Climate standard setter SBTi sets new rules for companies seeking net zero

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🗞️ Driving the news: The Science Based Targets initiative (SBTi) has updated its corporate net-zero rules, allowing companies to include purchased environmental credits and carbon-removal technologies, such as reforestation or direct air capture, as part of their climate targets
• The move recognizes that some emissions are extremely difficult to eliminate and aims to provide a practical framework for companies to reach net-zero by 2035

🔭 The context: Previously, SBTi guidance required companies to focus solely on physical decarbonization within their operations and supply chains, excluding market-based mitigation
• Under the new rules, companies can integrate offsets and credits, while maintaining a focus on reducing emissions wherever possible. Hourly electricity emissions reporting is encouraged for transparency, but annual reporting remains standard for target-setting

🌍 Why it matters for the planet: By formally recognizing offsets and removals, the SBTi framework encourages companies to take comprehensive action against residual emissions, while still driving reductions in energy use and operational emissions
• This balances environmental integrity with practical implementation, potentially accelerating corporate contributions to global climate targets

⏭️ What’s next: Companies are expected to adopt low-carbon electricity sources by 2040, deploy all feasible decarbonization levers, and progressively integrate offsets and carbon-removal solutions to address emissions that cannot be eliminated
• SBTi will monitor compliance while pushing for transparency on power sourcing, renewable PPAs, and carbon removal projects

💬 One quote: “It reflects opportunities and challenges that companies have, and it’s got a focus on implementation and it reframes the corporate transition as a continuous improvement journey.” – David Kennedy, CEO, SBTi

📈 One stat: The new carbon-removal rule will take effect from 2035, specifically targeting residual emissions that remain after all feasible decarbonization steps have been implemented

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