New SBTi report marks a milestone in developing a standardized Net Zero guide for companies

The Science Based Targets initiative (SBTi) has published a new foundation report that takes the first step to developing a standardized Net Zero guide for companies. Among other things, the report examines and evaluates various possible strategies for corporate climate action. The effectiveness of each approach is analysed in their impact towards meeting the Net Zero target. In addition to this, SBTi also defined for the first time the role of carbon offsetting in meeting this goal.

 

Back in 2018, the IPCC released a special report on global warming which concluded that global emissions would have to be halved by 2030 and reduced to zero by 2050 in order to limit global warming to 1.5°C. Since the report was published, more and more companies are starting to increase their climate ambition and reduce their emissions along the way to meeting their science-based targets.

According to the Science Based Targets initiative, well over 500 companies across the world have already implemented science-based climate targets. However, differing approaches to pursuing these goals has made it difficult to measure their contributions to achieving the global Net Zero goal. SBTi have published their new report with the aim of creating a uniform understanding of the concept of Net Zero and thus improve the consistency among climate strategies and goals.

To do this, the authors examined the various strategies for corporate climate protection and evaluated them on three different levels:

  • Their contributions to meeting the global Net Zero goal
  • Their contributions to meeting the Paris Agreement goals
  • Their long-term compatibility with respective business models

The most ambitious approach is described as the ‘climate positive approach’. Companies that follow this approach will reduce their greenhouse gas emissions within their value chain to an extent that will allow them to meet the Paris Agreement goals. In addition to this, compensating and neutralising carbon emissions play an important role.

Net Zero and the role of carbon offsetting

The report explains that, in order to achieve ambitious climate targets, it is essential to rapidly and significantly reduce global emissions. Whilst carbon offsetting, with the help of carbon sink projects (processes or activities that physically remove carbon from the atmosphere), cannot replace actual reduction of emissions, but they are effective tools that complement emission reductions in accelerating the achievement of Net Zero. This is particularly important for industries and sectors where a substantial reduction in carbon emissions is hindered by a lack of efficient technologies.

As part of the climate positive approach, carbon offsetting and neutralisation of carbon emissions can be used by companies within various phases of reaching Net Zero. Companies that have already reduced greenhouse gas emissions within their value chain and have reached a state of Net Zero emissions can then use carbon sink projects to actively remove carbon emissions from the atmosphere.

Until a company has reached the Net Zero target, it may decide to purchase emission reduction certificates from certified projects as part of the decarbonisation process and use them to offset emissions in addition to reducing them. This takes into account the short-term effectiveness of carbon offsetting. The report explains that, this way, much-needed funding can be invested into activities that avoid emissions or reduce carbon levels in the atmosphere. This allows carbon offsetting to make a significant contribution to the global transition towards Net Zero. The fact that the financial support of climate protection projects also creates positive ecological and social advantages in terms of sustainable development is a positive side effect that should not be underestimated.

First Climate’s standpoint

“This new paper is an important clarification of key concepts related to net-zero and a welcomed step in harmonising the transition process. We are also pleased to see that the Science Based Targets Initiative recognises the role that carbon offsets and removals can play in process. Compensation can help bring about emissions reductions in a process in which there is no time to lose. Recognising and seeking the environmental and social co-benefits that carbon offsetting projects can deliver is an important contribution for corporates to support for en route to global net-zero.”,

Ana Aires Carpinteiro, Carbon Expert at First Climate.

The next steps

In the next step, the Science Based Targets initiative plans to define detailed criteria for setting corporate Net Zero goals alongside developing a corresponding validation protocol and providing comprehensive guidelines for setting science-based targets.

Read the full paper here:
https://sciencebasedtargets.org/wp-content/uploads/2020/09/foundations-for-net-zero-full-paper.pdf