SBTi : net zero standard aimed at ‘sweet spot between climate science and business reality’

The Science Based Targets Initiative (SBTi) has published the second draft of its corporate net zero standard. The draft is currently open to public consultation until 8 December this year.

SBTi’s corporate net zero standard is a guidance tool for companies to set net zero targets through the SBTi’s validation process. Thus far, over 11,000 companies including financial institutions, have set SBTi-validated targets.

The organisation says the proposed changes will streamline and simplify the target setting process, making it accessible across broad range of sectors.

“We’ve listened to a wide range of voices and conducted extensive research to find the sweet spot between climate science and business reality”, said SBTi chief executive David Kennedy.

“The updated draft pairs scientific rigor with practical applicability, recognising the different operational challenges some companies face when it comes to deep, rapid decarbonisation”, he added.

Amongst the proposed changes is an asset decarbonisation strategy for scope 1 emissions. This will require companies to disclose a strategy to ‘abate, replace or phase out’ applicable assets in conformity with its carbon budget.

Another proposed change relates to scope 2 emissions and the coverage of electricity consumption in targets. The draft proposes three options for consideration. The first two cover 100% of electricity consumed but exclude markets where ‘low carbon’ electricity products are not available from suppliers who meet integrity principles or where energy attribute certification systems are not available. The third option reduces target coverage to 95% of electricity consumed.

The new standard also proposes two labels – ‘recognised’ and ‘leadership’ that companies can earn based on the extent to which they take responsibility for their on-going emissions. ‘Leaders’ will be expected to fully internalise the cost of climate change.

After 2035, ‘category A’ companies will face a minimum responsibility requirement. 

“With the publication of this updated draft we are taking a further step forward in making science-based climate action more inclusive, actionable, and adaptable for businesses everywhere”, said Alberto Carrillo Pineda, SBTi’s chief technical officer.