A review of SBTI’s Corporate Net Zero Standard
On 28 October 2021, the Science Based Targets Initiative (SBTi) launched the first-ever global standard for net-zero criteria, just before COP26. Rightly so, it launched with an abundance of media coverage and overall positivity. The development process for defining the Corporate Net-Zero Standard Criteria was extensive, having started back in 2019 with a scoping phase. The process involved two public consultations, a company road test and establishing a dedicated Net-Zero Expert Advisory Group (EAG).
Four key elements make up a corporate net-zero target according to SBTi. These are:
1. A near-term science-based target (by 2030 latest);
2. A long-term science-based target (by 2050 latest);
3. Mitigation beyond the value chain; and
4. Neutralization of any residual emissions.
Spherics’ Head of Climate Science Duncan Oswald was one individual who contributed to this process, by providing feedback via the public consultation process. In addition to lots of technical details, five key themes emerged from Spherics’ feedback during the consultation process.
Five key feedback themes:
1. Offsetting: A need to clearly differentiate between carbon reduction and offsetting, with prioritisation and preference being given to the former. Furthermore, setting a maximum of 10% emissions reduction through offsetting would inevitably mean that companies will aim for that. Yet if this approach were adopted globally, there would not be enough offsetting capacity to cope with the remaining emissions.
2. Targeting: Further simplification on the explanation around near-term and long-term targets. For example, the target and mitigation pathway methodology ignores the time-dependent nature of carbon budgets, which is critical to achieving any ambition for a cap on global temperature rise.We were also interested in understanding how the standard could/would adapt if it becomes clear that 1.5°C cannot be achieved.
3. Scope 3: Concern that Scope 3 emissions were exempt from the revised 1.5°C ambition, despite, for many companies, Scope 3 including the vast majority of emissions. For example, Scope 3 emissions would not automatically be counted towards the two thirds boundary in near-term SBTs and 95% boundary in long-term SBTs. Only if a company’s Scope 3 emissions were at least 40% of total emissions (scope 1, 2, and 3 emissions), would at least 67% of Scope 3 emissions be covered.
4. Accountability: Concern that the guidance allows for many caveats, get-outs, special considerations and, worst case, cheats. If the aim of the standard is to achieve genuine and meaningful rates of decarbonisation, then a firmer line needs to be taken.
5. Guidance: The accompanying Corporate Manual and Getting Starting Guide, at the time, were difficult to understand and lacked both structure and visuals to make them more engaging.
So, was our feedback taken onboard? Does the standard live up to the hype and offer a clear way forward for corporations to reach net zero? Here’s my review of the first Corporate Net Zero Standard by SBTi.
Review of SBTi’s Corporate Net Zero Standard
Who’s it for?
Corporates with more than 500 employees that wish to commit to setting net-zero targets through the SBTi.
Although not directly intended for SMEs, SMEs could use this document to understand the key elements of a science-based net-zero target and the SBTi’s recommended target-setting process.
Who’s involved?
The SBTi is a global body enabling businesses to set ambitious emissions reductions targets in line with the latest climate science. It is a partnership between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF). It’s also in collaboration with We Mean Business Coalition.
What does it aim to achieve?
The main objective of this standard is to provide a standardised and robust approach for corporates to set net-zero targets that are aligned with climate science.
The Net-Zero Standard gives business leaders confidence that their near-term and long-term targets are aligned with what is needed to contribute to a habitable planet, and it provides clarity on business climate action to a wide range of stakeholders.
What does it do?
The Net-Zero Standard provides guidance, criteria, and recommendations to support corporates in setting net-zero targets through the SBTi.
Through the SBTi, companies can commit to net-zero, which includes setting validated near-term and long-term science-based targets consistent with limiting temperature rise to 1.5°C, to become distinguished as climate leaders and drive forward the global transition to net-zero.
Pro’s
- SBTi states that no net-zero claims can be made, until long-term targets are met; this should reduce greenwashing and drive tangible action.
- Most companies are required to have long-term targets with emission reductions of at least 90-95% by 2050.
- Parent companies must include subsidiaries in their target boundary.
- Huge credit should be given to the team at SBTI for operating such a transparent multi-stakeholder process.
Con’s
- It’s voluntary, so uptake will always be limited.
- Companies can take a variety of approaches to developing targets, with SBTi only ‘recommending’ five steps. This allows for manipulation and divergence.
- It isn’t relevant to all, so its authority and ability to unite all businesses is somewhat watered-down. For example, SMEs(1) and financial institutions(2) have alternative guidance.
- More work could be done to streamline both the standard itself (65 pages!) and the additional resources, to engage and empower businesses further.
How does Spherics plan to integrate with it?
The Net-Zero Standard is all about achieving real decarbonisation, and demonstrating it in a robust and reliable way. To achieve this, companies need an accurate picture of their carbon footprint, a measure of the quality of the data and calculations used to generate it, and a clear path to achieve decarbonisation goals in the limited time remaining.
Spherics does all of this, starting with automated analysis of accounting data that is already collected. Our deep supply chain network methodology generates a precise carbon footprint in real time, which is refined every time any subscriber interacts with the system. Like SBTi, Spherics is based on the GHG Protocol, and reports automatically in the recognisable format used by both. It also goes beyond these existing frameworks by providing detailed information on the relative importance and underlying data quality for each reporting category and scope, so businesses and their customers can see not only what their carbon footprint is, but also how reliable it is.
SBTi’s reluctance to tackle Scope 3 emissions appears to be based on how complex and difficult this process is. However, with automated platforms such as Spherics, this is no longer the case, so any justification there may have been for excluding these emissions no longer applies.
Final thoughts
With a growing number of businesses committing to reach net-zero emissions, it is abundantly clear that not all net-zero targets are equal. Whilst the SBTi Net-Zero Standard may not go far enough to draw a clear line between the good, the bad and the downright ugly net zero targets out there, it has made huge strides for standardising the approach corporations should take.
That’s why I believe it’s crucial SBTi and others continue to create a growing movement around the standard. At least until the UK Government introduces enforceable regulations, alongside clear parameters and guidance, to force all businesses to take action. Organisations like B Lab UK and the B Corp Certification have successfully done this, where regulation has failed.
We’d love to know your thoughts? Please comment and share on LinkedIn.
Contact
Rebecca Burgess,Chief Engagement Officer
rebecca@spherics.io
You may also like
Not all carbon offsets are equal, a guide to help you pick the right schemes
A review of SBTI’s Corporate Net Zero Standard
On 28 October 2021, the Science Based Targets Initiative (SBTi) launched the first-ever global standard for net-zero criteria, just before COP26. Rightly so, it launched with an abundance of media coverage and overall positivity. The development process for defining the Corporate Net-Zero Standard Criteria was extensive, having started back in 2019 with a scoping phase. The process involved two public consultations, a company road test and establishing a dedicated Net-Zero Expert Advisory Group (EAG).
Four key elements make up a corporate net-zero target according to SBTi. These are:
1. A near-term science-based target (by 2030 latest);
2. A long-term science-based target (by 2050 latest);
3. Mitigation beyond the value chain; and
4. Neutralization of any residual emissions.
Spherics’ Head of Climate Science Duncan Oswald was one individual who contributed to this process, by providing feedback via the public consultation process. In addition to lots of technical details, five key themes emerged from Spherics’ feedback during the consultation process.
Five key feedback themes:
1. Offsetting: A need to clearly differentiate between carbon reduction and offsetting, with prioritisation and preference being given to the former. Furthermore, setting a maximum of 10% emissions reduction through offsetting would inevitably mean that companies will aim for that. Yet if this approach were adopted globally, there would not be enough offsetting capacity to cope with the remaining emissions.
2. Targeting: Further simplification on the explanation around near-term and long-term targets. For example, the target and mitigation pathway methodology ignores the time-dependent nature of carbon budgets, which is critical to achieving any ambition for a cap on global temperature rise.We were also interested in understanding how the standard could/would adapt if it becomes clear that 1.5°C cannot be achieved.
3. Scope 3: Concern that Scope 3 emissions were exempt from the revised 1.5°C ambition, despite, for many companies, Scope 3 including the vast majority of emissions. For example, Scope 3 emissions would not automatically be counted towards the two thirds boundary in near-term SBTs and 95% boundary in long-term SBTs. Only if a company’s Scope 3 emissions were at least 40% of total emissions (scope 1, 2, and 3 emissions), would at least 67% of Scope 3 emissions be covered.
4. Accountability: Concern that the guidance allows for many caveats, get-outs, special considerations and, worst case, cheats. If the aim of the standard is to achieve genuine and meaningful rates of decarbonisation, then a firmer line needs to be taken.
5. Guidance: The accompanying Corporate Manual and Getting Starting Guide, at the time, were difficult to understand and lacked both structure and visuals to make them more engaging.
So, was our feedback taken onboard? Does the standard live up to the hype and offer a clear way forward for corporations to reach net zero? Here’s my review of the first Corporate Net Zero Standard by SBTi.
Review of SBTi’s Corporate Net Zero Standard
Who’s it for?
Corporates with more than 500 employees that wish to commit to setting net-zero targets through the SBTi.
Although not directly intended for SMEs, SMEs could use this document to understand the key elements of a science-based net-zero target and the SBTi’s recommended target-setting process.
Who’s involved?
The SBTi is a global body enabling businesses to set ambitious emissions reductions targets in line with the latest climate science. It is a partnership between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF). It’s also in collaboration with We Mean Business Coalition.
What does it aim to achieve?
The main objective of this standard is to provide a standardised and robust approach for corporates to set net-zero targets that are aligned with climate science.
The Net-Zero Standard gives business leaders confidence that their near-term and long-term targets are aligned with what is needed to contribute to a habitable planet, and it provides clarity on business climate action to a wide range of stakeholders.
What does it do?
The Net-Zero Standard provides guidance, criteria, and recommendations to support corporates in setting net-zero targets through the SBTi.
Through the SBTi, companies can commit to net-zero, which includes setting validated near-term and long-term science-based targets consistent with limiting temperature rise to 1.5°C, to become distinguished as climate leaders and drive forward the global transition to net-zero.
Pro’s
- SBTi states that no net-zero claims can be made, until long-term targets are met; this should reduce greenwashing and drive tangible action.
- Most companies are required to have long-term targets with emission reductions of at least 90-95% by 2050.
- Parent companies must include subsidiaries in their target boundary.
- Huge credit should be given to the team at SBTI for operating such a transparent multi-stakeholder process.
Con’s
- It’s voluntary, so uptake will always be limited.
- Companies can take a variety of approaches to developing targets, with SBTi only ‘recommending’ five steps. This allows for manipulation and divergence.
- It isn’t relevant to all, so its authority and ability to unite all businesses is somewhat watered-down. For example, SMEs(1) and financial institutions(2) have alternative guidance.
- More work could be done to streamline both the standard itself (65 pages!) and the additional resources, to engage and empower businesses further.
How does Spherics plan to integrate with it?
The Net-Zero Standard is all about achieving real decarbonisation, and demonstrating it in a robust and reliable way. To achieve this, companies need an accurate picture of their carbon footprint, a measure of the quality of the data and calculations used to generate it, and a clear path to achieve decarbonisation goals in the limited time remaining.
Spherics does all of this, starting with automated analysis of accounting data that is already collected. Our deep supply chain network methodology generates a precise carbon footprint in real time, which is refined every time any subscriber interacts with the system. Like SBTi, Spherics is based on the GHG Protocol, and reports automatically in the recognisable format used by both. It also goes beyond these existing frameworks by providing detailed information on the relative importance and underlying data quality for each reporting category and scope, so businesses and their customers can see not only what their carbon footprint is, but also how reliable it is.
SBTi’s reluctance to tackle Scope 3 emissions appears to be based on how complex and difficult this process is. However, with automated platforms such as Spherics, this is no longer the case, so any justification there may have been for excluding these emissions no longer applies.
Final thoughts
With a growing number of businesses committing to reach net-zero emissions, it is abundantly clear that not all net-zero targets are equal. Whilst the SBTi Net-Zero Standard may not go far enough to draw a clear line between the good, the bad and the downright ugly net zero targets out there, it has made huge strides for standardising the approach corporations should take.
That’s why I believe it’s crucial SBTi and others continue to create a growing movement around the standard. At least until the UK Government introduces enforceable regulations, alongside clear parameters and guidance, to force all businesses to take action. Organisations like B Lab UK and the B Corp Certification have successfully done this, where regulation has failed.
We’d love to know your thoughts? Please comment and share on LinkedIn.
Contact
Rebecca Burgess,Chief Engagement Officer
rebecca@spherics.io
You may also like
A review of SBTI’s Corporate Net Zero Standard
On 28 October 2021, the Science Based Targets Initiative (SBTi) launched the first-ever global standard for net-zero criteria, just before COP26. Rightly so, it launched with an abundance of media coverage and overall positivity. The development process for defining the Corporate Net-Zero Standard Criteria was extensive, having started back in 2019 with a scoping phase. The process involved two public consultations, a company road test and establishing a dedicated Net-Zero Expert Advisory Group (EAG).
Four key elements make up a corporate net-zero target according to SBTi. These are:
1. A near-term science-based target (by 2030 latest);
2. A long-term science-based target (by 2050 latest);
3. Mitigation beyond the value chain; and
4. Neutralization of any residual emissions.
Spherics’ Head of Climate Science Duncan Oswald was one individual who contributed to this process, by providing feedback via the public consultation process. In addition to lots of technical details, five key themes emerged from Spherics’ feedback during the consultation process.
Five key feedback themes:
1. Offsetting: A need to clearly differentiate between carbon reduction and offsetting, with prioritisation and preference being given to the former. Furthermore, setting a maximum of 10% emissions reduction through offsetting would inevitably mean that companies will aim for that. Yet if this approach were adopted globally, there would not be enough offsetting capacity to cope with the remaining emissions.
2. Targeting: Further simplification on the explanation around near-term and long-term targets. For example, the target and mitigation pathway methodology ignores the time-dependent nature of carbon budgets, which is critical to achieving any ambition for a cap on global temperature rise.We were also interested in understanding how the standard could/would adapt if it becomes clear that 1.5°C cannot be achieved.
3. Scope 3: Concern that Scope 3 emissions were exempt from the revised 1.5°C ambition, despite, for many companies, Scope 3 including the vast majority of emissions. For example, Scope 3 emissions would not automatically be counted towards the two thirds boundary in near-term SBTs and 95% boundary in long-term SBTs. Only if a company’s Scope 3 emissions were at least 40% of total emissions (scope 1, 2, and 3 emissions), would at least 67% of Scope 3 emissions be covered.
4. Accountability: Concern that the guidance allows for many caveats, get-outs, special considerations and, worst case, cheats. If the aim of the standard is to achieve genuine and meaningful rates of decarbonisation, then a firmer line needs to be taken.
5. Guidance: The accompanying Corporate Manual and Getting Starting Guide, at the time, were difficult to understand and lacked both structure and visuals to make them more engaging.
So, was our feedback taken onboard? Does the standard live up to the hype and offer a clear way forward for corporations to reach net zero? Here’s my review of the first Corporate Net Zero Standard by SBTi.
Review of SBTi’s Corporate Net Zero Standard
Who’s it for?
Corporates with more than 500 employees that wish to commit to setting net-zero targets through the SBTi.
Although not directly intended for SMEs, SMEs could use this document to understand the key elements of a science-based net-zero target and the SBTi’s recommended target-setting process.
Who’s involved?
The SBTi is a global body enabling businesses to set ambitious emissions reductions targets in line with the latest climate science. It is a partnership between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF). It’s also in collaboration with We Mean Business Coalition.
What does it aim to achieve?
The main objective of this standard is to provide a standardised and robust approach for corporates to set net-zero targets that are aligned with climate science.
The Net-Zero Standard gives business leaders confidence that their near-term and long-term targets are aligned with what is needed to contribute to a habitable planet, and it provides clarity on business climate action to a wide range of stakeholders.
What does it do?
The Net-Zero Standard provides guidance, criteria, and recommendations to support corporates in setting net-zero targets through the SBTi.
Through the SBTi, companies can commit to net-zero, which includes setting validated near-term and long-term science-based targets consistent with limiting temperature rise to 1.5°C, to become distinguished as climate leaders and drive forward the global transition to net-zero.
Pro’s
- SBTi states that no net-zero claims can be made, until long-term targets are met; this should reduce greenwashing and drive tangible action.
- Most companies are required to have long-term targets with emission reductions of at least 90-95% by 2050.
- Parent companies must include subsidiaries in their target boundary.
- Huge credit should be given to the team at SBTI for operating such a transparent multi-stakeholder process.
Con’s
- It’s voluntary, so uptake will always be limited.
- Companies can take a variety of approaches to developing targets, with SBTi only ‘recommending’ five steps. This allows for manipulation and divergence.
- It isn’t relevant to all, so its authority and ability to unite all businesses is somewhat watered-down. For example, SMEs(1) and financial institutions(2) have alternative guidance.
- More work could be done to streamline both the standard itself (65 pages!) and the additional resources, to engage and empower businesses further.
How does Spherics plan to integrate with it?
The Net-Zero Standard is all about achieving real decarbonisation, and demonstrating it in a robust and reliable way. To achieve this, companies need an accurate picture of their carbon footprint, a measure of the quality of the data and calculations used to generate it, and a clear path to achieve decarbonisation goals in the limited time remaining.
Spherics does all of this, starting with automated analysis of accounting data that is already collected. Our deep supply chain network methodology generates a precise carbon footprint in real time, which is refined every time any subscriber interacts with the system. Like SBTi, Spherics is based on the GHG Protocol, and reports automatically in the recognisable format used by both. It also goes beyond these existing frameworks by providing detailed information on the relative importance and underlying data quality for each reporting category and scope, so businesses and their customers can see not only what their carbon footprint is, but also how reliable it is.
SBTi’s reluctance to tackle Scope 3 emissions appears to be based on how complex and difficult this process is. However, with automated platforms such as Spherics, this is no longer the case, so any justification there may have been for excluding these emissions no longer applies.
Final thoughts
With a growing number of businesses committing to reach net-zero emissions, it is abundantly clear that not all net-zero targets are equal. Whilst the SBTi Net-Zero Standard may not go far enough to draw a clear line between the good, the bad and the downright ugly net zero targets out there, it has made huge strides for standardising the approach corporations should take.
That’s why I believe it’s crucial SBTi and others continue to create a growing movement around the standard. At least until the UK Government introduces enforceable regulations, alongside clear parameters and guidance, to force all businesses to take action. Organisations like B Lab UK and the B Corp Certification have successfully done this, where regulation has failed.
We’d love to know your thoughts? Please comment and share on LinkedIn.
A review of SBTI’s Corporate Net Zero Standard
On 28 October 2021, the Science Based Targets Initiative (SBTi) launched the first-ever global standard for net-zero criteria, just before COP26. Rightly so, it launched with an abundance of media coverage and overall positivity. The development process for defining the Corporate Net-Zero Standard Criteria was extensive, having started back in 2019 with a scoping phase. The process involved two public consultations, a company road test and establishing a dedicated Net-Zero Expert Advisory Group (EAG).
Four key elements make up a corporate net-zero target according to SBTi. These are:
1. A near-term science-based target (by 2030 latest);
2. A long-term science-based target (by 2050 latest);
3. Mitigation beyond the value chain; and
4. Neutralization of any residual emissions.
Spherics’ Head of Climate Science Duncan Oswald was one individual who contributed to this process, by providing feedback via the public consultation process. In addition to lots of technical details, five key themes emerged from Spherics’ feedback during the consultation process.
Five key feedback themes:
1. Offsetting: A need to clearly differentiate between carbon reduction and offsetting, with prioritisation and preference being given to the former. Furthermore, setting a maximum of 10% emissions reduction through offsetting would inevitably mean that companies will aim for that. Yet if this approach were adopted globally, there would not be enough offsetting capacity to cope with the remaining emissions.
2. Targeting: Further simplification on the explanation around near-term and long-term targets. For example, the target and mitigation pathway methodology ignores the time-dependent nature of carbon budgets, which is critical to achieving any ambition for a cap on global temperature rise.We were also interested in understanding how the standard could/would adapt if it becomes clear that 1.5°C cannot be achieved.
3. Scope 3: Concern that Scope 3 emissions were exempt from the revised 1.5°C ambition, despite, for many companies, Scope 3 including the vast majority of emissions. For example, Scope 3 emissions would not automatically be counted towards the two thirds boundary in near-term SBTs and 95% boundary in long-term SBTs. Only if a company’s Scope 3 emissions were at least 40% of total emissions (scope 1, 2, and 3 emissions), would at least 67% of Scope 3 emissions be covered.
4. Accountability: Concern that the guidance allows for many caveats, get-outs, special considerations and, worst case, cheats. If the aim of the standard is to achieve genuine and meaningful rates of decarbonisation, then a firmer line needs to be taken.
5. Guidance: The accompanying Corporate Manual and Getting Starting Guide, at the time, were difficult to understand and lacked both structure and visuals to make them more engaging.
So, was our feedback taken onboard? Does the standard live up to the hype and offer a clear way forward for corporations to reach net zero? Here’s my review of the first Corporate Net Zero Standard by SBTi.
Review of SBTi’s Corporate Net Zero Standard
Who’s it for?
Corporates with more than 500 employees that wish to commit to setting net-zero targets through the SBTi.
Although not directly intended for SMEs, SMEs could use this document to understand the key elements of a science-based net-zero target and the SBTi’s recommended target-setting process.
Who’s involved?
The SBTi is a global body enabling businesses to set ambitious emissions reductions targets in line with the latest climate science. It is a partnership between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF). It’s also in collaboration with We Mean Business Coalition.
What does it aim to achieve?
The main objective of this standard is to provide a standardised and robust approach for corporates to set net-zero targets that are aligned with climate science.
The Net-Zero Standard gives business leaders confidence that their near-term and long-term targets are aligned with what is needed to contribute to a habitable planet, and it provides clarity on business climate action to a wide range of stakeholders.
What does it do?
The Net-Zero Standard provides guidance, criteria, and recommendations to support corporates in setting net-zero targets through the SBTi.
Through the SBTi, companies can commit to net-zero, which includes setting validated near-term and long-term science-based targets consistent with limiting temperature rise to 1.5°C, to become distinguished as climate leaders and drive forward the global transition to net-zero.
Pro’s
- SBTi states that no net-zero claims can be made, until long-term targets are met; this should reduce greenwashing and drive tangible action.
- Most companies are required to have long-term targets with emission reductions of at least 90-95% by 2050.
- Parent companies must include subsidiaries in their target boundary.
- Huge credit should be given to the team at SBTI for operating such a transparent multi-stakeholder process.
Con’s
- It’s voluntary, so uptake will always be limited.
- Companies can take a variety of approaches to developing targets, with SBTi only ‘recommending’ five steps. This allows for manipulation and divergence.
- It isn’t relevant to all, so its authority and ability to unite all businesses is somewhat watered-down. For example, SMEs(1) and financial institutions(2) have alternative guidance.
- More work could be done to streamline both the standard itself (65 pages!) and the additional resources, to engage and empower businesses further.
How does Spherics plan to integrate with it?
The Net-Zero Standard is all about achieving real decarbonisation, and demonstrating it in a robust and reliable way. To achieve this, companies need an accurate picture of their carbon footprint, a measure of the quality of the data and calculations used to generate it, and a clear path to achieve decarbonisation goals in the limited time remaining.
Spherics does all of this, starting with automated analysis of accounting data that is already collected. Our deep supply chain network methodology generates a precise carbon footprint in real time, which is refined every time any subscriber interacts with the system. Like SBTi, Spherics is based on the GHG Protocol, and reports automatically in the recognisable format used by both. It also goes beyond these existing frameworks by providing detailed information on the relative importance and underlying data quality for each reporting category and scope, so businesses and their customers can see not only what their carbon footprint is, but also how reliable it is.
SBTi’s reluctance to tackle Scope 3 emissions appears to be based on how complex and difficult this process is. However, with automated platforms such as Spherics, this is no longer the case, so any justification there may have been for excluding these emissions no longer applies.
Final thoughts
With a growing number of businesses committing to reach net-zero emissions, it is abundantly clear that not all net-zero targets are equal. Whilst the SBTi Net-Zero Standard may not go far enough to draw a clear line between the good, the bad and the downright ugly net zero targets out there, it has made huge strides for standardising the approach corporations should take.
That’s why I believe it’s crucial SBTi and others continue to create a growing movement around the standard. At least until the UK Government introduces enforceable regulations, alongside clear parameters and guidance, to force all businesses to take action. Organisations like B Lab UK and the B Corp Certification have successfully done this, where regulation has failed.
We’d love to know your thoughts? Please comment and share on LinkedIn.
Contact
Rebecca Burgess,Chief Engagement Officer
rebecca@spherics.io
You may also like
A review of SBTI’s Corporate Net Zero Standard
On 28 October 2021, the Science Based Targets Initiative (SBTi) launched the first-ever global standard for net-zero criteria, just before COP26. Rightly so, it launched with an abundance of media coverage and overall positivity. The development process for defining the Corporate Net-Zero Standard Criteria was extensive, having started back in 2019 with a scoping phase. The process involved two public consultations, a company road test and establishing a dedicated Net-Zero Expert Advisory Group (EAG).
Four key elements make up a corporate net-zero target according to SBTi. These are:
1. A near-term science-based target (by 2030 latest);
2. A long-term science-based target (by 2050 latest);
3. Mitigation beyond the value chain; and
4. Neutralization of any residual emissions.
Spherics’ Head of Climate Science Duncan Oswald was one individual who contributed to this process, by providing feedback via the public consultation process. In addition to lots of technical details, five key themes emerged from Spherics’ feedback during the consultation process.
Five key feedback themes:
1. Offsetting: A need to clearly differentiate between carbon reduction and offsetting, with prioritisation and preference being given to the former. Furthermore, setting a maximum of 10% emissions reduction through offsetting would inevitably mean that companies will aim for that. Yet if this approach were adopted globally, there would not be enough offsetting capacity to cope with the remaining emissions.
2. Targeting: Further simplification on the explanation around near-term and long-term targets. For example, the target and mitigation pathway methodology ignores the time-dependent nature of carbon budgets, which is critical to achieving any ambition for a cap on global temperature rise.We were also interested in understanding how the standard could/would adapt if it becomes clear that 1.5°C cannot be achieved.
3. Scope 3: Concern that Scope 3 emissions were exempt from the revised 1.5°C ambition, despite, for many companies, Scope 3 including the vast majority of emissions. For example, Scope 3 emissions would not automatically be counted towards the two thirds boundary in near-term SBTs and 95% boundary in long-term SBTs. Only if a company’s Scope 3 emissions were at least 40% of total emissions (scope 1, 2, and 3 emissions), would at least 67% of Scope 3 emissions be covered.
4. Accountability: Concern that the guidance allows for many caveats, get-outs, special considerations and, worst case, cheats. If the aim of the standard is to achieve genuine and meaningful rates of decarbonisation, then a firmer line needs to be taken.
5. Guidance: The accompanying Corporate Manual and Getting Starting Guide, at the time, were difficult to understand and lacked both structure and visuals to make them more engaging.
So, was our feedback taken onboard? Does the standard live up to the hype and offer a clear way forward for corporations to reach net zero? Here’s my review of the first Corporate Net Zero Standard by SBTi.
Review of SBTi’s Corporate Net Zero Standard
Who’s it for?
Corporates with more than 500 employees that wish to commit to setting net-zero targets through the SBTi.
Although not directly intended for SMEs, SMEs could use this document to understand the key elements of a science-based net-zero target and the SBTi’s recommended target-setting process.
Who’s involved?
The SBTi is a global body enabling businesses to set ambitious emissions reductions targets in line with the latest climate science. It is a partnership between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF). It’s also in collaboration with We Mean Business Coalition.
What does it aim to achieve?
The main objective of this standard is to provide a standardised and robust approach for corporates to set net-zero targets that are aligned with climate science.
The Net-Zero Standard gives business leaders confidence that their near-term and long-term targets are aligned with what is needed to contribute to a habitable planet, and it provides clarity on business climate action to a wide range of stakeholders.
What does it do?
The Net-Zero Standard provides guidance, criteria, and recommendations to support corporates in setting net-zero targets through the SBTi.
Through the SBTi, companies can commit to net-zero, which includes setting validated near-term and long-term science-based targets consistent with limiting temperature rise to 1.5°C, to become distinguished as climate leaders and drive forward the global transition to net-zero.
Pro’s
- SBTi states that no net-zero claims can be made, until long-term targets are met; this should reduce greenwashing and drive tangible action.
- Most companies are required to have long-term targets with emission reductions of at least 90-95% by 2050.
- Parent companies must include subsidiaries in their target boundary.
- Huge credit should be given to the team at SBTI for operating such a transparent multi-stakeholder process.
Con’s
- It’s voluntary, so uptake will always be limited.
- Companies can take a variety of approaches to developing targets, with SBTi only ‘recommending’ five steps. This allows for manipulation and divergence.
- It isn’t relevant to all, so its authority and ability to unite all businesses is somewhat watered-down. For example, SMEs(1) and financial institutions(2) have alternative guidance.
- More work could be done to streamline both the standard itself (65 pages!) and the additional resources, to engage and empower businesses further.
How does Spherics plan to integrate with it?
The Net-Zero Standard is all about achieving real decarbonisation, and demonstrating it in a robust and reliable way. To achieve this, companies need an accurate picture of their carbon footprint, a measure of the quality of the data and calculations used to generate it, and a clear path to achieve decarbonisation goals in the limited time remaining.
Spherics does all of this, starting with automated analysis of accounting data that is already collected. Our deep supply chain network methodology generates a precise carbon footprint in real time, which is refined every time any subscriber interacts with the system. Like SBTi, Spherics is based on the GHG Protocol, and reports automatically in the recognisable format used by both. It also goes beyond these existing frameworks by providing detailed information on the relative importance and underlying data quality for each reporting category and scope, so businesses and their customers can see not only what their carbon footprint is, but also how reliable it is.
SBTi’s reluctance to tackle Scope 3 emissions appears to be based on how complex and difficult this process is. However, with automated platforms such as Spherics, this is no longer the case, so any justification there may have been for excluding these emissions no longer applies.
Final thoughts
With a growing number of businesses committing to reach net-zero emissions, it is abundantly clear that not all net-zero targets are equal. Whilst the SBTi Net-Zero Standard may not go far enough to draw a clear line between the good, the bad and the downright ugly net zero targets out there, it has made huge strides for standardising the approach corporations should take.
That’s why I believe it’s crucial SBTi and others continue to create a growing movement around the standard. At least until the UK Government introduces enforceable regulations, alongside clear parameters and guidance, to force all businesses to take action. Organisations like B Lab UK and the B Corp Certification have successfully done this, where regulation has failed.
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