The SBTi Net-Zero Standard is a framework that helps companies set science based targets for achieving net-zero greenhouse gas emissions by 2050 or sooner.
The process of setting corporate net-zero targets using the SBTi standard is similar to the regular process of setting a SBT, with some additional steps:
- Identify your company’s reduction potential in line with the 1.5°C pathway
- Assess and quantifying your company’s remaining emissions
- Set a target for achieving net-zero emissions, including a plan for managing any remaining emissions through the use of carbon offsetting or removal.
What are the business benefits of adopting science based targets?
Driving innovation Science based targets provide companies with a clear and ambitious goal to work towards, and a roadmap for decarbonization.
This can help your company to drive innovation, increase efficiency, and identify new opportunities for growth.
Managing climate-related risk
SBTs can also help you to manage the risks associated with climate change, such as physical risks to assets, transition risks, and reputational risks.
Communications and reputation
Worldwide, consumers are becoming increasingly climate-conscious which is why companies are very keen to demonstrate their sustainability credentials. Setting a science-based target shows a dedication to taking genuine climate action.
As many as 79% of corporate leaders surveyed by STBi found a strengthened brand reputation to be one of the most significant business benefits for their company from committing to the Science Based Targets initiative.
Attracting new investment
Companies that set and achieve SBTs can also improve their access to capital by demonstrating to investors that they are well-positioned to manage the risks and opportunities associated with climate change.
Cost savings
Companies that reduce greenhouse gas emissions in line with the latest climate science, can also identify opportunities to reduce energy consumption and eliminate waste in their operations. This in turn leads to savings on materials, water, and other resources.
What are the key challenges?
Data collection One of the biggest challenges of adopting SBTs is collecting and reporting accurate data. This can be a time-consuming and complex process, as you need to navigate different reporting standards and methodologies.
Some business and industry leaders may lack the expertise or resources to fully understand the latest climate science and how it applies to their operations and value chain.
Planning of reduction activities
Another challenge is determining your company’s reduction potential which can be difficult, as you might not have a clear understanding of the emissions across your full value chain, meaning that you may struggle to identify areas where reductions can be made.
Resource issues
Limited internal resources and capabilities can also be a challenge. You might lack the resources or expertise needed to develop and implement strategies to reduce emissions and achieve targets.
Risk
Uncertainty and risk are also significant challenges. Companies may be uncertain about the future and the potential risks and opportunities associated with different decarbonization pathways.
Balancing competing priorities
Balancing competing priorities can also be a challenge. You might struggle to balance the need to reduce emissions with other business priorities such as growth, profitability, and competitiveness.
Stakeholder engagement
Finally, limited engagement from stakeholders can stand in the way of implementing SBTs. You might find it difficult to engage and communicate with investors, customers, and employees on the targets that you've set and the progress that you're making towards them.
So how do you get started?
A dedicated carbon management platform can support you with all of the above challenges, walking you through every step of the process.
Looking to get started with science based target setting? VEEP can help you identify your emissions hotspots and map a clearly defined pathway to decarbonization.
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