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What companies need to know about the new SBTi’s Net Zero Standard

December 1, 2021
What companies need to know about the new SBTi’s Net Zero Standard

A few days before the COP26, the Science Based Targets Initiative (SBTi) launched the world’s first Net-Zero Corporate Standard. The concept of ‘Net Zero’ has gained increasing popularity, leading to inconsistent approaches. This is the first science-based certification of companies’ net-zero targets in line with the Paris Agreement’s goals, by providing a unified framework to businesses.


More than 80 companies took part in a road-test of the Standard back in summer and 7 firms have already their net-zero targets certified as part of the SBTi’s pilot scheme. These are AstraZeneca, CVS Health, Dentsu International, Holcim, JLL, Ørsted, and Wipro.


There are four key requirements of the Net-Zero Standard:

Focus on rapid, deep emission cuts

The Net-Zero Standard covers a company’s entire value chain emissions, making this requirement the central focus of the standard and the top priority of the companies.

Set near- and long-term targets

It is important for companies to rapidly cut emissions now as they must produce close to zero emissions by 2050. Setting both near-term and long-term science-based targets is required.

No net-zero claims until long-term targets are met

Only when a company has achieved its long-term science-based target can be considered to have reached net-zero. Emissions that are not possible to be eliminated, need to be neutralized, by using carbon removals.

Go beyond the value chain

Companies should follow the mitigation hierarchy. First commit to reduce the value chain emissions and then invest to mitigate emissions outside the value chains.


What are the benefits of setting a net-zero target?


Besides the obvious benefits for the environment, net-zero targets can boost investor confidence and therefore profitability. Moreover, they drive innovation, reduce regulatory uncertainty and strengthen brand reputation. Companies are currently undergoing a dynamic shift in how they set, measure and report climate targets. The quality and ambition of their commitments should not lead to criticism and skepticism.


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