When it comes to achieving corporate net zero, precise targets need to be set based on a crystal-clear, commonly-agreed definition. Only this way can we set the stage for decisive action, accountability, and demonstrable success. That’s where the Science Based Targets initiative’s (SBTi) Corporate Net-Zero Standard comes in.
While many companies around the world have already committed to net-zero goals, “not all net-zero targets are equal. Without adhering to a common definition, net-zero targets can be inconsistent, and their collective impact is strongly limited.” As that inconsistency could have severe consequences, the SBTi published the world’s most up-to-date definition of corporate net zero in October 2021. This clarity allows every company to make confident, evidence-based moves towards net zero and paves the way for widespread corporate accountability.
SBTi defines corporate net zero as a 50% reduction in total scope 1, 2, and 3 emissions by 2030, and a 90-95% reduction by 2050, where carbon removal initiatives account for a maximum of 5-10%. The SBTi provides lots of useful resources for small and medium-sized enterprises (SMEs) seeking to make a meaningful impact. The focus for SMEs, however, is on reducing scope 1 and 2 emissions. While this remains crucial for the fight against the climate crisis, without accounting for their value chain emissions (scope 3), SMEs cannot get net zero certified.
It’s important to note that this definition requires companies to reduce their emissions rather than offset them. Offsetting actions, no matter how well-intentioned, are either ineffective or simply not enough on their own and removal initiatives are, at present, often hard to measure. There simply is no acceptable trade-off against the harm done by greenhouse gas emissions.
For example, trees must be planted in a native, diverse habitat and receive ongoing care and protection. If instead, offset projects plant non-native trees at a large scale, this can have detrimental effects on local ecosystems, increasing the likelihood of wildfires and depleting groundwater. The best way to combat greenhouse gas emissions: don’t produce them in the first place.
Using the SBTi’s definition should prevent corporations from making net-zero claims that are not supported by comprehensive proof. The Net-Zero Tracker provides an overview of 2,000 of the largest publicly-traded companies in the world by revenue. Their team found that though 929 of those 2,000 companies have technically committed to net-zero targets, ineffective GHG accounting undermines those claims – only 4% of company net-zero commitments meet the revised ‘Starting Line criteria’, set out in June 2022 by the UN Race to Zero campaign. Most often, this is because companies do not cover scope 3 emissions, they have committed to unproven offsetting strategies, or they plan to use carbon dioxide removal.
Take Walmart as an example. Walmart has made an official commitment to reach net zero by 2040. While that sounds ambitious, the world’s largest retailer does not plan to account for scope 3 which, according to the company itself, accounts for 95% of its total emissions.
The SBTi definition helps companies set meaningful goals and removes any excuse that corporations could hide behind when it comes to ineffective and uncertified net-zero pledges. The goals are clear and there are steps outlined for how to achieve them. The climate crisis is not a PR opportunity that can be navigated through greenwashing campaigns or impressive-sounding spin – failure to properly account for and slash reductions is not an option.
