Understanding the Net-Zero Standard V2: Key Insights for Businesses
Overview
The Science Based Targets initiative (SBTi) has released the consultation draft of its Net-Zero Standard V2, aimed at helping businesses set clear, science-backed targets to reach net-zero emissions. This draft outlines the necessary steps and criteria for companies to follow in reducing their carbon footprint and achieving net-zero by 2050.
Image via SBT
New Criteria for Net-Zero Targets:
The updated Net-Zero Standard v2 outlines essential criteria for businesses looking to set and meet science-based net-zero targets. The new standard makes it clear that businesses must take a comprehensive approach to emissions reductions.
Key Updates Include:
Sector-Specific Guidance: Different industries will follow tailored pathways for achieving net-zero, recognizing the unique challenges and opportunities in each sector.
Increased Accountability: Companies must set near-term interim targets to track progress toward their 2050 goals.
Credible Offsetting: Offsets can only be used after companies have made substantial emissions reductions, ensuring that net-zero targets reflect genuine climate action.
What Businesses Need to Do:
To meet the updated Net-Zero Standard v2, businesses should follow these key steps:
Measure Emissions Accurately: Use reliable data to track direct and indirect emissions across the supply chain.
Set Science-Based Targets: Set clear, science-backed targets that align with the latest climate science and the global 1.5°C goal.
Reduce Emissions First: Prioritize reducing emissions in line with these targets, minimizing the use of offsets.
Review and Report Progress: Regularly assess and publicly report on emissions reductions to maintain transparency and credibility.
Image via SBT
The Role of Offsetting:
The new draft provides clearer guidelines on the role of carbon offsets in achieving net-zero. It stresses that offsets should only be used after companies have reached their direct emissions reduction targets.
High-Quality Offsets: Only carbon credits that meet high standards can be used. These credits must be independently verified to ensure they lead to real, additional emissions reductions.
Limited Use: Offsets are not a shortcut. They should be a final step, not a replacement for direct emissions reductions.
Image via SBT
Emphasis on Near-Term Action:
The updated standard places a strong focus on near-term actions. Companies are encouraged to set interim milestones to ensure progress is being made on the road to net-zero.
Interim Targets: Companies should set measurable targets for 5-10 years ahead, helping to maintain momentum and accountability.
Regular Progress Reviews: Companies are expected to review and update targets based on evolving science and progress in emission reduction technologies.
Image via SBT
Next Steps of Companies:
To align with the new Net-Zero Standard v2, businesses must prepare for stricter guidelines and timelines:
Engage Stakeholders: Collaborate with internal and external stakeholders, including suppliers, to ensure alignment with emission reduction targets.
Adapt Strategies: Revise current climate action plans to meet the new criteria, including setting interim targets and reporting progress specific to the company/industry.
Build Capacity: Invest in the tools and technologies needed to track emissions, reduce carbon footprints, and manage offsetting programs effectively.
The consultation period for the draft is ongoing, and companies are encouraged to provide feedback to help shape the final version of the standard.
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