A new process has been launched to develop the first science-based global standard for corporate net-zero targets, in a bid to ensure that company commitments to reach net-zero emissions by the middle of the century will actually meet these goals.
Although more and more companies are making public pledges to reach net-zero carbon emission by no later than 2050, corporate targets have been set inconsistently, making it difficult for stakeholders to assess their implications and ambitions.
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The Science Based Targets initiative (SBTi) has published a new report, ‘Foundations for Science-Based Net-Zero Target Setting in the Corporate Sector,’ to kick-start the process.
It also concludes that reducing value chain emissions in line with climate science must remain the overarching priority for companies – and that offsetting emissions and CO2 removal activities do not eliminate the need for deep emissions reductions.
The SBTi was established in 2015 and is a collaboration between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF). It champions science-based target setting as a powerful way of boosting companies’ competitive advantage in the transition to the low-carbon economy.
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Targets adopted by companies to reduce greenhouse gas (GHG) emissions are considered “science-based” if they are in line with the level of decarbonisation required to keep global temperature increase below 2 degrees Celsius compared to pre-industrial temperatures.
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By GlobalDataThe new paper has been published following extensive consultation with a wide range of stakeholders from the scientific, business, conservation and financial spheres.
It lays out the conceptual foundations for corporate net-zero target setting, including clarity on what it means for companies to reach net-zero emissions, analysis of existing net-zero target setting practices, assessment of strategies that are consistent with achieving a net-zero economy, and initial recommendations for science-based net-zero goals. These will be translated into detailed guidelines.
The paper’s authors conclude that:
- Climate science must inform net-zero strategies in the corporate sector to ensure that the growing momentum behind net-zero translates into action that is consistent with achieving a net-zero world by no later than 2050;
- For a corporate net-zero target to be science-based, two conditions must be met. 1: It must lead to a depth of decarbonisation consistent with the profound cut in emissions needed in the global economy to limit warming to 1.5°C and 2: It must neutralise the impact of any sources of residual emissions that cannot be eliminated by permanently removing an equivalent amount of atmospheric carbon dioxide.
Companies can choose to offset their emissions as they transition towards a state of net-zero emissions, which can help direct finance from companies to activities that can avoid emissions or bring down the concentration of carbon in the atmosphere. However, offsetting emissions does not eliminate the need to reduce emissions in line with science: this must remain the overarching priority for companies and the central focus of any credible net-zero strategy, SBTi says.
“Net-zero by 2050 is our north star but every second that passes between now and then will determine whether we get there,” says Alberto Carrillo Pineda, a report author and director of science based targets at CDP, one of the SBTi partners. “There is no time to lose. Alongside long-term ambition we need to see aggressive emissions reductions in line with climate science, now, and across all sectors of the global economy. Hundreds of companies around the world are already showing that this is possible and putting their trust in science to build the zero-carbon economy of the future.”
Currently, the SBTi validates companies’ greenhouse gas emissions reduction targets if they are consistent with keeping warming to well below 2°C or 1.5°C above pre-industrial temperatures. Over 990 companies have committed to set science-based targets and over 460 have targets validated by the initiative.
At the end of last month, the Global Fashion Agenda and McKinsey issued a report in which they warned the fashion industry is on a trajectory that will miss the 1.5 degree pathway to mitigate climate change by 50%.
