As the world continues to set new dangerous global temperature highs and lows, corporations must take action to mitigate climate change. When it comes to measuring (and limiting) carbon emissions, the goals business leaders set are their north star for short-, medium- and long-term action.. That’s why it’s important to understand these goal-setting options, as they impact how an organization collectively measures their carbon emissions and whether or not they can rely on offsets to compensate for those projections.
But which goal leads to the best decision making—both for corporate goals and for the environment at large? Is a science-based target best, or should enterprises commit to net zero targets instead, or reach the furthest, towards a science-based net zero target? There are pros and cons to all options that impact how enterprises move forward.
In this post, we’ll provide practical definitions for these types of carbon reduction targets and shed light on which measurement option is most fitting for a specific business or a particular point in time.
What is Net Zero?
A net-zero target is one that establishes an organization’s “aim to become carbon neutral by a certain date.”
Even with this definition in mind, it’s important to note that a net zero target is not synonymous with “zero total carbon.” This is because carbon energy offsets can be used to reach the ideal zero emissions number.
Net-zero target end dates are also not currently mandated to be based on science or climate research. Conversely, the goals set by SBTi typically aim for mid-century temperature limitation and reduction. There is no requirement on pacing of net-zero-focused reduction, and there is no universally agreed boundary for net zero targets. As a result, many companies have invested time and resources into limiting or offsetting Scope 1 and 2 emissions but have not done the same thing for upstream emissions.
In contrast to science-based targets, which we’ll discuss next, net-zero targets are more fluid in their interpretation.
What is a Science-Based Target?
Science-based targets provide clearly-defined pathways for companies and financial institutions to reduce greenhouse gas (GHG) emissions based on those organizations’ respective impacts, with the targets validated by the Science Based Target initiative (SBTi). The SBTi is an industry and NGO alliance that champions science-based target setting and officially approves these targets, a partnership between Carbon Disclosure Project, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF, formerly World Wildlife Fund). Per the SBTi’s website, “over 2,000 organizations worldwide are leading the transition to a net-zero economy by setting emissions reduction targets grounded in climate science through the SBTi.”
According the SBTi’s guidance, science-based targets include the following elements:
- Commitments: organizations’ publicly-declared intention to develop targets and submit these for validation within 24 months;
- Near-term targets: indicate how organizations will reduce their emissions over the next 5-10 years (i.e., by 2030), and a prerequisite for companies wishing to set net-zero targets;
- Long-term targets: indicate the degree of emission reductions organizations need to reach in order to achieve net-zero according to the SBTi’s Corporate Net-Zero Standard criteria. These targets must be achieved no later than 2050 (or 2040 for the power sector). Long-term targets are developed by companies wishing to set net-zero targets under the SBTi’s Corporate Net-Zero Standard;
- Net-zero targets: encompass both near and long-term targets. Companies with net-zero targets have both near- and long-term targets validated by the SBTi;
- Temperature alignment: the degree of global temperature increase compared to preindustrial levels targets are aligned to, in line with the goals of the Paris Agreement – only provided for most companies’ Scope 1 and 2 targets.
In general, science-based targets are focused on Scope 1 and 2 emissions, and Scope 3 emissions if they represent greater than 40% of the company’s overall footprint. For companies using science-based targets (SBTs), carbon offsets cannot be used to reach a predefined or agreed-upon target.
Most importantly, science-based targets are backed by current scientific knowledge and active, up-to-date climate science. They are “National Determined Contributions” for energy use and carbon output at a corporate level. Science-based targets exist within the framework of keeping the global temperature increase as close to 1.5 degrees Celsius as possible within the coming decades.
Navigating the Main Differences
One of the biggest differences between net-zero targets and science-based targets is that the net-zero approach has historically allowed for a significant use of offsets in meeting targets. This means that when greenhouse gasses go into the atmosphere, they are balanced or equaled out by some type of removal or abatement – including through use of offsets, the carbon reduction/removal value of which has been widely questioned.
Science-based targets are often referred to as “Paris-aligned,” because they correspond to the global temperature limits set by the Paris Agreement—”limiting global warming to well-below 2°C above pre-industrial levels and pursuing efforts to limit warming to 1.5°C, with no or low overshoot.”
In late 2021, the SBTi introduced science-based net zero targets, which “require long-term deep decarbonization targets of 90-95% across all scopes before 2050.” Where the science-based net zero differs from more broadly adopted net zero targets is that companies can only use a very limited amount of high-quality carbon removals as offsets, likely no more than 5-10% of the total emissions reductions.
The SBTi Corporate Net-Zero Standard basically states that companies must have both near-term and long-term carbon reduction goals. In this regard, the established Corporate Net-Zero Standard raises the bar for many companies, requiring them to set a near-term target in line with 1.5 degrees warming, and then a long-term target aiming for net zero.
What Do the Experts Say?
Energy experts and climate scientists know and strongly believe in the urgency of deliberate temperature reduction methods. Because science-based targets bring the level of action needed globally down to the corporate level, it’s easier and yet more rigorous to apply current climate science to corporate policies though SBTs.
There are, however, some limitations to using science-based targets for emissions goals. For one, it’s difficult to assume that every responsible party will have an in-depth understanding of climate science as it relates to global temperature increases. Thus, setting appropriate targets often requires bringing in some level of in-house expertise or outside consulting.
Moreover, science-based targets operate on the assumption that every single company is active and participating in the same emissions reduction efforts. This level of commitment is tough to mandate or realistically maintain sector-wide or economy-wide.
Why are these types of goals important?
Both science-based and net-zero targets are important for making the right moves to avoid a global tipping point. As global temperatures increase at an alarming rate, many experts already fear that some of the damage from climate change is irreversible. Senior Manager at the Ramboll Group Niki Bey summarizes it this way:
“Ultimately, the level of ambition of individual organizations depends on many factors, such as strategic drivers, investor demands, timeline, availability and cost of technologies, transition risks, available resources, and access to financing.Independently from the type of commitment you choose, it is crucial to communicate a clear message to your clients and stakeholders.”
According to a recent report from NewClimate Initiative, only 8% of companies have set interim targets for their longer-range net zero carbon goals, meaning able to qualify for setting a science-based net zero target. Interim targets play an important role in establishing accountability and transparency.
From this statistic, we can infer that the SBTi is pushing companies that have only set a near-term science-based target or a long-range net zero target (but not both) to set the other goal, and therefore align to the science-based net zero standard.
Unfortunately, it’s difficult to say that one option or another is necessarily best for all companies at all times and in different contexts. Corporate emissions situations can be unique (including the distribution of Scope 1, 2, and 3 emissions), and reaching goals often mandates a flexible and proactive response to scientific recommendations.
But in crafting the science-based net zero standard, the SBTi is encouraging companies to focus on the urgency of the present by making sure they are creating significant near-term reductions by 2030. In the same vein, it promotes thinking about the future, given that emissions cuts eventually need to go as high as 90%. These recommendations pave the way for planning and innovating so that everyone can reach reductions goals no later than the year 2040 or 2050.
Carbon Accountability Software Contributes to Better Decision-Making Processes
Carbon accountability software like Cleartrace enables proactive carbon management and automates data collection and aggregation. With better emissions data, corporations can form more astute decisions when it comes to measurement and reporting.
Additionally, carbon accountability software provides a clear picture on where organizations are in their current efforts to meet specific goals. Decarbonization can easily become a competitive advantage, but corporations first have to be able to prove their progress.
Whether you set science-based, net zero or science-based net zero goals, real decarbonization means having access to verifiable metrics.
Take Control of Your Corporate Responsibility
As more companies make energy commitments, it’s important that those businesses make informed decisions—not simply ones that are based on external pressure or inaccurate recommendations.
Corporations must make informed decisions about the ways they choose to measure emissions standards to be part of a worldwide effort to keep temperatures below the global tipping point.
Although terminology contributes to some confusion about the current science (and which tactics are best), companies can—and must—choose to stay informed. At Cleartrace, we’re here to provide clarity and transparency into the climate topics that matter most. At the end of the day, it’s a collective effort to ensure that the planet is protected for good.
