Corporate Net-Zero Standard V2.0
Science Based Target Initiative (SBTi) releases corporate net-zero standard V2.0, aimed at providing a tool to help companies achieve net zero transition.
SBTi believes that after setting a net zero target, companies often face challenges in supply chain, technology, investment, and other aspects. How to achieve net zero commitment is a key factor in corporate net-zero standard.
Related Post: SBTi Releases Draft of Corporate Net Zero Standard
Introduction to Corporate Net-Zero Standard V2.0
The corporate net-zero standard V2.0 can be divided into the following parts:
Net Zero Governance
Corporates need to obtain approval from the board of directors to set and submit net zero targets and ensure that the board of directors supervises the implementation of net zero targets. Corporates need to disclose the governance structure responsible for supervising and implementing goals and develop transition plans to demonstrate how to achieve the goals. The transition plan needs to include contents verified by the SBTi, carbon emission scope, and specific actions expected to achieve the goals. All corporates are required to review and update their net zero plan at least once every five years.
Net Zero Target Evaluation Basis
Corporates need to determine carbon emission boundaries based on applicable greenhouse gas accounting system standards, select the latest year with comprehensive data available as the baseline year for net zero targets, and set new baseline years for each subsequent target cycle. Corporates need to calculate and report an emission inventory that is consistent with the greenhouse gas accounting system standards, covering all specified greenhouse gases. Corporates also need to identify and quantify emission intensive activities in their value chain and disclose them separately.
Net Zero Target Setting
All corporates must set goals consistent with the scientific net zero path for operational and value chain emissions, with short-term goals covering five years and long-term goals no later than 2050. Corporates need to use indicators, methods, and pathways recognized by the SBTi:
- Scope 1 Objective: Corporates have three optional paths, namely absolute emission reduction (linearly decreasing from the base year to the 2050 target), emission intensity reduction (following specific sector paths), and asset transition (setting targets through asset decarbonization plans).
- Scope 2 Objective: Corporates have two optional paths, namely the consistent goal of low-carbon electricity (increasing the proportion of low-carbon electricity usage) and the absolute emission reduction goal.
- Scope 3 Objective: Corporates have three optional paths, namely overall absolute emission reduction target, overall customer consensus target, and specific target (adopting specific methods for carbon intensive activities).
Net Zero Target Implementation
Corporates can adopt a hierarchical structure to determine the priority order of net zero actions:
- Activity level: Directly reducing carbon emissions within the operation and value chain of the enterprise.
- System level: When carbon emissions come from the system (such as power networks, logistics networks), companies can reduce emissions within the system.
- Industry level: When carbon emissions are limited by technology and infrastructure, companies can reduce emissions at the industry level.
Net Zero Target Disclosure
Corporates need to disclose their net zero target progress annually, including carbon emission data, target progress, net zero actions, and obstacles faced in achieving the target. After each target cycle, the enterprise needs to conduct a comprehensive evaluation and consider introducing third-party verification.
Reference:
SBTi Releases Corporate Net-Zero Standard V2.0 to Accelerate Corporate Climate Action
