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2.5. Net zero

A guide to global reduction ambitions

Key Takeaways 2.5

In a nutshell

  • Net zero is massively complex but there are frameworks in place for getting there.

  • Think about which framework might work for your business as you start setting target goals.

What is net zero

Net zero is a state in which the activities of a business (or country) result in no net impact on climate from greenhouse gas emissions. This can be achieved by reducing emissions to zero or counterbalancing their effect with carbon removal elsewhere in the business.

A lot of people are now talking about net zero and how to get there. It’s a complex area for businesses but, massively simplified, what this means is you need to:

  1. Establish baseline carbon emissions now.
  2. Reduce them by at least 50% by 2030.
  3. Reach net zero emissions (or at least reduce them by 90%) before 2050.

SBTi's net zero standard

The most robust framework for businesses wanting to publicly show their commitment to net zero is the Science Based Targets initiative’s (SBTi) Net Zero Standard (which was launched in October 2021).

SBTi’s net zero standard requires an organisation to consider greenhouse gas emissions throughout its operations, covering each of the three scopes 1, 2 + 3.  At the time of publication, the SBTi’s certification criteria for net zero goes even further and requires the following commitments:

  • Near-term: 95% Scope 1+2 reduction / 67% Scope 3 reduction by 2030.
  • Long-term: 95% Scope 1+2 reduction / 90% Scope 3 reduction by 2050.

(Note: carbon offsetting can only be used to neutralise unavoidable residual emissions. You can read more about offsetting negative impact in section 2.12.

Although these targets may seem somewhat daunting, more and more companies are pledging to achieve them. By the end of 2023 over 4,000 companies and financial institutions were leading the way to a net zero economy by setting these emissions reduction targets and having them validated by the SBTi.

Other decarbonising terms and frameworks

There are other decarbonising frameworks. One example is carbon neutrality, which is aligned with British Standards Institution and PAS 2060.

Carbon neutrality differs from net zero in several ways. 

  • It does not require progress to be made against any specific ambition (such as the 1.5°C pathway). 
  • It does not require Scope 3 emissions to be included (though it encourages this). 
  • And although the importance of carbon reduction plans is emphasised, a company can jump straight to neutralising emissions through purchasing high quality offsets and still claim carbon neutrality. 

This last point is an approach increasingly criticised by environmentalists and unless done ethically and with transparency can lead to accusations of greenwashing.

For more advice on net zero visit Science Based Target’s own website on the Corporate Net-Zero Standard. 

For more advice on carbon neutrality visit BSI’s page on PAS 2060 Carbon Neutrality.