What is net zero for businesses?

Net zero, a concept first popularised by the Paris Agreement in 2015, is now front and centre in the minds of policymakers, investors and business leaders.

Net zero means achieving a global balance between the amount of anthropogenic (human-caused) greenhouse gas emissions produced, and the amount removed from the atmosphere. This is central to preventing the worst effects of climate breakdown, limiting global temperature rise to well below 2°C, and preferably to 1.5°C, above pre-industrial levels, as outlined in the Paris Agreement.

The Intergovernmental Panel on Climate Change (IPCC) developed a number of decarbonisation scenarios as detailed in its Special Report on Global Warming of 1.5°C. To achieve net zero by 2050, a substantial reduction in emissions across all sectors is required - including energy, transportation, industry and agriculture, as well as investment in carbon removal technologies and natural solutions that will enable the neutralisation of residual emissions.

The significant global actions required are:

• 45% reduction in global CO2 emissions by 2030 compared to 2010 levels and net zero by 2050.
• 70-85% of electricity is supplied by renewable sources by 2050.
• Halt deforestation by 2025.
• 35% reduction in emissions from methane by 2050 compared to 2010.
• 65% to 90% reduction in CO2 from industry by 2050 compared to 2010.

What are corporate science-based net-zero targets?

A corporate net-zero target is ‘science-based’ if it is in line with the latest climate science and the effort to limit global heating to 1.5°C. Companies can have these targets validated by the Science Based Targets initiative (SBTi), which is a collaboration between the Carbon Disclosure Project (CDP), the United Nations Global Compact, World Resources Institute (WRI), and the World Wide Fund for Nature (WWF).

The SBTi provides sector-specific target guidance that accounts for the characteristics and emissions profiles of specific industries.

4 reasons why corporate science-based net-zero targets matter:

1. Climate Leadership: Companies with science-based net-zero targets demonstrate commitment to sustainable business practice. This enhances brand reputation, increases awareness among the ever-increasing environmentally conscious consumers and values-focused employees, and boosts investor confidence.
2. Regulatory Preparedness: Stricter climate regulations are being implemented worldwide. Companies with existing science-based targets will be better positioned to comply with new and upcoming regulations.
3. Risk Mitigation: The climate crisis poses significant risks to businesses from supply chain disruptions and resource scarcity to increased operational costs. Science-based targets help focus companies on decarbonisation activities that inherently mitigate these risks.
4. Competitive Advantage: Companies engaged in decarbonisation activities earlier, can gain competitive advantage through innovation and become leaders in the low-carbon economy.
   

By having a net-zero target that is aligned with the IPCC’s 1.5C pathways, companies are ensuring their reduction ambition is in line with preventing the worst impacts of global heating.

Why validate targets with the SBTi

Independent validation of targets gives confidence that emissions targets are aligned with current science, and will continue to adapt as needed if climate understanding changes. This brings credibility to companies' transition plans, as recommended in the Transition Plan Taskforce's latest guidance.

In a UK Climate Change Committee study of senior business leaders in the UK, over half said committing to the Science Based Targets Initiative gave them a competitive advantage.

Not all organisations are able to submit targets to the SBTi – educational institutions, charities and other non-profits may not be able to apply for verification depending on their size. Regardless of size or sector, setting carbon reduction targets in line with the latest climate science is always best practice.

Looking for support? Get in touch

We have over 15 years of experience in supporting businesses on their net zero journeys, as well as setting science-based targets. We've worked with SMEs through to multinationals such as Kingfisher group (B&Q. Screwfix, Tradepoint).

As a charity, we’re different – we reinvest our profits to create real change.

Get in touch below or book an intro call to find out how our purpose-led consultancy can support you.