-zero targets certified as part of the SBTi’s pilot scheme are unveiled today. They are: AstraZeneca (UK), CVS Health (US), Dentsu International (UK), Holcim (Switzerland), JLL (US), Ørsted (Denmark), and Wipro (India). More companies are now invited to commit to set net-zero targets, which the SBTi will begin validating from January 2022.
90%+ decarbonization by 2050 is the only route to science-based net-zeroCompanies adopting the Net-Zero Standard will be required to set both near- and long-term science-based targets across all scopes*. Near-term targets cover immediate emissions reductions for the next 5-10 years, while long-term science-based targets determine the total level of decarbonization by 2050 or before.
Through the standard, the SBTi clarifies that science-based net-zero requires companies to achieve deep decarbonization of 90-95% before 2050**. At that point, a company must neutralize any limited residual emissions that are not yet possible to cut. However, the SBTi sets clear parameters that these residual emissions - which must be neutralized through carbon removals - cannot exceed 5-10% of a company’s emissions depending on its sector. Neutralization activities can take the form of technological removals (eg. Direct Air Capture (DAC) with geological storage) and nature-based solutions (eg. reforestation).
The principle at the heart of the SBTi Net-Zero Standard is the “mitigation hierarchy”. This means companies should address value chain emissions and implement strategies to achieve these targets as the main strategy to reach net-zero emissions.
The SBTi recognizes the urgent need to scale up near-term finance to help address the nature and biodiversity crisis and increase the likelihood the global economy limits warming to 1.5°C. Given that, the Standard recommends companies make investments to reduce emissions outside their value chains. However, these investments should be in addition to, not a substitute for, rapid and deep reductions of a company’s own emissions.
Furthermore, the role of finance in corporate decarbonization is vital for the world to reach net-zero emissions. The SBTi is therefore leading efforts to define and develop metrics around what net-zero looks like for financial institutions to decarbonize the real economy and is launching its Net-Zero Foundations for Financial Institutions: Draft for Public Consultation on 10 November 2021.
Developing the first-ever science-based net-zero targetThe Net-Zero Standard was developed in consultation with an independent Expert Advisory Group, made up of experts from academia, civil society, science and business. More than 80 companies took part in a road-test of the Standard in August 2021.
The Expert Advisory Group will continue to refine and develop the Standard in early 2022, specifically looking at best practice in beyond value chain mitigation and how to further support companies in reducing scope 3 emissions.
To date, more than 600 companies have made a commitment to reach science-based net-zero before 2050 through the SBTi’s Business Ambition for 1.5°C campaign. Companies can commit to setting a science-based net-zero target, join this campaign and the UNFCCC Race to Zero on the SBTi website.
Notes to editors:
*The SBTi Net-Zero Standard covers all of a company’s value chain emissions, including those produced by their own processes (scope 1), energy and power they buy in (scope 2) and those generated by suppliers and end-users (scope 3).
**With the exception of the forestry, land-use and agricultural (FLAG) sector in which 20% of carbon removal is permitted after deep decarbonization of 80% by 2050. Currently the GHG Protocol is developing new guidance for corporate land use and removals accounting and, in parallel, the SBTi is developing specific science-based target setting methods for companies with land sector emissions which will provide FLAG companies with the opportunity to factor in land sector emissions and reduction opportunities into their net-zero strategies. This will become mandatory for companies setting SBTs in land-intensive sectors starting in September 2022
For more information, including interviews and comment, please contact:
Mandy Woods, WWF | E: email@example.com
Georgia Dalton, ESG Communications | T: +44 (0)7798751529 | E: firstname.lastname@example.org
Rosie Williams, Science Based Targets initiative | E: Rosie.Williams@cdp.net
About the Science Based Targets initiative
The Science Based Targets initiative (SBTi) is a global body enabling businesses to set ambitious emissions reductions targets in line with the latest climate science. It is focused on accelerating companies across the world to halve emissions before 2030 and achieve net-zero emissions before 2050.
The initiative is a collaboration between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF) and one of the We Mean Business Coalition commitments. The SBTi defines and promotes best practice in science-based target setting, offers resources and guidance to reduce barriers to adoption, and independently assesses and approves companies’ targets. www.sciencebasedtargets.org @sciencetargets