Everything You Need to Know About the SBTi’s New Net-Zero Standard
The Science-Based Target Initiative (SBTi) has just released their Net-Zero Standard. This is a big deal for all companies looking to join the fight against climate change and help keep global temperature rise in check.
Read on to discover what, exactly, the Standard is, who can participate, how to get involved, and more!
What is the Net-Zero Standard?
The Net-Zero Standard is the world’s first framework for corporate net-zero target setting in line with climate science. It includes the guidance, criteria, and recommendations companies need to set science-based net-zero targets consistent with limiting the global temperature rise to 1.5°C.
The Net-Zero Standard provides a common, robust, and science-based understanding of net-zero, giving business leaders the clarity and confidence that their near- and long-term targets are aligned with climate science.
Key Requirements of the Net-Zero Standard
- Focus on rapid, deep emission cuts: Rapid, deep cuts to value-chain emissions are the most effective way to limit global temperature rise to 1.5°C. This is the central focus of the Net-Zero Standard and must be the main priority for companies. The Net-Zero Standard covers a company’s entire value chain emissions, including those produced by their own processes (scope 1), purchased electricity and heat (scope 2), and generated by suppliers and end-users (scope 3). Most companies will require deep decarbonization of 90-95% to reach net-zero under the Standard.
- Set near- and long-term targets: Companies adopting the Net-Zero Standard are required to set both near-term and long-term science-based targets. This means making rapid emissions cuts now, halving emissions by 2030. By 2050, organizations must produce close to zero emissions and will neutralize any residual emissions that are not possible to eliminate.
- No net-zero claims until long-term targets are met: A company is only considered to have reached net-zero when it has achieved its long-term science-based target. Most companies are required to have long-term targets with emission reductions of at least 90-95% by 2050. At that point, a company must use carbon removals to neutralize any limited emissions that cannot yet be eliminated.
- Go beyond the value chain: The SBTi recommends companies to go further by making investments outside their science-based targets to help mitigate climate change elsewhere. There is an urgent need to scale up near-term climate finance; however, these investments should be in addition to deep emission cuts, not instead of them. Companies should follow the mitigation hierarchy, committing to reduce their value chain emissions before investing to mitigate emissions outside their value chains.
Why Set a Net-Zero Target?
Besides the obvious benefits for the environment, setting a net-zero target can help your company:
- Boost profitability
- Improve investor confidence
- Drive innovation
- Reduce regulatory uncertainty
- Strengthen brand reputation
Who Can Set a Net-Zero Target?
The Net-Zero Standard is intended for companies with more than 500 employees that wish to commit to setting net-zero targets through the SBTi.
The SBTi also offers a simplified route for SME’s to set net-zero targets, who should refer to the SME FAQ for more information.
This Standard does not cover net-zero targets for financial institutions. The SBTi’s financial sector project has a separate net-zero framework for financial institutions.
How to Set a Net-Zero Target
Companies will follow the SBTi’s established target-setting process, used by over 2,000 companies and counting, to commit to and set science-based targets.
Companies are invited to commit to set net-zero targets by signing the SBTi Commitment Letter. SBTi will begin validating targets from January 2022. To reserve a spot on the waitlist to have your company’s net-zero target validated, use the Net-Zero Target Validation booking system.
See the diagram below for the steps to set your target.
How WatchWire Can Help
WatchWire can help you achieve your net-zero target, no matter how big or small a feat. Our energy and sustainability management software can:
- Keep you on pace to reach your science-based target by clearly illustrating your progress
- Provide you with real time or interval data monitoring to determine areas of inefficiency or track your renewable generation investments
- Measure your water, GHG emissions, and energy use
- Track your scope 1, 2 and 3 emissions
- Help you measure and verify the effectiveness of your efficiency projects
- Benchmark your efforts against national averages
- Streamline sustainability reporting with integrations to all frameworks, like LEED ARC and ENERGY STAR Portfolio Manager.
WatchWire helps along your company’s entire sustainable (or net zero) journey. In addition to the above, WatchWire makes procuring renewable energy easier by providing market expertise and ensuring supply contract decisions are optimized for future operations at your facility. WatchWire will also track your contracts to ensure their performance is meeting expectations. Maybe your company already installed solar panels last year; WatchWire helps measure and verify the efficiency of your distributed energy resources, allowing you to track how much they are saving you in terms of utility costs and emissions.
To learn more about WatchWire, check out the WatchWire Fact Sheet. Or, if you want to discover more about increasing sustainability at your company, browse through our e-Book, “Utilizing Sustainability Reporting in the Journey Towards Net Zero.”