SBTi’s New Net-Zero Corporate Standard (Updated)

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What is the SBTi?

The SBTi is an initiative launched in collaboration with the UNGC (United Nations Global Compact), CDP (formerly, Climate Disclosure Project), the World Resource Institute (WRI), and the World Wildlife Fund (WWF). It aims to help companies set targets that are in line with what the latest science has deemed necessary to achieve the standard of 1.5C warming set in the Paris Agreement.

Why the SBTi?

Historically, there has never been a standard definition of the term "net-zero," which resulted in inconsistent and unequal targets with minimal overall impact, enabling companies to "greenwash" their objectives and impacts. The SBTi now acts as the leading international standard for net-zero strategies to ensure that corporates have a credible, robust, and sufficient plan in place.

SBTi Net-Zero Standard for Corporates

This October, the SBTi released new corporate guidelines that help define a credible net-zero target. Specifically, the standard specifically defines:

  • the emissions reductions that a company has to make in order to reduce warming to 1.5C and stay in line with the Paris Agreement;
  • the types of offsets and other mechanisms that are key to neutralising residual emissions;
  • the nature of the claims a company can and cannot make regarding net-zero.

Benefits of the SBTi

Reducing GHG emissions in line with scientific requirements is both good for the planet and corporations. However, aligning to the SBTi also provides a range of commercial and organizational benefits such as:

  1. increasing investor confidence;
  2. boosting profitability;
  3. driving innovation;
  4. reducing regulatory uncertainty;
  5. strengthening brand reputation.

How can you align to the SBTi?

To secure accreditation and ongoing (annual) verification with the SBTi, a corporate must:

  1. Commit - submit a letter stating your intent to set a science-based target.
  2. Develop – establish an emissions reduction target in line with the SBTi criteria.
  3. Submit - Present your target to the SBTi for official validation.
  4. Communicate - Publish your target and inform stakeholders.
  5. Disclose - Report company-wide emissions levels and progress against targets annually

Developing a SBTI-aligned Net-Zero Strategy

The most complex and time-consuming aspect of the SBTi journey focuses on developing an emissions reduction strategy across a corporation's global portfolio. To ensure that organizations
are formulating valid net-zero strategies, they must ensure that their plans suitably account for and address:

  1. developing short-term science-based targets – i.e., 5-10 year emissions reduction targets in line with 1.5C pathways.
  2. developing long-term science-based targets – i.e., targets to reduce emissions to a residual level in line with 1.5C scenarios by no later than 2050.
  3. beyond value chain mitigation - In the transition to net-zero, companies should act to mitigate emissions beyond their value chains. For example, purchasing high-quality, jurisdictional REDD+ credits or investing in direct air capture (DAC) and geologic storage.
  4. neutralise residual emissions - GHGs released into the atmosphere when the company has achieved their long-term SBT must be counterbalanced through the permanent removal and storage of carbon from the atmosphere.

How NUS can help

NUS Consulting Group works with corporations around the world to produce Science-Based Target initiatives aligned with net-zero strategies. Our specialist sustainability division helps organisations better understand the SBTi process, calculate their carbon emissions and produce bespoke decarbonisation targets and roadmaps that align with the net-zero targets and milestones. NUS has the experience and confidence to support any organisation on its journey to net-zero.

More: Research Notes, Decarbonization, Net-Zero, Science-Based Targets initiative (SBTi)

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Zeba Zaidi