SBTi Enhances Corporate Net Zero Standard with Four Key Updates

The latest updates to the Corporate Net Zero Standard (CNZS) by the Science Based Targets Initiative (SBTi) detail what businesses need to know about setting effective climate targets

CREDIT: This is an edited version of an article that originally appeared on Green Intelligence

The Science Based Targets Initiative (SBTi) has introduced four technical updates to enhance the Corporate Net Zero Standard (CNZS). These revisions are designed to ensure that the CNZS reflects the latest scientific insights on managing business climate impacts and sustainability.

The Corporate Net Zero Standard provides companies with a clear framework for aligning their net zero strategies with climate science. Established in 2014 through a collaboration between CDP, the UN Global Compact, the World Resources Institute and WWF, the SBTi officially launched the CNZS in October 2021.

The four key components businesses should be aware of:

• Near-term targets – rapid and substantial reductions in both direct and indirect value chain emissions. Typically, companies should strive to cut emissions by about 50% by 2030.
• Long-term targets – companies must reduce emissions by over 90% by 2050, eliminating as many emissions as possible.
• Neutralise residual emissions – after reaching their long-term emissions reduction targets, companies should aim to counterbalance the remaining 10% or more of residual emissions through permanent carbon removal and storage solutions.
• Beyond value chain mitigation – companies should invest now in strategies to reduce and remove emissions beyond their own value chain. This proactive approach helps address broader environmental impacts and supports overall climate goals.

The SBTi report

The SBTi’s report acknowledges the challenges organisations encounter in calculating their Scope 3 emissions. In response, their latest paper highlights two key elements to address these difficulties.

First, the report introduces outcome- or alignment-based metrics, which move away from the widely debated practice of carbon offsetting and emphasise direct emissions reduction strategies.

The second element involves outlining scenarios where Environmental Attribute Certificates (EACs) can be utilised. The SBTi categorizes EACs into two types: carbon credits and commodity certificates.

“Today’s announcement marks a key step in the revision process for the Corporate Net Zero Standard,” says Sue Jenny Her, Interim CEO at SBTi. “Over the last decade, the SBTi has validated the targets of over 5,000 companies with another 3,000 companies having committed to submit targets for SBTi validation. Targets are the first step to decarbonization, and it is important that the SBTi conducts a comprehensive process to revise the Standard to help companies take the lead on climate action and drive down emissions.”

Overall, the SBTi’s report provides guidance on incorporating Environmental Attribute Certificates (EACs) into an organisation’s climate strategy.