Climate-certification organisation Science-Based Targets Initiative (SBTi) has set out changes to its net-zero requirements for business, opening its proposals for public consultation.
The SBTi’s Corporate Net-Zero Standard provides a framework for companies to set their net-zero emissions targets, ensuring they align with the objective of limiting temperature rise to 1.5°C.
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Last year, the SBTi was embroiled in a row over plans to review its policy on allowing accredited organisations to use offsets in their efforts to curb emissions. Employees then called for the withdrawal of the announcement and the resignation of the CEO Luiz Fernando do Amaral and supporting board members.
Three months after the row, SBTi announced the stepping down of its CEO Amaral citing “personal reasons”.
The draft plans announced yesterday (18 March) and put out for consultation set out “options for consideration to address unabated and residual emissions”, the SBTi said.
“This includes looking at formally recognising companies, which are investing in beyond value chain mitigation and the introduction of interim carbon removal targets for the neutralisation of residual emissions.”
The organisation told Just Food: “The SBTi’s position remains unchanged – fast and deep emissions reduction must be front and centre. However, the draft standard considers opportunities to scale carbon removals and mobilise climate finance above and beyond the requirement for the direct decarbonisation to meet emissions reduction targets.”
Under the SBTi’s proposals, there would be “more tailored requirements” for companies based on their size and geography.
The organisation plans to introduce two “categories” of companies. Category A businesses – which the SBTi defines as “large and medium-sized companies operating in higher-income geographies” – are required to follow all criteria.
Category B companies – SMEs operating in lower-income geographies – are offered increased flexibility by making some criteria optional.
“This categorisation intends to drive climate action across all types of companies while acknowledging differences in size, resources and operating context.”
The proposals also include a measure for companies to set separate targets for Scope 1 and Scope 2 emissions.
The plans include a measure for businesses to commit to move to “low-carbon electricity” by 2040 at the latest.
The SBTi has also put forward plans to give companies “increased flexibility” to tackle Scope 3 emissions, which often account for the bulk of their footprint.
The draft standard proposes options for businesses to set targets for green procurement and revenue generation, instead of setting an emissions reduction target.
“In focusing on direct suppliers and/or those in emissions-intensive sectors to align with net-zero, this proposal intends to focus action in the most emission-intensive activities and those where companies have the highest influence,” the SBTi said.
SBTi chair Francesco Starace said: “The draft standard addresses complex, emerging issues and lays the foundation to enable more companies to move further and faster towards net-zero.
“Working hand-in-hand with stakeholders across the ecosystem to seek and consider a diverse range of views, we aim to produce a standard that is both rigorous and practical, and works for businesses and the planet.”
The new draft introduces a requirement for companies to assess and communicate progress against their targets. The public consultation will run from 18 March to 1 June.
WWF director general Kirsten Schuijt said the draft proposal has elements that could aid in “accelerating climate action and meeting targets more feasible for many companies, particularly those who are struggling to cut emissions from distant parts of their value chains”.
Schuijt added: “Overall, it is welcome to see that the draft standard maintains its focus on climate action within company value chains, where companies can have the most significant impact in tackling climate change, while at the same time recognising the critical role of corporate finance for climate and nature action in places beyond their value chains.”
