The Science Based Targets initiative (SBTi) just rolled out a fresh batch of updates for its Net Zero Standard, and if you’re a corporate sustainability leader, this one’s for you. Let’s break it down:
Key Changes at a Glance
1. Target Requirements Now Vary by Company Size and Geography
SBTi is getting more nuanced. Instead of a one-size-fits-all approach, the updated framework tailors requirements based on company size and location. Only Large and medium-sized companies in higher-income regions must adhere to all criteria of the new net zero standard.
This shift acknowledges that companies in different geographies have varying resources and challenges. It’s a smart move that ensures ambitious climate action remains achievable, rather than a compliance nightmare.
2. Strategic Scope 3 Targeting: Focusing on Most Relevant Emissions in Value Chain
Scope 3 emissions, as we all experience, are notoriously tricky to address. Recognizing this, the updated framework puts more emphasis on non-emission metrics and targets. Instead of demanding targets for all emissions, companies can now:
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Track the share of procurement directed toward suppliers aligned with climate goals.
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Measure the percentage of revenue from net-zero-aligned products and services.
It’s a shift from focusing purely on emissions numbers to prioritizing climate-positive business decisions—a welcome change for companies struggling with supply chain data.
3. Enhanced Methods for Tackling Indirect Emissions (Scope 2 & 3)
Companies now have more leeway in substantiating progress against indirect emissions. Here’s how:
- Activity Pool-Level Emissions Accounting: Companies facing challenges in tracing emissions from specific sources within their value chain can leverage an "activity pool" approach. This methodology enables them to use aggregated emissions data and climate interventions at a broader level, such as supply sheds, to substantiate progress.
- Indirect Mitigation as a Recognized Mechanism: In cases where establishing an activity pool is unfeasible, or where persistent barriers limit emissions traceability, companies can leverage indirect mitigation measures. This includes the procurement of sustainable aviation fuel under a book-and-claim system to achieve compliance with jet-fuel-related emissions targets.
- Quality and Compliance Considerations: Indirect mitigation differs from beyond-value-chain mitigation, as it remains functionally connected to a company’s operations, even if no direct physical link exists. The SBTi draft standard anticipates further refinement of quality criteria to ensure the credibility of these measures. The consultation process will be instrumental in shaping these guidelines.
The key takeaway? The update acknowledges real-world limitations while ensuring companies still push toward meaningful reductions.
4. Expanding Climate Action: Two Pathways Beyond the Corporate Value Chain
For companies that want to go above and beyond, SBTi introduces two potential pathways:
Option 1: Removal Targets for Scope 1 Emissions:
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These removal targets are established independently from abatement goals and indicate the necessary volume of removals required to address projected residual emissions. Instead of only neutralizing residual emissions in the net zero target year, companies will have to start neutralizing projected residual emissions through carbon removals already now..
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The required volume of removals will progressively increase over time, aligning with carbon dioxide removal (CDR) growth rates as projected in climate scenarios. By the net-zero target year, 100% of a company’s residual emissions must be neutralized by an equivalent volume of carbon removals.
Eligible Removal Solutions: Two primary options are outlined for achieving removal targets:
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Minimum durability alignment: The durability of carbon removals must correspond with the atmospheric lifetime of the specific greenhouse gas emitted, ensuring that removals effectively neutralize long-term emissions impact.
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Progressive transition to durable removals: A phased approach encourages companies to shift from temporary to more durable carbon removal solutions between 2030 and 2050. This transition should align with the observed deployment rate of long-term carbon removal technologies in climate mitigation scenarios. goodcarbon would encourage this option, as long-term durable carbon removal is not currently available at the required scale.
goodcarbon Expert Insight: Scope 1 emissions often constitute only a small portion of a company’s total emissions. If residual Scope 1 emissions account for 10% of base-year emissions, and a phased removal target requires addressing 30% of these by 2030, the company would need removals for just 3% of total emissions. This limited scale means implementation is relatively straightforward for many companies, making it an accessible step in their broader climate strategy.
Option 2: Flexible Net Emissions Reduction Targets for Scope 1
Instead of requiring additional removals, this pathway allows:
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Companies to have the flexibility to manage residual emissions through additional reductions beyond science-based pathways, removals, or a combination of both approaches.
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Removals under this framework to be limited to the small fraction of emissions projected to persist at the net-zero target year—typically less than 10% of base-year emissions—ensuring that companies prioritize emissions reductions as the primary strategy.
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Companies opt in to addressing a larger share of residual emissions through removals, but without mandatory requirements. This phased approach allows businesses to scale removals in line with evolving technology and best practices while maintaining flexibility.
This provides companies with greater flexibility in balancing removals with deep decarbonization efforts.
5. Sector-Specific Scope 3 Removal Targets? It’s Up for Discussion
While the update doesn’t mandate scope 3 removal targets across the board, SBTi is considering whether certain industries should. This would depend on sector-specific emissions challenges and potential removal solutions. Expect more clarity on this front as industry consultations continue.
What This Means for You
So, what’s the bottom line?
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More flexibility where it’s needed: Companies struggling with scope 3 data limitations can now focus on meaningful, practical indicators.
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A clear path for indirect mitigation: The framework acknowledges real-world supply chain complexities while maintaining climate integrity.
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Options to go beyond net zero: Ambitious companies can lead the charge with structured removal targets or deeper reductions.
The SBTi update doesn’t lower the bar—it just makes the rules of the game clearer and more achievable. And for sustainability leaders like you, that’s a win.
What’s Next?
The consultation process is still ongoing, so there’s room to shape these standards further. If your company has insights, now’s the time to weigh in.
Need help navigating the changes? Let’s talk. Sustainability is a journey, and we’re in this together.
