The Science Based Targets initiative (SBTi) has released a new standard for companies to become ‘net zero’.
The full paper can be found here.
There has been a move recently for companies to report on their full emissions — the direct emissions from their operations (known as Scope 1 and 2) and the indirect emissions that arise from their operations (also known as Scope 3 emissions).
Scope 1 — directly burned fuel (usually gas and heating oil plus any transport directly owned and operated)
Scope 2 — electricity
Scope 3 — everything else. Upstream (supply chains), downstream (product use, disposal, water, waste), business travel, staff commute.
Reporting has tended to be patchy with different companies reporting some subset of their overall emissions and most omitting ‘purchased goods and services’. Some companies have included only business travel in their Scope 3 emissions for example.
The SBTi has created a new standard in an attempt to remedy this and specifically to set a target for companies that aligns with keeping within a 1.5° C global temperature rise.
“Reaching net zero emissions for a company involves achieving a state in which its value chain results in no net accumulation of carbon dioxide in the atmosphere and in no net impact from other greenhouse gas emissions.”
The following are the reports main recommendations (with my notes in italics) — much else in the report is repetition.
1. Boundary: A company’s net zero target should cover all material sources of GHG emissions within its value chain.
This includes ALL Scope 3 emissions.
2. Transparency: Companies should be transparent about the sources of emissions included and excluded from the target boundary, the timeframe for achieving net zero emissions, the amount of abatement and neutralization planned in reaching net zero emissions, and any interim targets or milestones.
This allows you to exclude emissions you don’t want to count.
3. Abatement: Companies must aim to eliminate sources of emissions within its value chain at a pace and scale consistent with mitigation pathways that limit warming to 1.5°C with no or limited overshoot.
Targets must be aggressive.
4. Timeframe: Companies should reach net zero GHG emissions by no later than 2050. While earlier target years are encouraged, a more ambitious timeframe should not come at the expense of the level of abatement in the target.
Targets don’t have to be that aggressive. The UK government has committed to net zero by 2050 so will do most of the heavy lifting for you — only net zero targets substantially before 2050 show any sort of ambition.
5. Accountability: Long-term net-zero targets should be supported by interim science-based emission reduction targets to drive action within timeframes that are aligned with corporate planning and investment cycles and to ensure emission reductions that are consistent with Paris-aligned mitigation pathways.
Gibberish. Just set a target and go for it.
6. Neutralisation: Reaching net zero emissions requires neutralizing a company’s residual GHG emissions with an equivalent amount of carbon removals. An effective neutralisation strategy involves removing carbon from the atmosphere and storing it for a long-enough period to fully neutralize the impact of any GHG that continues to be released into the atmosphere.
Carbon offsets should be of the higher quality — preferably geological storage (not sure if any of these exist yet).
7. Compensation: While reaching a balance between emissions and removals is the end goal of a net zero journey, companies should consider undertaking efforts to compensate unabated emissions in the transition to net-zero as a way to contribute to the global transition to net zero.
You should can partially offset your emissions on the way to fully offsetting them.
8. Mitigation hierarchy: Companies should follow a mitigation hierarchy that prioritizes eliminating sources of emissions within the value chain of the company over compensation or neutralisation measures. Land-based climate strategies should prioritise interventions that help preserve and enhance existing terrestrial carbon stocks, within and beyond the value chain of the company.
You should reduce your emissions — not just offset.
9. Environmental and social safeguards: Mitigation strategies should adhere to robust social and environmental principles, ensuring amongst others, protection and/or restoration of naturally occurring ecosystems, robust social safeguards, and protection of biodiversity, amongst others.
Offsets should be of high quality.
10. Robustness: Compensation and neutralisation measures should: (a) ensure additionality, (b) have measures to assure permanence of the mitigation outcomes, (c) address leakage and (d) avoid double-counting.
Offsets should be of high quality.
Summary
Companies that want to prove their environmental credentials should:
Account for all of their carbon — including Scope 3 emissions
Have a plan for reducing emissions directly
Offset any residuals through high quality offsets