Science Based Targets Initiative (SBTi) - Net-Zero Standard

Per SBTi Net-Zero: BVCM + no offsetting. Requirements include (a) Beyond Value Chain Mitigation investments addressing remaining global gap + (b) BVCM Investment in nature-based + technology-based solutions + (c) BVCM Reporting + (d) No Offsetting of Targets - offsets cannot count toward science-based targets + (e) maintain documentation.

• SBTi evidence for SBTONE-5

• Scope 3 + Net-Zero + BVCM partial

Companies are encouraged to invest in beyond value chain mitigation measures such as carbon credits or direct removal.

• BVCM investment policy
• annual investment records
• project selection criteria
• outcome reports

• no BVCM commitment
• investments not aligned with science
• weak quality criteria

Per SBTi Corporate + Net-Zero Standards: boundary. Requirements include (a) Organizational Boundary determination + (b) operational control vs equity share approaches + (c) consolidation per GHG Protocol + (d) maintain documentation.

• SBTi evidence for SBTONE-1

• Scope 3 + Net-Zero + BVCM partial

Companies must define organizational boundaries consistent with GHG Protocol Corporate Standard and financial reporting.

• consolidation approach documentation
• boundary definition
• entity inventory
• exclusion rationale

• boundary not aligned with financial reporting
• entities omitted
• no documentation

Targets must cover all relevant emissions of the seven GHGs required by the GHG Protocol Corporate Standard.

• gas-by-gas inventory
• coverage documentation
• exclusion rationale
• GWP source records

• non-CO2 gases omitted
• no documentation
• outdated GWP

Targets must cover company-wide Scope 1 and Scope 2 emissions as defined by the GHG Protocol.

• scope 1 and 2 inventory
• 95 percent coverage analysis
• exclusion documentation
• data quality records

• below 95 percent coverage
• exclusions not justified
• weak data quality

Companies must complete a Scope 3 screening covering all relevant upstream and downstream emission categories.

• scope 3 screening analysis
• category significance documentation
• screening methodology
• materiality conclusion

• screening not performed
• weak methodology
• no documentation

Companies with Scope 3 emissions 40% or more of total must set Scope 3 targets covering at least two-thirds of emissions.

• scope 3 share analysis
• 40 percent threshold check
• target coverage records
• category target documentation

• scope 3 share underestimated
• below threshold coverage
• no documentation

Per SBTi Net-Zero Standard: long-term + net-zero. Requirements include (a) Long-Term Target Year aligned with 1.5C net-zero pathway (typically 2050 or earlier) + (b) Long-Term Emission Reductions of 90-95% across all scopes + (c) Net-Zero Commitment and Boundary covering scope 1+2+3 + (d) Residual Emission Neutralization with permanent removals.

• SBTi evidence for SBTONE-3

• Scope 3 + Net-Zero + BVCM partial

Long-term targets must be set for no later than 2050 and aligned with net-zero pathways.

• long-term target year statement
• alignment with net-zero
• rationale documentation
• interim milestones

• target year too late
• no interim milestones
• no rationale

Companies must reduce emissions by at least 90% across Scope 1, 2, and 3 compared to the base year.

• long-term reduction calculation
• pathway documentation
• scope coverage records
• SBTi approval

• reduction below 90 percent
• scope gaps
• no validation

Companies must neutralize residual emissions at the net-zero target year through permanent carbon removals.

• residual emissions estimate
• neutralization strategy
• removals plan
• verification framework

• high residual share
• no removals plan
• no permanence criteria

Per SBTi: near-term targets. Requirements include (a) science-based reductions consistent with 1.5C pathway + (b) Scope 1 + 2 absolute or intensity reductions + (c) Scope 3 ambitious targets where significant + (d) base year selection + recalculation policy.

• SBTi evidence for SBTONE-2

• Scope 3 + Net-Zero + BVCM partial

Near-term targets must cover a minimum of 5 years and a maximum of 10 years from the submission date.

• target year statement
• timeframe analysis
• interim checkpoints
• SBTi confirmation

• outside 5-10 year window
• no checkpoints
• weak rationale

Scope 1 and 2 near-term targets must be consistent with a minimum 1.5 degrees C trajectory.

• 1.5C pathway documentation
• annual reduction rate calculation
• ambition statement
• validation letter

• below 1.5C alignment
• no pathway documentation
• no validation

Companies may set absolute or intensity-based emission reduction targets aligned with approved pathways.

• approach selection rationale
• methodology documentation
• calculation records
• SBTi approval

• intensity without absolute backstop
• weak rationale
• no validation

The base year shall be no earlier than 2015 and must be representative of the company's typical emission profile.

• base year inventory
• data quality assessment
• recalculation triggers
• Documentation

• base year too old
• weak data quality
• no recalculation policy

Per SBTi: reporting + verification + recalculation. Requirements include (a) annual disclosure of emissions + progress + (b) Target Recalculation in case of structural changes + (c) independent verification + (d) align with TCFD + IFRS S2 + (e) integrate with broader sustainability reporting.

• SBTi evidence for SBTONE-6

• Scope 3 + Net-Zero + BVCM partial

Companies must publicly disclose company-wide GHG emissions inventory annually.

• annual GHG inventory
• third-party assurance reports
• scope-by-scope breakdown
• public disclosure

• no annual disclosure
• no assurance
• scope gaps

Companies must report progress against targets annually through CDP or equivalent disclosure platform.

• annual progress report
• trajectory chart
• narrative on actions
• off-track explanations

• no annual report
• no trajectory analysis
• missing narrative

Companies must separately report any BVCM actions and not conflate them with value chain emission reductions.

• BVCM annual report
• project disclosure register
• third-party verification
• narrative reporting

• no BVCM disclosure
• vague project descriptions
• no verification

Per SBTi: Scope 3 + value chain. Requirements include (a) Scope 3 boundary including all material categories + (b) Scope 3 targets where significant + (c) supplier engagement + (d) value chain decarbonisation strategy + (e) maintain documentation.

• SBTi evidence for SBTONE-4

• Scope 3 + Net-Zero + BVCM partial

Targets must be recalculated if significant changes (e.g., acquisitions, divestitures) affect emissions by 5% or more.

• recalculation policy
• trigger documentation
• recalculation records
• stakeholder communication

• no trigger monitoring
• stale base year
• weak documentation

Targets must be updated at minimum every five years to reflect latest climate science.

• target validity documentation
• renewal schedule
• review records
• ratification correspondence

• expired targets
• no renewal process
• no review

Carbon credits cannot be counted toward meeting near-term or long-term science-based emission reduction targets.

• target structure documentation
• internal policy on offsets
• abatement plan
• annual disclosure

• offsets counted toward targets
• weak mitigation hierarchy
• lack of policy