The Corporate Net-Zero Standard launched in 2021 and requires businesses to commit to reducing absolute emissions across all scopes by at least 90% by 2050 or sooner. Businesses seeking to align with this standard should announce their intention to do so, then have their emissions targets verified by the SBTi within 24 months.
Revisions made to the standard this week to add updated information on the target validation process. This was first provided separately in December 2023. The SBTi subsequently created a separate target verification unit to account for increased demand, following a 100%+ year-on-year increase in demand in 2023.
Additionally, the SBTi has clarified which businesses can use the Standard as usual and which can use a more lenient pathway for SMEs.
The SME pathway is not applicable for financial institutions or businesses in the oil and gas sector. Other sectors such as steel, cement and aluminium are also excluded. Additional limitations relate to a business’s emissions, turnover, total assets and staff base.
Another significant tweak has been the embedding of key points from recent guidance on how businesses can design and implement strategies to go beyond value chain mitigation, engaging in activities that accelerate systems change for the global net-zero transition even if they do not reduce a company’s own value chain emissions. Two reports on this topic were released by the SBTi late last month.
The SBTi has also updated its tools intended to support corporates to set verified long-term net-zero targets and near-term targets aligned with 1.5C. Revisions reflect the additions above and are also designed to enhance ease of use.
A statement from the SBTi reads: “The updates are non-substantive revisions that would not significantly impact the manner in which entities conform with SBTi criteria. As such, the documents will be effective immediately.”
The updates come shortly after the SBTi revealed the results of its ‘Business Ambition for 1.5C’ campaign, which encouraged companies of all sectors to set stronger emissions goals in alignment with a 1.5C pathway.
Polls of 971 of the 1,000+ businesses that took part revealed that 84% were able to either set such targets or begin the validation process. However, this still leaves some 280 companies that struggled to do so within the 24-month timeframe required between announcing an intention to verify, and achieving verification. Businesses which missed the deadline for long-term, SBTi-aligned targets included Unilever, Sky and Microsoft.
The most common barrier to target adoption was found to be measuring – and mapping ways to reduce – Scope 3 (indirect) emissions.