The process to develop the first science-based global standard for corporate net-zero target setting has been launched by the Science Based Targets initiative. Its aim is to ensure the targets that companies set will translate into action that is consistent with achieving a net-zero world by no later than 2050, as a matter of urgency.
Interestingly, whilst the launch paper notes the potential value of carbon offsets as part of the transition to net zero, its authors make a point of saying that offsetting does not eliminate the need to reduce emissions in line with science, as a priority for companies and the central focus of any credible net-zero strategy.
Currently, the Science Based Targets initiative (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. Already, almost 1,000 companies have committed to set science-based targets, with over 460 having had targets validated by the initiative. Nearly 300 — representing over $3.6 trillion in market cap and ranging from ADOBE to Zurich Insurance — have signed the Business Ambition for 1.5°C commitment.
The 2018 Special Report on 1.5°C from the Intergovernmental Panel on Climate Change (IPCC) warned that global emissions must drop to net-zero by 2050 for the best chance of avoiding the most catastrophic impacts of climate change. In response, comes the process from the SBTi, which is marked with the publication of a new paper that lays out the conceptual foundations for credible, science-based net-zero targets for the corporate sector.
The new paper from the SBTi, Foundations for Science-Based Net-Zero Target Setting in the Corporate Sector, is published following extensive consultation with a wide range of stakeholders from the scientific, business, conservation and financial spheres.
The paper 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.
The conceptual foundations discussed in the paper will be translated into detailed guidelines and criteria to be developed by the initiative as part of a continued multi-stakeholder process.
The paper 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: 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; 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 may choose to offset their emissions as they transition towards a state of net-zero emissions. This can help direct much needed 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.
Emphasising the urgency of the call to action, Alberto Carrillo Pineda, a report author and Director of Science Based Targets at CDP, one of the SBTi partners, said:
“Net-zero by 2050 is our north star but every second that passes between now and then will determine whether we get there. 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.”
Placing the process in the context of a collective response to COVID-19, Nigel Topping, UK High Level Climate Action Champion for COP26, said:
“As governments work to recover from the devastating economic impacts of the Coronavirus pandemic, we have a unique opportunity to rebuild a healthy, resilient and zero carbon economy that mitigates future threats, creates decent jobs, and unlocks inclusive, sustainable growth.
“Ambition is growing, and as we ramp up our collective efforts to deliver on the Paris Agreement, we must unite behind science to guide our action. That means a robust and science-based understanding of what net-zero means, and what needs to happen in order to get there.”
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. Already, at least 989 companies have committed to set science-based targets and over 467 have targets validated by the initiative.
To date, 294 companies — representing over $3.6 trillion in market cap — have responded to the open letter and signed the Business Ambition for 1.5°C commitment, aligning themselves with the goal of reaching net-zero emissions by 2050 through the Business Ambition for 1.5°C campaign, led by the SBTi in partnership with the UN Global Compact and the We Mean Business coalition.
Offering a busines endorsement of the aims of the paper, Andreas Ahrens, Head of Climate at Inter IKEA Group, one of the companies to have joined the Business Ambition for 1.5°C campaign, said:
“We as the business community need to do our utmost to contribute to limiting climate change to 1.5°C. This includes halving absolute greenhouse gas emissions for the total value chain – scopes 1, 2 and 3 – by 2030. Long-term we need to reach net-zero emissions, and this paper is a vital first step for adding clarity and principles around that goal. Now more than ever, IKEA remains committed to transforming our business and becoming climate positive by 2030.”
The Science Based Targets initiative mobilises companies to set science-based targets and boost their competitive advantage in the transition to the low-carbon economy. It is a collaboration between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF). It is one of the We Mean Business Coalition commitments. The SBTi defines and promotes best practice in science-based target-setting, offers resources and guidance to reduce barriers to adoption, and independently assesses and approves company targets.
Further Reading:
- View/Download Foundations for Science-Based Net-Zero Target Setting in the Corporate Sector (PDF);
- Access full list of companies that have signed the Business Ambition for 1.5°C commitment;
- View/Download chapter-by-chapter summaries of 2018 Special Report on 1.5°C from IPCC;
- More about the Science Based Targets initiative, in general;
- More about the UN Global Compact;
- More about the World Resources Institute (WRI);
- More about the We Mean Business coalition.
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