The Net-Zero Standard

"The Net-Zero Standard gives companies a clear blueprint on how to bring their net-zero plans in line with the science, which is non-negotiable in this decisive decade for climate action. Because we are running out of time." Johan Rockström Director of the Potsdam Institute for Climate Impact Research (PIK) and Professor in Earth System Science at the University of Potsdam

The SBTi’s Corporate Net-Zero Standard is the world’s first framework for corporate net-zero target setting in line with climate science. It includes the guidance, criteria, and recommendations companies need to set science-based net-zero targets consistent with limiting global temperature rise to 1.5°C.

The Net-Zero Standard provides a common, robust, and science-based understanding of net-zero. It gives business leaders clarity and confidence that their near- and long-term targets are aligned with climate science - helping to ensure a habitable planet for all.

Development of the Net-Zero Standard followed a thorough, inclusive, and transparent process. This emphasizes input and expertise from a diverse range of stakeholders and close consultation with an independent Expert Advisory Group formed of experts from academia, civil society, science and business.

Key requirements of the Net-Zero Standard

  1. Focus on rapid, deep emission cuts: Rapid, deep cuts to value-chain emissions are the most effective and scientifically-sound way of limiting global temperature rise to 1.5°C. This is the central focus of the Net-Zero Standard and must be the overarching priority for companies. The Net-Zero Standard covers a company’s entire value chain emissions, including those produced by their own processes (scope 1), purchased electricity and heat (scope 2), and generated by suppliers and end-users (scope 3). Most companies will require deep decarbonization of 90-95% to reach net-zero under the Standard
  2. Set near- and long-term targets: Companies adopting the Net-Zero Standard are required to set both near-term and long-term science-based targets. This means making rapid emissions cuts now, halving emissions by 2030. By 2050, organizations must produce close to zero emissions and will neutralise any residual emissions that are not possible to eliminate
  3. No net-zero claims until long-term targets are met: A company is only considered to have reached net-zero when it has achieved its long-term science-based target. Most companies are required to have long-term targets with emission reductions of at least 90-95% by 2050. At that point, a company must use carbon removals to neutralize any limited emissions that cannot yet be eliminated.
  4. Go beyond the value chain: The SBTi recommends Companies to go further by making investments outside their science-based targets to help mitigate climate change elsewhere. There is an urgent need to scale up near-term climate finance; however, these investments should be in addition to deep emission cuts, not instead of them. Companies should follow the mitigation hierarchy, committing to reduce their value chain emissions before investing to mitigate emissions outside their value chains

Watch the livestream of the Virtual Launch Event here and access the slides here.

"We need bold but credible net-zero plans from companies. If you are a business leader who wants to walk the talk, I encourage you to align your company's climate strategy with what is required by science.” Mads Nipper CEO, Ørsted,

Emma Watson, the SBTi's Senior Manager for Net-Zero, explains the key features of the Net-Zero Standard.

Why set a science-based net-zero target?

Net-zero has rapidly moved to the mainstream: in 2019, net-zero pledges covered just 16% of the global economy; by 2021, nearly 70% had committed to net-zero by 2050.

Despite this explosive growth, the definition of net-zero itself, as well as the path to get there, has been interpreted in different, and often inconsistent ways. In the absence of a common definition, targets can differ in terms of the sources of emissions included, the depth and speed at which emissions are reduced, and the timeframe of the target. This has fuelled confusion and accusations of greenwashing. The Net-Zero Standard addresses this problem by providing a clear, science-based definition of net-zero.

The Net-Zero Standard was developed with the intention of guiding corporate transition towards a state of net-zero in a way that is consistent with societal climate and sustainability goals and within the biophysical limits of the planet

Seven companies have validated net-zero targets approved in a pilot validation process for the Standard. In addition, over 600 companies are already committed to setting net-zero targets through the Business Ambition for 1.5C campaign - they have 24 months to submit targets and have them validated by the SBTi

Who can set a net-zero target?

The Net-Zero Standard is intended for corporates with more than 500 employees that wish to commit to setting net-zero targets through the SBTi.

The SBTi also offers a simplified route for SMEs to set net-zero targets, who should refer to the SME FAQ for more information.

This Standard does not cover net-zero targets for financial institutions. The SBTi’s financial sector project has a separate net-zero framework for financial institutions.

How to set a net-zero target

Corporates follow the SBTi’s established target-setting process, used by over 2,000 companies and counting, to commit to and set science-based targets since 2015.

Companies are invited to commit to set net-zero targets by signing the SBTi Commitment Letter. SBTi will begin validating targets from January 2022. To reserve a spot on the waitlist to have your company’s net-zero target validated, please use the Net-Zero Target Validation booking system.

Join the world’s biggest companies by cutting your GHG emissions

COMMIT Submit a letter establishing your intent to set a science-based net-zero target
DEVELOP Work on an emissions reduction target in line with the SBTi’s net-zero criteria
SUBMIT Present your target to the SBTi for official validation
COMMUNICATE Announce your target and inform your stakeholders
DISCLOSE Report company-wide emissions and progress against targets on an annual basis
Submit a letter establishing your intent to set a science-based target

Resources

To support the target-setting process, the SBTi has developed key guidance materials. These were drafted, tested, and refined in collaboration with our partners and contributors from the scientific, business and civil society community.

Contact

To find out more about the Net-Zero Standard, email [email protected]