The Science-Based Target Initiative launches Net Zero Standard to align pledges to real-world metrics.
Net zero has rapidly become the new strategy of choice throughout the climate-minded business and finance communities. As enthusiasm for the concept grows, so do questions about its validity. What is “net” zero? What are the plans and timeframe to achieve it? And how can net zero be effective on a global basis?
These rising doubts were compounded by this week’s report from the U.N. Environment Programme that finds current country decarbonization pledges are setting the world on course to warm to around 2.7°C, leading to “hugely destructive” impacts. However, the Emissions Gap Report 2021 also noted that over 50 countries and the EU — responsible for over half of all global emissions — have pledged net zero targets for 2050. If these commitments turned into actual plans that were implemented, the global temperature rise could be cut by 0.5°C from a projected rise of 2.7°C by 2100. That’s somewhat better news.
But the bad news is big: Many of the announced net zero goals are “ambiguous,” say the report’s authors — particularly, those of the world’s 20 richest nations whose long-term plans are “quite vague.”
At the bottom, is the net zero concept — particularly by 2050 versus a more ambitious 2035 target — just high-minded aspiration detached from actionable reality, i.e. blue sky marketing? Or is it, as promoted, a core strategy in addressing climate change? “Does it mark a positive signaling exercise that will drive real change? Or is it a self-delusion that will collapse when greenhouse gas emissions continue to rise?” as sustainable finance specialist Paolo Berutti wrote in his commentary. “It’s time to talk about net zero bullsh*t.”
“Does it mark a positive signaling exercise that will drive real change? Or is it a self-delusion that will collapse when greenhouse gas emissions continue to rise?”
The Science-Based Targets Initiative (SBTi) thinks it has the answer to these queries and doubts. The just-released SBTi Net Zero Standard, which offers what organizers say is the first certification of companies’ net zero targets aligned with the Paris Agreement’s goal of keeping global warming to 1.5°C. Under this protocol, net zero commitments are assessed against the standard and certified by SBTi.
SBTi has been at work for the past six years to establish the foundations for net zero — working with the U.N. Global Compact, CDP, the World Resources Institute, the World Wide Fund for Nature, and one of the We Mean Business coalition commitments — all highly respected organizations. SBTi’s Business Ambition campaign, launched in 2019 in response to the annual IPCC report, is a major element of the Race to Zero initiative. That global campaign is now the largest alliance committed to achieving net zero carbon emissions by 2050.
This background gives SBTi serious cred in validating the execution of companies’ net zero strategies through its new Net Zero Standard. It’s a history that has logically led the organization from establishing the “foundations” for net zero to evolving the metrics and methodology of the new framework.
I spoke with Alberto Carillo Pineda, co-founder and managing director of the SBTi, about the new Net Zero Standard. My first question was, why another framework in a field that is awash in multiple proposals for measurement and guidance?
“We work in between ambition and accountability,” he said. “At SBTi, we’ve been setting the bar in that area for six years. Especially since the IPCC report of 2019 focused on a target of 1.5 degrees for emissions reductions, we felt we needed to clarify what a science-based net zero target means. Each target being set had powerful marketing but not sufficient details — there was not a lot of technical complexity. Many of the early goals focused on driving net zero were about ambitions.”
Carillo Pineda said the SBTi team also saw the net zero concept being introduced in different ways and wanted to bring order and consistency through independent assessment to validate the concept.
“We didn’t want to set up another ‘club.’”
That said, there’s a lot of alignment with other, existing frameworks. With the Net Zero Standard, he said, “we didn’t want to set up another ‘club.’”
SBTi’s new Net Zero Standard has attracted great interest. After “road testing” the program with 80 companies, seven major corporations have had their science-based net-zero targets verified, among them AstraZeneca, CVS Health, and Ørsted. With a SBTi pool of over 2,000 companies taking action, and almost 1,000 of those committed to the Business Ambition 1.5°C agenda, the Standard would seem to be the next logical step up for hundreds of businesses worldwide
How does SBTI sort out the many complexities among different industries to verify science-based goals with confidence that they are credible in planning and execution?
“The Net Zero Standard methodology varies by sectors, of course,” he said. “Some, like oil and gas, need to decarbonize immediately. [Danish Power company] Ørsted has been an exemplary case for a power company making the transition to clean energy. They were among the first to commit to 1.5°C, even before we issued the framework.”
Carillo Pineda said other industries are harder to abate, such as cement. “The Corporate Standard reflects those differences.”
Given the rapid rate of change, how will verification according to the Corporate Standard be maintained? “We ask companies to review their progress every five years to acknowledge changes in company structure, in science and criteria.”
The goal of the Corporate Standard framework is to reduce emissions while increasing assurance to investors. “For the investment community, clarity and consistency are the first part in making decisions,” says Pineda “We’re providing credible validation to deliver confidence to those investors to support net zero goals.”
To further that goal, SBTi is launching its Net Zero Foundations for Financial Institutions as a draft for public consultation on November 10. Sign up to hear more about the SBTi program and how clarity, transparency and consistency are being brought to bear to turn the ambitious concept of net zero into real-world action.