The Science Based Targets initiative (SBTi) has released four technical documents as part of the early phase of revising its Corporate Net-Zero Standard. Announced in May 2024, the revision aims to ensure the Standard aligns with current scientific insights and best practices, particularly addressing challenges related to scope 3 emissions.
Scope 3 emissions, which account for 75% of a company’s footprint, are a major challenge in corporate decarbonisation but also present significant opportunities. To improve the approach to scope 3 emissions and enhance the impact of its standard, the SBTi is responding to feedback from businesses with validated targets.
As an early step in the process of reviewing the Corporate Net-Zero Standard, in line with the regular review cycle, the SBTi released four documents.
The Scope 3 Discussion Paper outlines potential changes to scope 3 target setting, presenting initial principles and concepts without proposing specific requirements. The Evidence on Environmental Attribute Certificates includes all evidence collected from an open call on the effectiveness of Environmental Attribute Certificates, not yet assessed by the SBTi.
The Synthesis report of evidence on the effectiveness of Environmental Attribute Certificates in corporate climate targets – Part 1: Carbon credits is a report presenting the SBTi’s synthesis of the evidence submitted through the call for evidence on the effectiveness of carbon credits in corporate climate targets. This is the first of the three distinct reports that will be published as outlined in the Terms of Reference; the reports on the other EAC instruments will be published at a later stage.
The fourth and final resource is the Findings of independent systematic review on the effectiveness of carbon credits in corporate climate targets which is a statement on the findings of the assessment conducted by an independent third party on peer-reviewed academic literature on the effectiveness of carbon credits when used as a substitute for direct abatement. The statement summarizes the process followed, findings and limitations of this research exercise.
The scope 3 discussion paper explores scenarios for using environmental attribute certificates, including carbon credits, within science-based target-setting contexts. It emphasises that credits should not replace direct emission reductions but may complement efforts to demonstrate decarbonization or cover emissions beyond current target boundaries.
A draft of the revised Corporate Net-Zero Standard will be released for public consultation by the end of Q4 2024. The SBTi has invited feedback from civil society, businesses, and governments, and will publish a summary of this feedback to inform the final development of the Standard.
Sue Jenny Ehr, Interim CEO, SBTi said, “Today’s announcement marks a key step in the revision process for the Corporate Net-Zero Standard. Over the last decade, the SBTi has validated the targets of over 5,000 companies with another 3,000 companies having committed to submit targets for SBTi validation. Targets are the first step to decarbonization and it is important that the SBTi conducts a comprehensive process to revise the Standard to help companies take the lead on climate action and drive down emissions.”
Alberto Carrillo Pineda, Chief Technical Officer, SBTi said, “The outputs released today are a critical step in understanding how the SBTi can develop a more sophisticated approach to scope 3 to help more businesses set targets. The SBTi believes that direct decarbonization must remain the priority for corporate climate action and looks forward to the extensive public consultation on the draft Corporate Net-Zero Standard.”