SBTI CORPORATE

NET-ZERO
STANDARD
VERSION 1.0
OCTOBER 2021
 CONTENTS
1  Background to the Net-Zero Standard 4

2  The Net-Zero Standard framework 8

3  Mitigation pathways in the Net-Zero Standard 13

4 Setting near-term and long-term science-based targets 20

5  Guidance for companies with significant FLAG emissions 32

6  Updating and communicating targets 36

7  The Net-Zero Standard Criteria 39

8  Sector guidance for long-term science-based targets 48

9 Acronyms 53

10 Glossary 55

11 Acknowledgements 62

Version Release date Purpose Updates on earlier version

Note that the standard will be

1.0, SBTi Corporate
28/10/21 Launch of V1 subject to revisions to improve
Net-Zero Standard
readability of the document.

Partner organizations

SBTi Corporate Net-Zero Standard | Version 1.0 | October 2021 2

 1 BACKGROUND
TO THE NET-
ZERO STANDARD

SBTi Corporate Net-Zero Standard | Version 1.0 | October 2021 3

 1 BACKGROUND TO THE NET-ZERO STANDARD
The IPCC (2018), Special Report on Global Warming of 1.5°C (SR15), was widely accepted as a warning
that we must limit global temperature rise to 1.5°C above pre-industrial levels and reach net-zero CO2
emissions by 2050 for the best chance of avoiding catastrophic climate breakdown. More recently, the
IPCC (2021), Sixth Assessment Report, has confirmed that climate change is already affecting every
region on Earth, its impacts increasingly visible in the form of extreme weather, worsened droughts, and
heightened risk of forest fires.

Against this backdrop, companies are increasingly adopting net-zero targets. The number of businesses
committing to reach net-zero emissions has grown rapidly, but not all net-zero targets are equal. Without
adhering to a common definition, net-zero targets can be inconsistent, and their collective impact is
strongly limited.

While the growing interest in net-zero targets represents an unparalleled opportunity to drive corporate
climate action, it has also created a pressing need for a common understanding of “net-zero” in a
corporate context. Business leaders need a robust, science-based framework for setting net-zero targets.
Otherwise, they risk continuing to invest in business models that are inconsistent with the goals of the
Paris Agreement.

Through a transparent multi-stakeholder process, the Science Based Targets initiative (SBTi) has
developed the first global science-based standard for companies to set net-zero targets. The Net-Zero
Standard gives business leaders confidence that their near-term and long-term targets are aligned with
what is needed to contribute to a habitable planet, and it provides clarity on business climate action to a
wide range of stakeholders.

Through the SBTi, companies can commit to net-zero, which includes setting validated near-term
and long-term science-based targets consistent with limiting temperature rise to 1.5°C, to become
distinguished as climate leaders and drive forward the global transition to net-zero.

1.1 THE SCIENCE BASED TARGETS INITIATIVE

The SBTi is a global body enabling businesses to set ambitious emissions reductions targets in line with
the latest climate science. It is focused on accelerating companies across the world to halve emissions
before 2030 and achieve net-zero emissions before 2050.

The initiative is a collaboration between CDP, the United Nations Global Compact, World Resources
Institute (WRI) and the World Wide Fund for Nature (WWF) and one of the We Mean Business Coalition
commitments. The SBTi defines and promotes best practice in science-based target setting, offers
resources and guidance to reduce barriers to adoption, and independently assesses and approves
companies’ targets.

1.2 PURPOSE OF THE NET-ZERO STANDARD

The SBTi’s Corporate Net-Zero Standard (also referred to as the Net-Zero Standard) provides guidance,
criteria, and recommendations to support corporates in setting net-zero targets through the SBTi. The

SBTi Corporate Net-Zero Standard | Version 1.0 | October 2021 4

 main objective of this standard is to provide a standardized and robust approach for corporates to set net-
zero targets that are aligned with climate science.

It is important to note that while the SBTi does provide some supplementary guidance on greenhouse gas
(GHG) accounting, companies should refer to the suite of corporate Greenhouse Gas Protocol standards
on this topic.

1.3 WHO SHOULD USE THE NET-ZERO STANDARD?

The intended audience for this document is corporates with more than 500 employees that wish to
commit to setting net-zero targets through the SBTi.

Although not directly intended for SMEs, SMEs should use this document to understand the key elements
of a science-based net-zero target and the SBTi’s recommended target-setting process. The SBTi offers
a simplified route for SMEs to set net-zero targets, meaning that some of the detail contained within this
document will not be applicable. SMEs should refer to the SME FAQ for more information.

This document does not cover net-zero targets for financial institutions. The SBTi’s financial sector project
has a separate net-zero framework for financial institutions.

1.4 THE NET-ZERO STANDARD DEVELOPMENT PROCESS

The SBTi initiated a scoping phase of work in 2019 to develop a framework to enable companies to set
robust and credible net-zero targets in line with a 1.5°C future. The standard development process formally
began after the SBTi’s publication of Foundations for net-zero target setting in the corporate sector in
September 2020. At this point, the SBTi convened a dedicated Net-Zero Expert Advisory Group (EAG),
which was to be the main consensus building body for the project.

The SBTi then began developing detailed criteria and guidance in regular consultation with the EAG,
as well as the SBTi’s Scientific and Technical Advisory Group. The SBTi requested feedback from
stakeholders to improve the standard through two public consultations and a company road test. The
standard was launched on 28 October 2021.

Figure 1 An outline of key milestones in Net-Zero Standard development process

2020 2021
Sep Oct Jan Feb-Mar Jul-Aug Sep-Oct Oct-Nov

Publication Set up of Second

Initial
of the NZ Expert First public Road-testing public Launch
draft of
Foundations Advisory consultation process consultation
Paper criteria
Group

A balanced and diverse group of 42 Nearly 400 participants from 84 companies participated to 167 participants
experts from civil society, academia, 37 different countries and a trial the target setting tool, participated in the
& business has guided the variety of sectors participated review the criteria and pre-launch
development of the standard in the first public consultation guidance, and provide feedback consultation

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 1.5 HOW THE STANDARD RELATES TO OTHER KEY SBTI
DOCUMENTS
The table below describes some of the key SBTi resources that companies may find useful when
going through the target setting process. All resources, including translations, can be found at
[Link]/resources or [Link]/net-zero.

Table 1 A mapping of key SBTi resources that companies should refer to when setting science-
based net-zero targets.

TOPIC DOCUMENT DESCRIPTION

Companies wishing to set targets through the SBTi – both for near-
Commitment Letter term and net-zero commitments – should complete and submit the
commitment letter.
Target
commitments SMEs use a streamlined process to set targets in line with climate
SME Target Setting science for both near-term and net-zero targets. SMEs can commit and
Letter select targets by completing and submitting the SME Target Setting
Letter.
A quick, simple, step-by-step flow chart that allows companies to
SBTi How-To Guide
understand how to set science-based targets in their specific situation.
SMEs use a streamlined process to set targets in line with climate
SME Target Setting science for both near-term and net-zero targets. SMEs can commit and
Letter select targets by completing and submitting the SME Target Setting
Letter.
Setting near-
SBTi Corporate Detailed step-by-step guide to the process of setting a near-term
term science-
Manual science-based target through the SBTi.
based targets
The criteria companies' near-term targets must meet to be approved as
SBTi Criteria
science-based by the SBTi.
Guide to the target validation process. To be used in conjunction
Target Validation with other key resources, the target validation protocol explains the
Protocol target setting process, how targets are assessed and sector-specific
requirements.
Foundations for net-
This paper lays out the conceptual foundations for credible, science-
zero target-setting in
based net-zero targets for the corporate sector.
the corporate sector
This document. Provides guidance, criteria, and recommendations to
Net-Zero Standard
support corporates in setting net-zero targets through the SBTi
The criteria companies' net-zero targets must meet to be approved as
Net-Zero Standard
science-based by the SBTi. This is a standalone version of chapter 7 of
Criteria
this document.
Getting Started A quick, simple, step-by-step flow chart that allows companies to
Net-zero
Guide understand how to set net-zero targets in their specific situation.
Target-setting tool to calculate long-term SBTs in-line with the Net-Zero
Net-Zero tool Standard. In a future update, the Net-Zero Tool and current SBTi target-
setting tool for near-term SBTs will be combined.
The SBTi is continuing its work on its role in incentivizing beyond value
Beyond value chain
chain mitigation after launch of V1 of the Standard. This FAQ will be
mitigation FAQ
used to provide information and updates during this process.
SBTi’s Technical Summary that provides more information on pathways
Pathways to Net -Zero
used by the SBTi.

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 2 THE NET-ZERO
STANDARD
FRAMEWORK

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 2 THE NET-ZERO STANDARD FRAMEWORK
As described in more detail in Foundations for net-zero target setting in the corporate sector, there are
many different transition pathways toward achieving a state of net-zero emissions at the global level, each
with different implications for our climate, for nature, and for society. Considering these implications, the
Net-Zero Standard was developed with the intention of guiding corporates towards a state of net-zero in a
way that is consistent with societal climate and sustainability goals and within the biophysical limits of the
planet.

To contribute to societal net-zero goals, companies must deeply reduce emissions and counterbalance
the impact of any emissions that remain. The SBTi Net-Zero Standard defines corporate net-zero as:

• Reducing scope 1, 2, and 3 emissions to zero or to a residual level that is consistent with reaching
net-zero emissions at the global or sector level in eligible 1.5°C-aligned pathways

• Neutralizing any residual emissions at the net-zero target year and any GHG emissions released into
the atmosphere thereafter.

The Net-Zero Standard sets out four key elements that make up a corporate net-zero target as depicted
in Figure 2. The first of these elements is a near-term science-based target, the second is a long-term
science-based target, the third is mitigation beyond the value chain, and the final element is neutralization
of any residual emissions. These four elements are described in the following sections in more detail.

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 Figure 2 Key elements of the Net-Zero Standard

By 2050 at the latest

5 to 10 years Abatement within
the value chain
Emissions (tCO2e)

Removals
1
Abatement or removals
beyond a company’s value
chain
Net-zero emissions

1.5°C-aligned
emissions pathway

4
3

1 To set near-term SBTs: 5–10 year emission reduction targets in line with 1.5°C pathways

To set long-term SBTs: Target to reduce emissions to a residual level in line with 1.5°C scenarios by no later
2 than 2050

Beyond value chain mitigation: In the transition to net-zero, companies should take action to mitigate
3 emissions beyond their value chains. For example, purchasing high-quality, jurisdictional REDD+ credits or
investing in direct air capture (DAC) and geologic storage

Neutralization of residual emissions: GHGs released into the atmosphere when the company has achieved
4 their long-term SBT must be counterbalanced through the permanent removal and storage of carbon from
the atmosphere.

2.1 NEAR-TERM SCIENCE-BASED TARGETS

What: Previously known as “science-based targets”, these are 5-10-year GHG mitigation targets in line
with 1.5°C pathways. When companies reach their near-term target date, they must calculate new near-
term science-based targets to serve as milestones on the path towards reaching their long-term science-
based target.

Why: Near-term science-based targets galvanize the action required for significant emissions reductions
to be achieved by 2030. Near-term emissions reductions are critical to not exceeding the global emissions
budget and are not interchangeable with long-term targets.1

2.2 LONG-TERM SCIENCE-BASED TARGETS

What: These targets show companies how much they must reduce value chain emissions to align with
reaching net-zero at the global or sector level in eligible 1.5°C pathways by 2050 or sooner.

1 Despite this, if a company sets a long-term science-based target to reach the level of decarbonization required to reach net-zero at the
global or sector level in 1.5°C pathways within a 10-year timeframe, the near-term science-based target is not required.

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 Why: These targets drive economy-wide alignment and long-term business planning to reach the level
of global emissions reductions needed for climate goals to be met based on science. A company cannot
claim to have reached net-zero until the long-term science-based target is achieved.

2.3 NEUTRALIZATION
What: Measures that companies take to remove carbon from the atmosphere and permanently store it to
counterbalance the impact of emissions that remain unabated.

Why: Although most companies will reduce emissions by at least 90% through their long-term science-
based targets, some residual emissions may remain. These emissions must be neutralised to reach net-
zero emissions and a state of no impact on the climate from GHG emissions.

2.4 BEYOND VALUE CHAIN MITIGATION

What: “Beyond value chain mitigation” refers to mitigation action or investments that fall outside of a
company’s value chain. This includes activities that avoid or reduce greenhouse gas emissions, and those
that remove and store greenhouse gases from the atmosphere.

Why: The climate and ecological crises require bold and decisive action from companies. Decarbonizing
a company’s value chain in line with science and reaching net-zero emissions by 2050 is increasingly
becoming the minimum societal expectation on companies. Businesses can play a critical role in
accelerating the net-zero transition and in addressing the ecological crisis by investing in mitigations
actions beyond their value chains. Additional investments like these could help increase the likelihood
the global community stays within a 1.5˚C carbon budget but are not a substitute for the rapid and deep
reduction of a company’s own value chain emissions.

2.5 FURTHER WORK ON BEYOND VALUE CHAIN MITIGATION

The principle at the heart of the SBTi Net-Zero Standard is the “mitigation hierarchy”. Under the mitigation
hierarchy, companies should set science-based targets, both near- and long-term, to address value chain
emissions and implement strategies to achieve these targets as a first order priority ahead of actions or
investments to mitigate emissions outside their value chains (see Figure 3).

Although setting and achieving science-based targets must be the priority, companies should go further
and invest in mitigation outside their value chains to contribute towards reaching societal net-zero. The
SBTi recommends that companies prioritize near-term science-based targets, followed by securing
and enhancing carbon sinks (terrestrial, coastal and marine, etc.) to avoid the emissions that arise from
their degradation. Examples include purchasing high quality, jurisdictional REDD+ carbon credits that
support countries in raising the ambition on, and in the long-term, achieving their nationally determined
contributions There is also a critical need for companies to invest in nascent GHG removal technologies
(e.g. direct air capture (DAC) and storage) so that the technology is available to neutralize residual
emissions at the long-term science-based target date.

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 Figure 3 SBTi perspective on prioritization of mitigation actions

EMISSION REDUCTIONS ARE KEY BUT BEYOND VALUE CHAIN

TO TRANSITION TO GLOBAL NET- MITIGATION CAN ACCELERATE
ZERO THE TRANSITION
•  In the near-term, prioritize securing and
enhancing carbon sinks (terrestrial, coastal and
•  Complete an emission inventory following the marine, etc.) to avoid the emissions that arise
GHG Protocol from their degradation. There is also a critical
need for companies to invest in nascent GHG
•  Set near- and long-term science-based targets
removal technologies (e.g. direct air capture
to reduce value chain emissions
(DAC) and storage).
•  Implement a strategy to achieve science-based
•  In the long-term, when the net-zero target date
targets
is reached, companies must neutralize any
•  Disclose target progress annually residentual emissions by permanently removing
carbon from the atmosphere. Companies must
continue to neutralize any remaining emissions.

The SBTi recognizes there is an urgent need to scale up finance in the near-term to support climate
mitigation, and is undertaking research to understand what role it should play in incentivizing and enabling
these investments. In the coming months, the SBTi will use the results of this work to consider various
models through consultation with the Expert Advisory Group and other stakeholders and decide on a
course of action in early 2022. Please see the Beyond Value Chain Mitigation FAQ on our website for more
information on the topic.

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11
 3 MITIGATION
PATHWAYS IN
THE NET-ZERO
STANDARD

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 3 MITIGATION PATHWAYS IN THE NET-ZERO
STANDARD
Through the Paris Agreement, parties and signatories committed to “holding the increase in global
average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the
temperature increase to 1.5°C above pre-industrial levels.”

In the years since the Paris Agreement was signed, the need to limit warming to 1.5°C has become
even stronger. Against the backdrop of increasingly frequent and destructive climate-related disasters,
the IPCC’s SR15 report delivered a harrowing scientific consensus: while impacts to human health,
society, and nature associated with 1.5°C of warming are worse than previously acknowledged, the risks
associated with exceeding 1.5°C are far higher. Because of these risks, SR15 highlighted pathways that
limit warming to 1.5°C with no or limited overshoot (overshoot <0.1°C).

3.1 THE SCIENCE BEHIND SCIENCE-BASED NET-ZERO TARGETS

As described in SR15, scenarios that limit warming to 1.5°C with no or limited overshoot reach net-
zero CO2 emissions around 2050, accompanied by rapid reductions in non-CO2 GHG emissions. These
scenarios entail profound transitions in the global energy, industry, urban, and land systems that involve:

• Full or near-full decarbonization for energy and industrial CO2 emissions achieving a zero-emissions
energy supply system by mid-century.

• Eliminating CO2 emissions associated with agriculture, forestry, and land-use

• Deep reductions in non-CO2 emissions from all sectors.

• Removing CO2 from the atmosphere to neutralize residual emissions and, potentially, sustain net
negative emissions that reduce cumulative CO2 in the atmosphere over time.

The different system transformations in 1.5°C mitigation scenarios occur simultaneously and all of them
are needed for society to reach net-zero emissions and limit warming to 1.5°C. An understanding of
the synergies and trade-offs between different climate change mitigation scenarios and sustainable
development should also guide climate action.

Pathways used by the SBTi aim to steer voluntary climate action and contribute to achieving the 1.5°C
objective of the Paris Agreement and the Sustainable Development Goals (SDGs), reaching net-zero CO2
emissions at the global level by 2050 and net-zero GHG emissions in 2050 or later. In aggregate, 1.5ºC-
aligned pathways used by the SBTi stay within a 500 GT carbon budget under the assumption of about
20-40 GT of cumulative CO2 removal by 2050. For a detailed overview of how the SBTi determines 1.5ºC-
aligned pathways for calculating SBTs, in accordance with concepts described in the SBTi’s ‘Foundations
of Science-based Target Setting’ (2019) and principles introduced in the SBTi’s ‘Foundations for Science-
based Net-Zero Target Setting in the Corporate Sector’ (2020), please see “Pathways to Net-Zero: SBTi
Technical Summary.”

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 3.2 HOW MITIGATION PATHWAYS ARE USED TO INFORM SCIENCE-
BASED TARGETS
Mitigation pathways play a key role in setting science-based targets. For near-term science-based targets,
mitigation pathways inform the rate of emissions reductions or emissions intensity reductions that are
needed. For long-term science-based targets, they inform the overall emissions reduction or convergence
intensity that must be reached to be aligned with net-zero at the global or sector level.

Because of this, near-term science-based targets are target year-dependent, while long-term science-
based targets are target year-independent. This means that a company’s reduction target will differ
depending on the target year for its near-term targets, but the reduction target will not differ depending on
the target year for its long-term targets. This is illustrated in Figure 4 below. Because of this, companies
will model long-term targets, and then set their net-zero and long-term target date depending on when the
emission reductions can be achieved.

Figure 4 Schematic showing target year dependency of near-term science-based targets in

comparison to the target year independency of long-term science-based targets. Companies can
select a target year of 2050 or earlier for long-term targets, which depends on h how quickly it can
reduce its emissions.

Base year emissions

Near-term SBT

Long-term SBT

2030 2040 2050

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 Box 1. How are residual emissions determined for different sectors of the economy?

Residual emissions levels are grounded in what’s needed to achieve net-zero CO2 emissions at the
global level by 2050, limit warming to 1.5°C, and contribute to achieving the SDGs. In pathways used
by the SBTi, residual emissions at the cross-sector level reflect the 2020-2050 emissions reduction
needed. At the sector level, residual emissions reflect a sector-specific 2020-2050 emissions reduction
or a 2050 convergence emissions intensity (except for the power sector which uses 2040 instead of
2050 due to an earlier net-zero year). The same pathways are used to calculate near-term SBTs and
residual emissions levels for long-term SBTs. In aggregate, these pathways:

• Stay within the remaining carbon budget for a 50% likelihood of limiting warming to 1.5°C

• Reduce energy and industrial process CO2 and CH4 emissions by an amount roughly consistent
with the IEA’s Net Zero Emissions scenario

• Mitigate forestry, land-use and agriculture (FLAG) sector GHG emissions by an amount consistent
with the detailed land-sector roadmap in Roe et al. (2019), ‘Contribution of the land sector to a
1.5°C world’

• Reach net-zero CO2 at the global level by 2050, assuming at least low/medium CO2 removal (1-4
GT CO2/year), and net-zero GHG emissions in 2050 or later, depending on CO2 removal levels and
different mitigation choices across pathways

To meet these conditions, an economy-wide emissions reduction of at least 90% by 2050 informs
the level of residual emissions for most companies, as shown by the cross-sector pathway. The IEA’s
Net-Zero Emissions (NZE) scenario, which reduces energy and industrial process CO2 emissions
95% between 2020 and 2050, has been an important reference for this calculation; but ultimately, our
approach to developing the cross-sector pathway was holistic, building from an expansive body of
literature and iterative development with the SBTi’s Scientific Advisory Group. For more information
on the cross-sector pathway and sector-specific pathways used by the SBTi, please see the SBTi’s
Technical Summary “Pathways to Net-Zero.”

3.2.1 Overview of pathways and which companies should use them

The SBTi offers a cross-sector pathway and sector-specific pathways for setting science-based targets.
Companies in the power generation sector and forestry, land-use, and agriculture (FLAG) sectors are
required to set SBTs using sector-specific pathways (effective for FLAG sectors after the finalization of
SBTi and GHG Protocol guidance). For all other companies, the cross-sector pathway is eligible and
recommended for setting absolute targets.

Using the cross-sector pathway, companies can set near-term targets that reduce emissions at a linear
annual rate of 4.2%; however, some sector-specific pathways vary significantly from the cross-sector
pathway in the near-term. For near-term SBTs, sector-specific pathways may only be used to calculate
targets using the intensity convergence (SDA) method.

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 In the long-term, emissions in the cross-sector pathway are reduced by at least 90% and most sector-
specific pathways also reduce CO2 emissions by 90% or more from 2020 levels. Consequently, for many
companies, long-term science-based targets will be equivalent to at least a 90% absolute reduction
across scopes regardless of whether the cross-sector pathway or sector-specific pathways are used. For
long-term SBTs, sector-specific pathways can be used to calculate either intensity or absolute targets, in
addition to the option of calculating absolute targets using the cross-sector pathway.

Sector-specific pathways are available or in development for the energy supply sector, transport sector,
industry sectors including cement and steel, buildings sector, and sectors with significant FLAG emissions
(Table 2).

Table 2 Summary of the status of sector-specific guidance and pathways. For sectors where
sector-specific guidance is not yet complete, all dates are expected (not binding) due to each
project undergoing formal SBTi review before completion. Except for power generation and FLAG,
all currently eligible sectors may use the cross-sector pathway to set 1.5˚C-aligned near-term and
long-term science-based targets. Currently eligible sectors where 1.5˚C sector-specific pathway(s)
are planned but not yet available are strongly recommended to use the cross-sector pathway
or FLAG pathway to set science-based targets. For the road & rail transport sector, well-below
2˚C-aligned sector specific pathways are available.

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 Companies in heavy-emitting sectors often use sector-specific pathways to calculate both near-term and
long-term intensity targets. Other companies with scope 3 emissions allocated to the activities of a heavy-
emitting sector use a mix of approaches to calculate targets. For example, a real estate development
company may have significant scope 3 emissions attributed to both the steel and cement sectors. When
setting targets that cover upstream scope 3 emissions, these companies may use a sector-specific
pathway to set intensity targets as long as the pathway reflects both supply-side and demand-side
mitigation where relevant (see sector-specific guidance for more information).

Table 3 A summary of how the cross-sector pathway and sector-specific pathways can be applied.

WHICH COMPANIES CAN USE THESE WHAT TYPES OF TARGETS CAN BE

PATHWAYS? MODELLED?

Near-term Long-term Near-term Long-term

Cross-sector All companies, except those in the power

Absolute Absolute
pathway generation sector and FLAG sectors

For scope 1: typically companies in heavy- For the FLAG

emitting sectors or a FLAG sector sectors: Absolute
Sector-specific or intensity Absolute or
pathways For scope 3: companies with scope 3 intensity2
emissions dominated by one or more For all other
heavy-emitting sectors or FLAG sectors sectors: intensity

3.3 TRANSFORMATIVE MITIGATION IS REQUIRED FROM ALL

SECTORS
Figure 5 shows the ambition of the cross-sector pathway and sector-specific pathways used to calculate
near-term and long-term SBTs. Some sectors reduce emissions more than the cross-sector pathway in
2050, while other sectors reduce emissions less, but all of the pathways reflect transformative mitigation
efforts. Companies in the power generation sector must use the sector-specific pathway to calculate SBTs.
Some other sectors where emissions are reduced more in the sector-specific pathway can still use the
cross-sector pathway for two main reasons: (1) the difference is small (<10% of base year emissions) and
(2) companies are required to neutralize unabated emissions regardless, which aims to counteract the
impact of any residual emissions and incentivize continued abatement once net-zero is reached.

2 Companies setting targets on upstream scope 3 emissions that arise from high-emitting sectors should review relevant sector guidance to
understand when it is appropriate to set absolute or intensity targets using sector-specific pathways (i.e., a professional services firm setting
intensity targets on air travel emissions should review aviation sector guidance).

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 Figure 5. a. GHG emissions in the cross-sector emissions pathway, which covers CO2, CH4, and N2O from
energy supply, transport, industry, and buildings. All companies except the power generation sector and
FLAG sectors may set SBTs using the cross-sector pathway. b. Sector-specific long-term SBTs for sectors
included in V1.0 of the Net-Zero Standard. At the company level, absolute targets are based on the sector’s
2020-2050 absolute emissions reduction (red bars & data labels), except the power sector; and intensity
targets are based on the 2050 convergence intensity (data labels only), except the power sector. For the
power sector, long-term SBTs are calculated based on 2040 instead of 2050 due to an earlier net-zero
year. Orange bars show the 2020-2050 sector average intensity reduction, which may differ from company
targets. c. Sector-specific intensity pathways (2020-2050) for scope 1 only. After the completion of the
cement and steel-sector projects, scope 2 emissions will be added, iron & steel will be disaggregated, and
other adjustments may be incorporated. For these reasons, the cement and iron & steel sector pathways are
currently eligible to calculate long-term SBTs but not near-term SBTs.

Cross-sector pathway
45

40

35

30
GT CO2e

25

20

15

10

0
2020 2030 2040 2050

Sector-specific long-term SBTs Sector-specific intensity pathways

100%
FLAG sector 80% reduction
90%
Power 0.009 kgCO2/kWh
97% reduction 80%

Cement 0.03 tCO2/t cement 70%

94% reduction
60%
0.11 tCO2/t steel
Iron & Steel 50%
91% reduction
Service 0.18 kgCO2/ m2 30%
buildings 98% reduction
20%
Residential 0.31 kgCO2/m2
buildings 95% reduction 10%

0% 50% 100% 0%
2010 2020 2030 2040 2050 2060
% intensity reduction (sector average, 2020-2050)
Cement Iron & steel
% absolute reduction (2020-2050)
Power Residential buildings
Service buildings

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 4 SETTING NEAR-
TERM AND
LONG-TERM
SCIENCE-BASED
TARGETS

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 4 SETTING NEAR-TERM AND LONG-TERM
SCIENCE-BASED TARGETS
Companies can take a variety of approaches to developing near-term and long-term science-based
targets; however, the SBTi recommends following the five steps described in this section.

Figure 6 The SBTi recommends a five-step approach to setting science-based targets.

CALCULATE
SELECT A YOUR SET TARGET CHOOSE A CALCULATE
BASE YEAR COMPANY’S BOUNDARIES TARGET YEAR TARGETS
EMISSIONS

4.1 SELECT A BASE YEAR

Companies need to establish a base year to track emissions performance consistently and meaningfully
over the target period. The following considerations are important for selecting a base year:

• Scope 1, 2, and 3 emissions data should be accurate and verifiable.

• Base year emissions should be representative of a company’s typical GHG profile3.

• The base year should be chosen such that targets have sufficient forward-looking ambition.

• The base year must be no earlier than 2015.

Companies that have already set near-term science-based targets must use the same base year for
their long-term science-based target. For more information on setting the base year, please see the SBTi
Corporate Manual (v1.1; p.11).

4.2 CALCULATE YOUR COMPANY’S EMISSIONS

4.2.1 Develop a full GHG emissions inventory

Companies are required to have a thorough emissions inventory that covers at least 95% of company-wide
scope 1 and 2 GHG emissions and a complete scope 3 screening. The following points are important for
alignment with the GHG Protocol and SBTi Criteria.

Ensure the target boundary is aligned with the GHG Inventory boundary: A company must select a
single GHG Protocol defined method (operational control, financial control, or equity share) to determine
its organizational boundary. The same method should be used to calculate its GHG emissions inventory
and to define its science-based target boundaries. Both the emissions inventory and target boundary
3 For companies that have been significantly impacted by COVID-19, the SBTi recommends selecting a base year such as 2019 instead of
2020 or 2021 when setting targets. Alternatively, companies may use a multi-year average base year approach, as described in Chapter 5 of
the Greenhouse Gas Protocol Corporate Standard.

SBTi Corporate Net-Zero Standard | Version 1.0 | October 2021 20

 should cover all seven GHGs or classes of GHGs covered by the UNFCCC/Kyoto Protocol.

For more information on organizational boundary-setting, please see the SBTi Corporate Manual (v1.1;
p.12) and the GHG Protocol Corporate Standard (WRI & WBCSD 2004).

Determine how to treat subsidiaries: Parent companies should set science-based targets for
subsidiaries in accordance with the selected organizational boundary approach. When required by the
organizational boundary approach, parent companies must include emissions from subsidiary operations
in their GHG inventory.

The SBTi does allow subsidiaries to submit targets. However, regardless of whether the subsidiary has
approved science-based targets, parent companies must include subsidiaries in their target boundary as
required by the selected organizational boundary approach.

For more information on subsidiaries, please see the SBTi Corporate Manual (v1.1; p.13) and page 19 of
the GHG Protocol Corporate Standard (p. 19).

Exclude the use of carbon credits: Carbon credits do not count as reductions toward meeting your
science-based targets. Companies should only account for reductions that occur within their operations
and value chain.

Exclude avoided emissions: A company’s product avoids emissions if it has lower life cycle GHG
emissions relative to some other company’s product that provides an equivalent function. Avoided
emissions occur outside of the product’s life cycle and therefore do not count as a reduction of a
company’s scope 1, 2 and 3 inventory.

For more information on avoided emission, please see the SBTi Corporate Manual (v1.1; p.13) and the
World Resources Institute paper on avoided emissions.

Include all mandatory scope 3 emissions: Companies must develop a complete scope 3 inventory,
which is critical for identifying emissions hotspots, reduction opportunities, and areas of risk up and down
the value chain. The GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard
(WRI & WBCSD, 2011), together with the Scope 3 Calculation Guidance, provide detailed guidance on
how to complete a scope 3 inventory. The Scope 3 Standard defines 15 distinct categories of upstream
and downstream emissions sources and requires companies to include all relevant categories in an
inventory, based on such criteria as the magnitude of emissions or the level of influence exerted over the
categories. See Chapter 7 of the Scope 3 Standard for further details.

A useful approach to calculating scope 3 emissions is to first calculate a high-level screening inventory.
This inventory can be used to directly set a target or to identify high-impact categories for which more
accurate data is needed. Over time, companies should strive to develop complete inventories and improve
data quality for high-impact categories (e.g., collect primary data) to better track progress against targets.

For more information on calculating a scope 3 emissions inventory, please see the Corporate Manual
(v1.1.; p. 22) and the GHG Protocol’s Corporate Value Chain (Scope 3) Accounting and Reporting standard.

Determine how to treat indirect use-phase emissions: Indirect use-phase emissions are generated by

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 products that only consume energy indirectly during use over their expected lifetime. Examples of such
emissions include the washing and drying of apparel for apparel manufacturers and the cooking and
refrigeration of food products for food retailers.

Indirect use-phase emissions are not within the “minimum boundary” for category 11 (use of sold
products) and are listed as “optional.”

If companies have significant indirect use-phase emissions and have levers to address them, they are
encouraged to estimate these emissions and set an optional target on these emissions. Despite this,
optional scope 3 emissions are not counted towards the two-thirds boundary in near-term science-based
targets and 90% boundary in long-term science-based targets.

Review any sector-specific guidance: The SBTi publishes a wide range of resources to support
businesses in their target-setting journey. For some sectors, sector-specific guidance developed with
industry experts lays out best practice for inventory and target boundary-setting, emissions accounting,
and target calculation, in line with the GHG Protocol. A summary of available and planned sector-specific
guidance resources is shown in Table 2. For more information on sector-specific guidance, visit the sector
guidance page of our website.

4.2.2 Calculate emissions that are reported separately from the GHG inventory

To meet SBTi criteria, companies that use bioenergy must report direct CO2 emissions from biomass
combustion, processing, and distribution, as well as the land-use emissions and removals associated with
bioenergy feedstock. These emissions are reported separately from the company’s GHG inventory, in line
with Greenhouse Gas Protocol guidance.

Companies that sell or distribute fossil fuels are required to report the use-phase emissions associated
with those fossil fuels in scope 3 category 11 (use of sold products) and cover these emissions with a
target. For companies that transport or distribute, but do not sell, fossil fuels, these emissions must be
calculated and covered by a target but are typically reported outside a company’s GHG inventory.

Companies are also encouraged to report GHG emissions from land-use change (except for bioenergy,
where reporting these emissions is required by the SBTi), although these are not currently required to be
included in emissions inventories by the Greenhouse Gas Protocol.4

4.3 SET TARGET BOUNDARIES

4.3.1 Near-term science-based target boundary (scopes 1, 2, and 3)

Near-term science-based targets must cover at least 95% of company-wide scope 1 and 2 emissions. For
companies with scope 3 emissions that are at least 40% of total emissions (scope 1, 2, and 3 emissions),
at least 67% of scope 3 emissions must also be covered. Companies in certain heavy-emitting sectors
are required to include specific emissions sources or scope 3 categories in their science-based target
boundary, please see the SBTi Corporate Manual (v1.1; p.17).

4 Note on forthcoming land sector GHG Protocol guidance. See “Guidance for companies with significant FLAG emissions” for more informa-
tion.

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 4.3.2 Long-term science-based target boundary (scopes 1, 2, and 3)

Long-term SBTs must cover at least 95% of company-wide scope 1 and 2 emissions and 90% of scope 3
emissions. See Box 2 for more information.

Box 2. The “expansive boundary” approach for scope 3

A comprehensive target boundary is necessary for companies to make credible net-zero claims at
the end of their decarbonization journey. However, acknowledging the challenges that companies
encounter with scope 3, the SBTi Net-Zero Standard is following an expansive boundary approach and
a gradual increase in ambition.

In the near-term (5 to 10 years), a scope 3 target is needed whenever scope 3 represents more than
40% of a company’s total emissions. Near-term scope 3 targets need to cover 2/3 of scope emissions
and align to well-below 2°C ambition. In the long-term (by 2050 at the latest), the boundary of the target
will increase to cover all material sources of emissions in the value chain (materiality threshold of 90%)
aiming to achieve decarbonization in line with 1.5°C scenarios.

Figure 7 A visual explanation of the "expansive boundary" approach the Net-Zero Standard
takes to scope 3 target boundaries.
67% boundary for 90% boundary for
near-term targets long-term targets
(5 to 10 years) (by 2050)

Near-term
science-based
target
Emissions

Long-term
science-based
target

2015 2020 2025 2030 2035 2040 2045 2050 2055 2060

Increasing the scope 3 boundary requirements from 67% for near-term SBTs to 90% for long-term SBTs
will be challenging, but it will also drive major opportunities to collaborate across the value chain to
support suppliers and customers to decarbonize. Through the expansive boundary scope 3 approach
from the near to long-term, companies have time to work through the complexity of scope 3 and long-
term scope 3 reductions, focusing now on fast reductions at scale across all scopes to tackle their most
material emission sources.

The SBTi is developing plans to provide further support to companies through a specific follow-on
project, as well as through a Supplier Engagement Toolkit which will be released in late 2021.

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 4.3.3 Additional required science-based target coverage

Companies that use bioenergy must include direct CO2 emissions from biomass combustion, processing,
and distribution, as well as the land-use emissions and removals associated with bioenergy feedstock,
in their target boundary, even though these emissions are reported outside a company’s GHG inventory.
Similarly, companies that transport or distribute fossil fuels must include use-phase emissions in their
target boundary, even though these emissions may not usually be reported in a company’s GHG inventory.

Companies are also encouraged to include GHG emissions from land-use change in their target boundary
(except for bioenergy, where including these emissions is required by the SBTi), although these emissions
are not currently required to be included in GHG inventories by the Greenhouse Gas Protocol.5

A summary of the required coverage of near-term and long-term science-based targets is shown in Table
4, and a list of available and planned sector guidance is shown in Table 2.

Table 4 Minimum boundary coverage for near-term targets and long-term targets

MINIMUM % BOUNDARY COVERAGE BY SCOPE

GHG inventory scope Near-term targets Long-term targets

Scopes 1+2 95% minimum coverage

67% minimum coverage (if scope
90% minimum coverage (all
Scope 3 3 emissions are at least 40% of
companies)
total scope 1, 2, and 3 emissions)

SPECIAL BOUNDARY COVERAGE REQUIREMENTS BY EMISSIONS SOURCE

Emissions source Near-term targets Long-term targets

Use-phase emissions from sold

Must be covered by an absolute contraction target
or distributed fossil fuels
Direct CO2 emissions from
biomass combustion,
processing and distribution,
Must be included in target boundary
as well as land-use emissions
and carbon removals from
bioenergy feedstock
Transportation companies must set targets on a “well-to-wheel”
basis

Sector-specific target boundary Power generation companies must set an SDA target on scope 1
requirements power generation, and all sold electricity (if scope 3 coverage is
required)

See Table 12 for a detailed list of sector-specific requirements

GHG from land-use change
Optional to include
(excluding bioenergy)

5 Note on forthcoming land sector GHG Protocol guidance

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 4.3.4 Meeting SBTi boundary criteria with several targets

Companies often set several targets that collectively meet the boundary requirements described above.
This is a valid approach to meeting the SBTi Criteria and Net-Zero Standard. Companies may consider
setting targets that cover emissions from different sectors or that cover different scope 3 categories.

4.4 CHOOSE A TARGET YEAR

Near-term targets must have a target year 5-10 years from the date of submission to the SBTi, while long-
term targets must have a target year of 2050 or sooner (2040 for companies in the power sector).

Because the ambition of long-term science-based targets is target year-independent, companies should
begin by choosing any eligible target year. Based on the results of their target calculation, the company
may adjust their chosen target year to be sooner or later depending on its ability to achieve its long-term
target.

Target methods are used to calculate near-term and long-term targets based on a mitigation pathway and
company inputs. Companies may choose from the following science-based target methods to calculate
their targets:

4.5 CALCULATE TARGETS
4.5.1 Eligible for scopes 1+2 (both near-term and long-term science-based targets)

• Absolute contraction: Using this method, companies reduce absolute emissions by an amount
consistent with a mitigation pathway. For near-term SBTs, the minimum reduction is calculated
as a linear reduction rate (e.g., 4.2% p.a.), whereas for long-term SBTs the minimum reduction is
calculated as an overall amount (e.g., 90% overall).

• Physical intensity convergence: Using this method, all companies in a sector converge to a shared
emissions intensity in 2050 (2040 for the power sector). For near-term targets, the SDA formula is
used, which adjusts a company’s target based on their starting point, target year, and projected
output growth. For long-term targets, the target year emissions intensity is just equal to the sector’s
emissions intensity in 2050 (2040 for the power sector).

• Renewable electricity (scope 2 only): Using this method, companies set targets to actively procure
at least 80% renewable electricity by 2025 and 100% renewable electricity by 2030.

4.5.2 Eligible for scope 3 (both near-term and long-term targets)

• Physical intensity contraction: Using this method, companies define their own emissions intensity
metric and set targets to reduce emissions intensity by an amount consistent with limiting warming
to at least well-below 2˚C for near-term targets and 1.5˚C for long-term targets. For near-term targets,
the minimum reduction is calculated as a 7% year-on-year reduction; whereas for long-term targets,
the minimum reduction is calculated as an overall 97% reduction.6

6 In previous versions of the SBTi Criteria, the minimum ambition for scope 3 physical intensity targets was a 2% linear annual reduction with
no increase in absolute emissions. It has been updated to a 7% compound reduction to align with well-below 2˚C scenarios.

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 • Economic intensity: Using this method, companies reduce economic emissions intensity (e.g., tCO2
per unit of value added) by an amount consistent with limiting warming to at least well-below 2˚C
for near-term targets and 1.5˚C for long-term targets. For near-term targets, the minimum reduction
is calculated as a 7% year-on-year reduction; for long-term targets, the minimum reduction is
calculated as an overall 97% reduction.

4.5.3 Eligible for near-term scope 3 targets only

• Engagement targets (scope 3 near-term targets only): Using this method, companies set a target
for suppliers or customers representing a certain percentage of emissions to set their own science-
based targets.

Using the methods listed above, companies must set near-term targets with a minimum ambition of 1.5°C
for scopes 1 and 2 and a minimum ambition of well-below 2°C for scope 3. Long-term targets must have a
minimum ambition of 1.5°C across scopes.

Table 5 Ambition ranges for target classification of near-term science-based targets.

ANNUAL LINEAR REDUCTION RATE OVER

LONG-TERM TEMPERATURE GOAL
TARGET PERIOD

Well-below 2˚C
2.5% ≤ X < 4.2%
Approx. 66% chance of limiting peak warming between
present and 2100 to below 2˚C.

1.5˚C
X ≥ 4.2%
Approx. 50% chance of limiting warming in 2100 to 1.5˚C.

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26
 A summary of eligible methods as described in this section is shown in Table 6 below.

Table 6 A summary of eligible methods for near-term and long-term targets .

NEAR-TERM LONG-TERM ELIGIBILITY

Cross-sector pathway:

• 90% reduction
Cross-sector pathway:
• Sector-specific pathways:
• S1+2: 4.2% p.a. • FLAG sector: 80% reduction • Scopes 1-3
Absolute
• S3: 2.5% p.a. • Cement, iron & steel,
Contraction
• Default option
residential buildings, and
service buildings: >90%

• Other sector-specific and

commodity-specific pathways
to be added
Sector-specific • Scopes 1-3
and commodity-
Physical • Most commonly used
specific pathways Sector-specific and commodity-
intensity by heavy-emitting
(using the Sectoral specific pathways
convergence sectors and the FLAG
Decarbonization
Approach) sectors

Use of RECs or vPPAs:

Use of RECs or vPPAs:
Renewable
• 80% by 2025 • Scope 2
electricity
• 100% by 2030
• 100% by 2030
Suppliers or customers
to set SBTs at a minimum • Scope 3
Engagement N/A
ambiton of well-below • Only near-term
2°C.
At least 7% year-on-year
Economic
reduction of emissions 97% • Scope 3 only
intensity
per unit value added.
At least 7% year-on-year
reduction for a company-
Physical
defined physical 97% • Scope 3 only
intensity
emissions intensity
metric

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 4.6 CALCULATING SCIENCE-BASED TARGETS
There are important differences in the approach to setting near-term and long-term science-based targets.
The table below summarizes the key elements that vary between near and long-term targets.

Table 7 A comparison of boundary, ambition, timeframe, and methods between near and long-
term targets.

BOUNDARY AMBITION TIMEFRAME METHODS

What is the What is the
What percentage
ambition level in maximum What are the eligible methods
emissions inventory
terms of limiting timeframe to to set targets?
coverage is required?
temperature rise? meet targets?
• Absolute contraction
Scope 1 & 2

• Physical intensity
95% 1.5°C
convergence (SDA)
NEAR-TERM SBTS

• Renewable electricity
• Absolute contraction
5-10 years
• Physical intensity
If >40% of total convergence (SDA)
emissions, 67% Well-below 2°C
• Engagement
coverage
Scope 3

• Economic intensity

• Physical intensity
• Absolute contraction
Scope 1 & 2

• Physical intensity
95%
convergence
LONG-TERM SBTS

• Renewable electricity
2050 latest • Absolute contraction
1.5°C (2040 for the
• Physical intensity
power sector)
convergence
90%
• Renewable electricity
Scope 3

• Economic intensity

• Physical intensity

4.7 CALCULATING NEAR-TERM SCIENCE-BASED TARGETS

Near-term targets covering scopes 1 and 2 can be calculated using absolute contraction or the physical
intensity convergence (SDA) target setting method. Renewable electricity targets are also accepted as
a substitute for targets that cover scope 2. Intensity convergence targets may use any sector-specific
pathways that are available at the time of submission (Table 2) and may be subject to sector-specific
criteria. For in-depth guidance on calculating near-term targets, please see the SBTi Corporate Manual.

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 4.7.1 Calculating long-term science-based targets

Calculating long-term targets is relatively simple because target ambition does not depend on the chosen
target year and targets are less dependent on company input data. Companies must use the SBTi Tool
Excel workbook to calculate long-term science-based targets.

4.7.2 Target wording

Once you have calculated your company’s long-term target, you should consider how the company net-
zero target, as well as the underlying target(s) can be expressed clearly and succinctly. The company net-
zero date is determined by the latest long-term SBT target date. Companies can express their overarching
net-zero targets as:

COMPANY X COMMITS TO REACH NET-ZERO GREENHOUSE GAS EMISSIONS

ACROSS THE VALUE CHAIN BY 2035.

Companies that have used the cross-sector pathway to set an absolute contraction target can simply
express the target as:

COMPANY X COMMITS TO REDUCE SCOPE 1+2+3 EMISSIONS 90% BY 2035

FROM A 2018 BASE YEAR.

Companies that have also set a long-term target on FLAG emissions can include a second target:

COMPANY X ALSO COMMITS TO REDUCE EMISSIONS FROM FORESTRY, AND

LAND-USE AND AGRICULTURE 80% BY 2035 FROM A 2018 BASE YEAR.

Companies that have covered their target boundary with several targets may need to include more detail
in their target wording. First, companies should express their intensity target(s). For example:

COMPANY Y COMMITS TO REDUCE THE SCOPE 1+2 EMISSIONS PER TON OF

STEEL 91% BY 2040 FROM A 2018 BASE YEAR.

Next, companies should express their absolute target(s). Although the SBTi will need to review each
sector-specific target to validate long-term targets, companies may have flexibility combining several
absolute targets that cover the same emissions scope(s) or scope 3 category(s). For example, a company
that has calculated two absolute targets for scope 3 category 3 upstream transport from maritime
transport and aviation, once these pathways are available, may combine them into a single target:

COMPANY Y ALSO COMMITS TO REDUCE SCOPE 3 EMISSIONS FROM

UPSTREAM TRANSPORT BY 88%.

Companies that set an intensity target covering a subset of scope 1+2 emissions and an absolute target
covering the remaining emissions may express the targets as follows:

COMPANY Z COMMITS TO REDUCE SCOPE 1+2 EMISSIONS PER TON OF

CEMENT 80% BY 2040 FROM A 2018 BASE YEAR. COMPANY Z COMMITS TO
REDUCE ALL OTHER SCOPE 1+2 EMISSIONS 90% BY 2040 FROM A 2018 BASE
YEAR.

SBTi Corporate Net-Zero Standard | Version 1.0 | October 2021 29

 Box 3. Can insetting count towards my scope 3 reduction?

There are multiple definitions for the term “insetting” (also referred to as supply chain interventions)
and no standardization of the term, which makes it difficult to give a clear determination of what can
and can’t be included within scope 3 reductions. Insetting is used to describe interventions that are
wholly contained within a scope 3 value chain boundary of a company or interventions partially within
their scope 3 supply chain boundary (spanning their supply chain and other companies’ supply chains).
Accounting approaches for insetting also vary with the use of both project accounting and corporate
accounting.

As this issue has not been settled to date in the GHG Protocol process, the SBTi recommends a
conservative approach at this time. Companies should only include emission reductions or removals
(removals only in the case of FLAG targets) from “insetting” projects that use a corporate accounting
approach and are wholly contained within their supply chains or the portion of a “partially-included”
project that is within their supply chain and linked directly to sourcing.

Further work is ongoing to standardize the definition of insetting/supply chain interventions and clear
accounting methodologies. For these reasons, the SBTi will assess insetting on a case-by-case basis
during the validation process and may not approve their use.

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 5 GUIDANCE FOR
COMPANIES WITH
SIGNIFICANT
FLAG EMISSIONS

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 5 GUIDANCE FOR COMPANIES WITH
SIGNIFICANT FLAG EMISSIONS
Companies in the FLAG sectors are expected to take a different approach to achieving their science-
based targets – one that includes both emission reductions and removals. Several significant projects
are ongoing to support companies in these sectors, and while these developments should not be used
as an excuse to delay action, companies should pay particular attention to these when forming and
implementing their mitigation strategies.

5.1 BACKGROUND ON FLAG EMISSIONS

The FLAG sectors, also known in the scientific community as the agriculture, forest, and other land use
(AFOLU) sector, have been historically difficult to evaluate through GHG accounting and target setting
approaches. However, AFOLU represents about 25% of anthropogenic GHG emissions (10–12 GtCO2e
per year) with about half from agriculture and half from land use, land-use change, and forestry (LULUCF).7
GHG emissions from the FLAG sector need to be halved by 2050, and at the same time agricultural
production is expected to increase 50%.8

The AFOLU sector has the potential to deliver up to 20% of needed mitigation actions from now through
2050, including removals (Griscom et al 2017). Because of this, mitigation in the land sector also requires
accounting for GHG removals (enhancing sinks) due to the potential for forests and soils to store carbon.
GHG removals include restoring natural ecosystems, improving forest management practices, and
enhancing soil carbon sequestration (Roe et al., 2019).

Aligning the AFOLU sector with 1.5°C pathways through both reductions and removals is feasible through
reduced land-use change, enhanced carbon sinks, reduced agricultural emissions, and reduced overall
production through demand shifts.

5.2 LAND SECTOR GUIDANCE IS EVOLVING

Many companies with land-intensive operations have committed or set targets through the SBTi, and
many are also reporting their emissions publicly. Despite this, few companies account for AFOLU
emissions or removals in their targets or disclosures.

A key barrier is the lack of available standards, methods, and data availability. However, land sector
emissions (“biogenic carbon”) accounting and target setting are being standardized through two key
projects led by SBTi partner organizations, and as a result many companies will be addressing these
emissions for the first time.

7 Roe, S., Streck, C., Obersteiner, M. et al. Contribution of the land sector to a 1.5 °C world. Nat. Clim. Chang. 9, 817–828 (2019). [Link]
org/10.1038/s41558-019-0591-9
8 [Link]

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 5.2.1 SBTi FLAG Project

WWF is developing specific mitigation pathways for companies with land sector emissions through
the SBTi Forest, Land and Agriculture (SBTi FLAG) project, which is due to complete by March 2022.
The outputs of this project will allow companies to set science-based targets that fully incorporate
deforestation and land-related emissions.

This guidance is aimed at companies in land-intensive sectors, which includes sectors such as food,
agriculture, and forestry. These new pathways will include not only emissions reduction, but also removals
within the land sector. It includes an overall AFOLU sector mitigation pathway as well as 10 specific
mitigation pathways for major commodities: beef, chicken, dairy, corn, palm oil, pork, rice, soy, wheat,
and wood fiber. All FLAG pathways include CO2 and non-CO2 gases, and include emissions related to
agriculture and forestry ‘to farm gate’, excluding later processing emissions, which are covered under
other SBTi pathways.

5.2.2 Greenhouse Gas Protocol Guidance on Carbon Removals and Land Use

In parallel and in coordination, The Greenhouse Gas Protocol is undertaking a process to develop new
guidance on carbon removals and land use. This project is due for completion at the end of 2022. The
GHG Protocol guidance will provide information to companies on how to account for and report the
following activities in their greenhouse gas inventories:

• Land use/management and land use change

• Carbon removals and storage

• Bioenergy and other biogenic products

• Related topics

While the GHG Protocol guidance for land sector emissions is under development, we recommend
companies refer to the documents in Table 9 below.

Table 9 Additional guidance documents for calculating FLAG emissions

PUBLISHER DOCUMENT
GHG Protocol • Corporate Standard

• GHG Protocol Scope 3 Standard

• Product Standard

• Agriculture Guidance

• LULUCF project guidelines

• Brazil forestry tool

IPCC • Guidelines for National GHG Inventories

• 2006 Guidelines, Good Practice Guidance for LULUCF

• 2019 Refinement
ISO • ISO 14064 1:2018
Quantis • Accounting for Natural Climate Solutions Guidance
Gold Standard • Value Change Initiative

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 5.3 WHICH COMPANIES WILL BE REQUIRED TO SET FLAG TARGETS?
FLAG target-setting will eventually become a requirement for companies with significant land sector
emissions after the GHG Protocol Land Sector and Removals Guidance is published. Although FLAG
target setting guidance has not been finalized, the SBTi expects that companies that meet either of the
following two conditions will be required to set a FLAG-specific target, separate from its target(s) for non-
FLAG emissions:

• Any company from the following SBTi-designated sectors will required to set a FLAG target:

∙ Timber, pulp and paper, rubber, wood or paper secondary processing, food production from
agricultural and/or animal sources, food and beverage processing, food services, and food and
staples retailing.

• Any company with significant FLAG-related emissions (threshold will be defined through the FLAG
project). Land intensive activities are likely to be relevant in the GHG inventories (especially in scope
3, category 1) of companies from the following sectors:

∙ Retailing; tobacco; hotels, leisure, and tourism activities; textiles; cosmetics; and any other
sector or company with significant FLAG-related emissions.

It is important to note that FLAG science-based targets are separate from science-based targets that
cover emissions from energy and industrial processes; consequently, FLAG mitigation cannot be used to
meet non-FLAG targets (e.g., a company cannot bring forests into its value chain to meet another SBT).

5.4 WHAT CAN COMPANIES WITH FLAG EMISSIONS DO RIGHT

NOW?
If your company has already calculated emissions from FLAG activities, these should be included within
the target boundary of both near- and long-term science-based targets.

The SBTi FLAG project, which will provide tools and guidance for companies to set near-term SBTs, is
expected to conclude in March 2022. Before then, companies that wish to set near-term science-based
targets on FLAG emissions may opt to use the absolute contraction approach for all emissions (including
FLAG emissions).

SBTi Corporate Net-Zero Standard | Version 1.0 | October 2021 34

 6 UPDATING AND
COMMUNICATING
TARGETS

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 6 UPDATING AND COMMUNICATING TARGETS
The number of businesses committing to reach net-zero emissions has grown rapidly over the last few
years, and the SBTi understands that many companies have already made commitments to net-zero in
advance of the launch of the Net-Zero Standard.9 The below guidance is designed to help align existing
commitments with the Net-Zero Standard and communicate these changes with stakeholders.

6.1 HOW CAN COMPANIES ENSURE NEAR-TERM TARGETS ALIGN

WITH THE NET-ZERO STANDARD?
In response to the urgency and scale of the climate emergency, the SBTi is ratcheting up its expectations
for businesses by ensuring all targets align with a 1.5°C future. The new strategy is being rolled out in
response to increasing urgency for climate action and the success of science-based targets to date.

From 15 July 2022 onwards, the SBTi will only validate targets aligned with a minimum level of ambition
of 1.5°C for scope 1 and 2 and well-below 2°C for scope 3. In addition to this, the SBTi is reducing the
maximum timeframe for near-term targets from 15 to 10 years.

Please review the new requirements for near-term science-based targets in Table 10 below. If setting
new near-term science-based targets, your company’s targets must meet these criteria to be eligible for
net-zero validation. If your company already has a validated SBT that does not fulfil the ambition criteria for
scope 1 and 2 or scope 3, it must be updated, however, companies will not be required to update targets
to meet the new timeframe requirement.10

For companies with emission reduction targets that do not already align with the changes to near-
term SBTi criteria, we invite you upgrade or submit your science-based target. Companies may also
follow a simplified voluntary ambition update process to if they meet certain conditions. More information
can be found on our website and in the Target Validation Protocol document.

Table 10 Summary of changes to near-term SBTi criteria

CRITERION UPDATES TO CRITERIA

Under the previous versions of the SBTi criteria, near-term science-based
targets could have a target year 5-15 years from the date of submission.
Timeframe
Under V5 of the SBTi criteria, target years must be 5-10 years from the date of
submission.

Scope 1 & The minimum scope 1 and 2 ambition of near-term science-based targets has
2 ambition increased from well-below 2°C to 1.5°C

The minimum scope 3 ambition of near-term science-based targets has

Scope 3
increased from 2°C to well-below 2°C. Supplier engagement targets will remain
ambition
eligible.

9 Analysis by Climate Action Tracker tells us that 73% of global emissions are covered by net-zero targets, and the ECIU and Oxford’s March 2021 report
showed that, of the 2,000 publicly-traded companies included in the Forbes Global 2000 list, 21% of these companies had net-zero targets.
10 Companies that committed to the Business Ambition for 1.5˚C via Option 2 may still gain validation for their net-zero targets if their targets
are aligned to well-below 2˚C, however these targets must be eventually upgraded. Please see the BA1.5˚C campaign FAQ for more details.

SBTi Corporate Net-Zero Standard | Version 1.0 | October 2021 36

 6.2 HOW CAN COMPANIES ENSURE LONG-TERM TARGETS ALIGN
WITH THE NET-ZERO STANDARD?
An essential component of a corporate net-zero strategy is a long-term science-based target. While
companies may reach a balance between emissions and removals before they reach the depth of
decarbonization required to limit warming to 1.5ºC, this is a transient state on the journey to net-zero
emissions. Companies must reduce emissions to this level before claiming to have reached net-zero. In
other words, a company’s net-zero target date may not come before its long-term science-based target
date.

For companies that have not set long-term emission reduction targets, we encourage you to model
long-term science-based targets and validate them through the SBTi to demonstrate commitment to
aligning with science as part of your net-zero ambition.

For companies that have set long-term emission reduction targets to reach net-zero that are not
as ambitious as long-term science-based targets, we recommend that you model long-term science-
based targets, revisit your implementation strategy, and consider the possibility of increasing the ambition
of your current long-term targets to align with science.

For companies that have set net-zero target dates but feel they will be unable to reach the level of
emission reductions required by their long-term science-based target in that timeframe, we advise
that you review your implementation strategies to explore additional opportunities to reduce emissions as
a first step. If you expect you will not be able to meet the required level of emission reductions by that date,
the next option is to consider moving the net-zero target date further into the future.

6.3 HOW TO COMMUNICATE WITH STAKEHOLDERS WHEN NET-

ZERO TARGETS DO NOT MEET THE NET-ZERO STANDARD
REQUIREMENTS
We understand that when companies have already set net-zero targets, navigating communication with
stakeholders can be challenging if current targets do not comply with the Net-Zero Standard. In this
section, we provide advice and guidance on how to communicate with stakeholders in this situation.

We have developed some messages to support companies with this process below. Please note that
these are only suggestions and companies may adapt these points to suit their needs.

• To be confident that our actions are in line with climate science and mitigate the risk of following a
pathway that may not be consistent with addressing the climate crisis, we have reviewed our net-zero
targets against the SBTi’s Net-Zero Standard.

• As part of this process, we have identified clear next steps to adjust our current commitment and/
or target(s) to align with this first global science-based Net-Zero Standard. We believe this will help
ensure the robustness and impact of our targets.

• Responding to the urgency and scale of the climate emergency, the SBTi is ratcheting up its
expectations for businesses. To support this, we must listen to the science and enhance the ambition
of our net-zero commitment.

• We are committed to following a science-based net-zero pathway, and as part of this, we are
reviewing our climate mitigation strategy to understand opportunities to enhance our ambition.

SBTi Corporate Net-Zero Standard | Version 1.0 | October 2021 37

 7 THE NET-ZERO
STANDARD
CRITERIA

SBTi Corporate Net-Zero Standard | Version 1.0 | October 2021 38

 7 THE NET-ZERO STANDARD CRITERIA

7.1 BACKGROUND TO THE NET-ZERO STANDARD CRITERIA

The Net-Zero Standard Criteria were developed through extensive stakeholder consultation, in
collaboration with the Net-Zero Expert Advisory Group. The Net-Zero Standard Criteria include all
criteria that must be met for net-zero target(s) to be validated by the SBTi. This document also includes
recommendations which are important for transparency and best practice but are not required.

Although this document contains all criteria for setting near-term science-based targets, companies
should refer to the SBTi Criteria as their primary reference when setting near-term science-based targets.
The SBTi Criteria document also includes additional recommendations for near-term targets that are not
included in this document. It is important to note that near-term criteria and recommendations are subject
to SBTi’s annual update of corporate criteria.

These criteria apply only to companies that are not classified as financial institutions and Small and
Medium Enterprises (SMEs). Financial institutions can set targets using the SBTi guidance and criteria for
financial institutions. SMEs should use the streamlined process to set targets in line with climate science.

In addition, companies must follow the GHG Protocol Corporate Standard, Scope 2 Guidance, and
Corporate Value Chain (Scope 3) Accounting and Reporting Standard.

The Target Validation Protocol describes the underlying principles, process, and criteria followed to
assess targets and to determine conformance with Criteria11. The SBTi strongly recommends that
companies review Table 7 in the Target Validation Protocol that further details SBTi criteria compliance
and non-compliance before developing targets.

7.2 DISCLAIMER
While every effort is made to keep companies informed of the latest criteria and recommendations,
the initiative reserves the right to make adjustments as needed to reflect the most recent emissions
scenarios, partner organization policies, and greenhouse gas accounting practices.

The initiative also reserves the right to withdraw the validation of an approved target if it becomes
apparent that incorrect information was communicated during the target validation process that results in
any of the criteria existing during the assessment not being met, or if requirements following the approval
of the target are not respected (i.e., target progress reporting and recalculations).

Unless otherwise noted (including specific sections), all criteria apply to scopes 1, 2, and 3.

7.3 TERMINOLOGY
This document explains the criteria, which are requirements that companies must follow, and
recommendations, which companies should follow, to align with the Net-Zero Standard. This document

11 The TVP currently only applies to near-term SBT criteria but is expected to be updated to include net-zero targets in the coming months.

SBTi Corporate Net-Zero Standard | Version 1.0 | October 2021 39

 uses precise language to indicate requirements, recommendations, and allowable options that companies
may choose to follow.

• The terms “shall” or “must” are used throughout this document to indicate what is required for
targets to be in conformance with the Net-Zero Standard.

• The term “should” is used to indicate a recommendation, but not a requirement.

• The term “may” is used to indicate an option that is permissible or allowable.

The terms “required” or “must” are used in the guidance to refer to requirements. “Can” and “is
encouraged” may be used to provide recommendations on implementing a requirement or “cannot” may
be used to indicate when an action is not possible.

7.4 GENERAL CRITERIA
7.4.1 Target boundary

[Link] Organizational boundary

C1 — Organizational boundary: It is recommended that companies submit targets only at the parent-
or group level, not the subsidiary level. Parent companies must include the emissions of all subsidiaries
in their target submission, in accordance with the boundary criteria above. In cases where both parent
companies and subsidiaries submit targets, the parent company’s target must also include the emissions
of the subsidiary if it falls within the parent company’s emissions boundary given the chosen inventory
consolidation approach12.

R1 – Setting organizational boundaries: The SBTi strongly recommends that a company’s organizational
boundary, as defined by the GHG Protocol Corporate Standard, is consistent with the organizational
boundary used in the company’s financial accounting and reporting procedures.

[Link] GHG coverage

C2 — Greenhouse gases: The targets must cover all relevant GHGs as required per the GHG Protocol
Corporate Standard.

[Link] Scope coverage

C3 — Scope 1 and Scope 2: The targets must cover company-wide scope 1 and scope 2 emissions, as
defined by the GHG Protocol Corporate Standard

C4 — Scope 3: If a company’s relevant scope 3 emissions are 40% or more of total scope 1, 2, and 3
emissions, scope 3 must be included in the near-term science-based targets. All companies involved in
the sale or distribution of natural gas and/or other fossil fuels shall set scope 3 targets for the use of sold
products, irrespective of the share of these emissions compared to the total scope 1, 2, and 3 emissions
of the company. All companies shall include emissions from all relevant scope 3 categories in long-term
science-based targets.

12 This criterion applies only to subsidiaries. Brands, licensees, and/or specific regions or business divisions of a company will not be accepted
as separate targets unless they fall outside of a parent company’s chosen consolidation approach

SBTi Corporate Net-Zero Standard | Version 1.0 | October 2021 40

 [Link] Emissions coverage

C5 — Scope 1 and 2 significance thresholds: Companies may exclude up to 5% of scope 1 and scope 2
emissions combined in the boundary of the inventory and target13.

C6 — Scope 3 emissions coverage for near-term targets: Companies must set one or more emission
reduction targets and/or supplier or customer engagement targets that collectively cover(s) at least
two-thirds (67%) of total scope 3 emissions considering the minimum boundary of each category in
conformance with the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting
Standard.

C7 — Scope 3 emissions coverage for long-term targets: The boundary of long-term science-based
targets shall cover at least 90% of total scope 3 emissions. Exclusions in the GHG Inventory and target
boundary must not exceed 10% of total scope 3 emissions.

R2 — Targets covering optional scope 3 emissions: Targets to reduce scope 3 emissions that fall
outside the minimum boundary of scope 3 categories are not required but are encouraged when these
emissions are significant. Companies may cover these emissions with a scope 3 target, but such targets
cannot count towards the thresholds defined in C6 and C7 for scope 3 emissions (i.e., these targets are
above and beyond the company’s scope 3 targets). For reference, consult page 48 in the GHG Protocol
Scope 3 Standard and the Target Validation Protocol for a list of products that generate direct and indirect
use-phase emissions.

7.4.2 Method validity (near and long-term targets)

C8 — Method validity: Targets must be modelled using the latest version of methods and tools approved
by the initiative. Targets modelled using previous versions of the tools or methods may only be submitted
to the SBTi for validation within 6 months of the publication of the revised method or the publication of
relevant sector-specific tools.

7.4.3 Emissions accounting requirements

C9 — Scope 2 accounting approach: Companies shall disclose whether they are using a location- or
market-based accounting approach as per the GHG Protocol Scope 2 Guidance to calculate base year
emissions and to track performance against a science-based target. GHG Protocol requires measuring
and reporting scope 2 emissions using both approaches. However, a single and consistent approach
shall be used for setting and tracking progress toward a SBT (e.g., using location-based approach for both
target setting and progress tracking).

C10 – Scope 3 screening: Companies must complete a scope 3 inventory covering gross scope 3
emissions for all its emissions sources as set out as the minimum boundary of each scope 3 category per
the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard14.

C11 — Bioenergy accounting: CO2 emissions from the combustion, processing and distribution phase
of bioenergy and the land use emissions and removals15 associated with bioenergy feedstocks, shall

13 Where a company’s scope 1 or 2 emissions are deemed immaterial (i.e., under 5% of total combined scope 1 and 2 emissions), companies
may set their SBT solely on the scope (either scope 1 or scope 2) that covers more than 95% of the total scope 1 and 2 emissions. The
company must continue to report on both scopes and adjust their targets as needed, in accordance with the GHG Protocol’s principle of
completeness and as per C32 and C33.
14 For a definition of the minimum boundaries of scope 3 categories and emissions sources that fall outside the minimum boundaries, see
Table 5.4 (page 35) of the Corporate Value Chain (Scope 3) Accounting and Reporting Standard.
15 The positive impact of exceeding zero emissions due to biogenic removals shall not be accounted for in a company’s target formulation or
as progress towards SBTs. In addition, removals that are not directly associated with bioenergy feedstock production are not accepted to
count as progress towards SBTs or to net emissions in a company’s GHG inventory.

SBTi Corporate Net-Zero Standard | Version 1.0 | October 2021 41

 be reported alongside a company’s GHG inventory. Furthermore, CO2 emissions from the combustion,
processing and distribution phase of bioenergy and the land use emissions and removals associated
with bioenergy feedstocks shall be included in the target boundary when setting a science-based
target (in scopes 1, 2, and/or 3, as relevant) and when reporting progress against that target.

Land-related emissions accounting shall include CO2 emissions from direct land use change (LUC) and
non-LUC emissions, inclusive of N2O and CH4 emissions from land use management. Including emissions
associated with indirect LUC is optional.

Companies are expected to adhere to any additional GHG Protocol Guidance on bioenergy accounting
when released in order to maintain compliance with C11.

C12 — Carbon credits: The use of carbon credits must not be counted as emission reductions toward
the progress of companies’ near-term or long-term science-based targets. Carbon credits may only be
considered to be an option for neutralizing residual emissions (see C28) or to finance additional climate
mitigation beyond their science-based emission reduction targets (see R10).

C13 — Avoided emissions: Avoided emissions fall under a separate accounting system from corporate
inventories and do not count toward near term or long-term science-based emission reduction targets.

R4 – Biofuel certification: The SBTi recommends that companies using or producing biofuel(s) for
transport should support their bioenergy GHG accounting with recognized biofuel certification(s) to
disclose that the data on land-related emissions and removals represents the relevant biofuel feedstock
production.

R5 — Bioenergy data reporting: The SBTi recommends that companies report direct biogenic CO2
emissions and removals from bioenergy separately. Emissions and removals of CO2 associated with
bioenergy shall be reported as net emissions according to C11, at a minimum, but companies are
encouraged to also report gross emissions and gross removals from bioenergy feedstocks.

7.5 NET-ZERO TARGET FORMULATION

7.5.1 Net-zero definition

C14 — State of net-zero emissions: Companies shall set one or more targets to reach a state of net-
zero emissions, which involves: (a) reducing their scope 1, 2 and 3 emissions to zero or to a residual level
that is consistent with reaching net-zero emissions at the global or sector level in eligible 1.5°C scenarios
or sector pathways and; (b) neutralizing any residual emissions at the net-zero target date and any GHG
emissions released into the atmosphere thereafter.

7.5.2 Structure

C15 — Net-zero target structure: Companies that aim to reach a state of net-zero emissions in a
timeframe that exceeds 10 years, shall set both, near-term and long-term science-based emission
reduction targets according to the requirements and recommendations described in this standard. If
a company’s near-term target meets the ambition requirements of a long-term target, then a long-term
target is not required.

SBTi Corporate Net-Zero Standard | Version 1.0 | October 2021 42

 7.5.3 Timeframe

C16 — Base year: The company shall use the same base year for its long-term science-based targets as
its near-term SBTs. The base year must be no earlier than 2015.

C17 — Target year(s): Near-term targets must cover a minimum of 5 years and a maximum of 10 years
from the date the target is submitted to the SBTi for official validation. Long-term targets shall have a target
year no later than 2050. For companies in sectors that reach net-zero before 2050 (e.g., power generation),
long-term SBTs covering relevant activities must have a target year no later than the sector’s year of net-
zero in eligible 1.5˚C pathways

C18 — Progress to date: The minimum forward-looking ambition of near-term targets is consistent with
reaching net-zero by 2050 at the latest, assuming a linear absolute reduction, linear intensity reduction,
or intensity convergence between the most recent year and 2050 (not increasing absolute emissions or
intensity)16.

R6 — Consistency: It is recommended that companies use the same base years for all near-term targets

7.5.4 Ambition

[Link] Scope 1 and 2 near- and long-term targets

C19 —Level of ambition for scope 1 and 2 targets: At a minimum, scope 1 and scope 2 targets must
be consistent with the level of decarbonization required to keep global temperature increase to 1.5°C
compared to pre-industrial temperatures. This applies to both near-term and long-term targets

C20 — Absolute targets: Absolute targets for scope 1 and scope 2 are eligible when they are at least as
ambitious as the minimum of the approved range of emissions scenarios consistent with the 1.5°C goal or
aligned with the relevant 1.5°C sector-specific absolute pathway (long-term targets only).

C21 — Intensity targets: Intensity targets for scope 1 and scope 2 emissions are eligible when they are
modelled using an approved sector pathway applicable to companies’ business activities.

[Link] Scope 3 near- and long-term targets

C22 — Level of ambition for scope 3 emissions reductions targets: At a minimum, near-term scope 3
targets (covering the entire value chain or individual scope 3 categories) must be aligned with methods
consistent with the level of decarbonization required to keep global temperature increase well-below
2°C compared to pre-industrial temperatures. For long-term scope 3 targets, this minimum ambition is
increased to 1.5°C.

C23 – Supplier or customer engagement targets: Near-term targets to drive the adoption of science-
based emission reduction targets by their suppliers and/or customers are in conformance with SBTi
criteria when the following conditions are met:

• Boundary: Companies may set engagement targets around relevant and credible upstream or
downstream categories.

• Formulation: Companies shall provide information in the target language on what percentage of
emissions from relevant upstream and/or downstream categories is covered by the engagement
16 For targets submitted for validation in 2022, the most recent inventory data submitted must be for 2019 at the earliest. Historically, the SBTi
has only allowed two years prior as valid most recent year inventories, however, due to the COVID-19 pandemic, the SBTi will accept 2019
inventories in 2022

SBTi Corporate Net-Zero Standard | Version 1.0 | October 2021 43

 target or, if that information is not available, what percentage of annual procurement spend is
covered by the target.

• Timeframe: Companies’ engagement targets must be fulfilled within a maximum of 5 years from the
date the company’s target is submitted to the SBTi for an official validation17.

• Level of ambition: The company’s suppliers/customers shall have science-based emission

reduction targets in line with SBTi resources.

C24 – Absolute targets (scope 3): Absolute targets for scope 3 are eligible when they are at least as
ambitious as the minimum of the approved range of emissions scenarios consistent with the well-below
2°C goal (near-term targets), the 1.5°C goal (long-term targets), or aligned with the relevant 1.5°C sector-
specific absolute pathway (long-term targets only).

C25 – Intensity targets (scope 3): Intensity targets for scope 3 are eligible when they are modelled using
an approved sector-specific physical intensity pathway where applicable to companies’ business activities
or using eligible physical intensity or economic intensity approaches. This applies to both, near-term and
long-term targets. Intensity targets on upstream scope 3 categories must reflect both supply-side and
demand-side mitigation levers, where specified by sector-specific guidance.

R7 – Supplier engagement: Companies should recommend that their suppliers use the SBTi guidance
and tools available to set science-based targets. SBTi validation of supplier science-based targets is
recommended but not required. It is recommended that suppliers classified as SMEs, submit targets
through the SME streamlined route.

[Link] Combined targets (near and long-term targets)

C26 — Combined scope targets: Targets that combine scopes (e.g., 1+2, 1+2+3) are permitted if the
SBTi can review the ambition of the individual components of the target and confirm that each individual
component meets the relevant ambition criteria.

[Link] Renewable electricity targets (near and long-term targets)

C27 — Renewable electricity: Targets to actively source renewable electricity at a rate that is consistent
with 1.5°C scenarios are an acceptable alternative to scope 2 emission reduction targets. The SBTi has
identified 80% renewable electricity procurement by 2025 and 100% by 2030 as thresholds (portion of
renewable electricity over total electricity use) for this approach in line with the recommendations of
RE100. Companies that already source electricity at or above these thresholds shall maintain or increase
their use of renewable electricity to qualify.

R8 — Purchased heat and steam: For science-based target modeling purposes using the SDA, it is
recommended that companies model purchased heat and steam related emissions as if they were part of
their direct (i.e., scope 1) emissions.

R9 — Efficiency considerations for target modeling: If companies are using a method that does not
already embed efficiency gains for the specific sector, market, and the decarbonization projected for
the power sector based on 1.5°C scenario, it is recommended that these factors be considered when
modeling electricity-related scope 2 targets.

17 For targets submitted for an official validation in the first half of 2022, the valid target years are up to 2026 inclusive. For those submitted in
the second half of 2022, valid target years are up to 2027 inclusive.

SBTi Corporate Net-Zero Standard | Version 1.0 | October 2021 44

 7.5.5 Beyond value chain mitigation

R10 — Beyond value chain climate mitigation: Companies should take action or make investments
outside their own value chains to mitigate GHG emissions in addition to their near-term and long-term
science-based targets. For example, a company could provide annual support to projects, programs
and solutions that provide quantifiable benefits to climate, especially those that generate additional
co-benefits for people and nature. Companies should report annually on the nature and scale of those
actions pending further guidance.

7.5.6 Neutralization

C28 — Neutralization of unabated emissions to reach net-zero: Companies shall remove carbon from
the atmosphere and permanently store it to counterbalance the impact of any unabated emissions that
remain once companies have achieved their long-term science-based target, and thereafter.

R11 — Neutralization milestones: Companies should disclose information such as planned milestones
and near-term investments that demonstrate the integrity of commitments to neutralise unabated
emissions at net-zero.

7.5.7 Target formulation

C29 - Target formulation: Companies shall publicly set a net-zero target, that clearly and transparently
communicates each of the relevant components of the target, including: (a) net-zero target year; (b)
magnitude of emissions reductions that will be achieved for near-term and long-term SBTs; (c) base year.

7.6 REPORTING, RECALCULATION AND TARGET VALIDITY

7.6.1 Reporting

C30 —Frequency: The company shall publicly report its company-wide GHG emissions inventory and
progress against published targets on an annual basis.

C31 — Reporting completeness: Companies shall publicly report information pertaining to progress
against validated targets, including separately reporting emissions and removals in the annual GHG
Inventory, as specified by current SBTi Criteria.

R12 — Where to disclose: There are no specific requirements regarding where the inventory and
progress against published targets should be disclosed, as long as it is publicly available. The SBTi
recommends disclosure through standardized, comparable data platforms such as CDP’s climate change
annual questionnaire, though annual reports, sustainability reports and the company’s website are
acceptable.

7.6.2 Recalculation and target validity

C32 — Mandatory target recalculation: To ensure consistency with the most recent climate science and
most current SBTi criteria, targets must be reviewed, and if necessary, recalculated and revalidated, at a
minimum every 5 years. For companies with targets approved in 2020 or earlier, targets must be reviewed
and revalidated, if necessary, by 2025. Companies with an approved target that requires recalculation
must follow the most recent applicable criteria at the time of resubmission.

SBTi Corporate Net-Zero Standard | Version 1.0 | October 2021 45

 C33 — Triggered target recalculation: Targets shall be recalculated, as needed, to reflect significant
changes that could compromise relevance and consistency of the existing target. The following changes
shall trigger a target recalculation:

• Scope 3 emissions become 40% or more of aggregated scope 1, 2 and 3 emissions (this criterion
only applies to near-term SBTs)

• Emissions of exclusions in the inventory or target boundary change significantly

• Significant changes in company structure and activities (e.g., acquisitions, divestitures, mergers,
insourcing or outsourcing, shifts in goods or service offerings)

• Significant adjustments to the base year inventory or changes in data to set targets such as growth
projections (e.g., discovery of significant errors or several cumulative errors that are collectively
significant)

Other significant changes to projections/assumptions used in setting the science-based targets.

C34— Target validity: Companies with approved targets must announce their target publicly on the SBTi
website within 6 months of the approval date. Targets unannounced after 6 months must go through the
approval process again unless a different publication time frame has been agreed in writing with the SBTi.

R13 — Validity of target projections: The SBTi recommends that companies check the validity of target-
related projections on an annual basis. The company should notify the SBTi of any significant changes and
report these major changes publicly, as relevant.

7.7 SECTOR-SPECIFIC GUIDANCE
C35 — Requirements from sector-specific guidance: Companies must follow requirements for target
setting and minimum ambition levels as indicated in relevant sector-specific methods and guidance
at the latest, 6 months after the sector guidance publication. A list of the sector-specific guidance and
requirements is available below, in the Target Validation Protocol, and the SBTi Corporate Manual.

7.7.1 Fossil fuel sales, distribution, and other business

C36 – Companies in the fossil fuel production business or with significant revenue from fossil fuel
business lines: Companies involved in exploration, extraction, mining and/or production of oil, natural gas,
coal as well as other fossil fuels cannot get their targets validated at this stage, irrespective of percentage
revenue generated by these activities. Companies which derive 50% or more of their revenue from fossil
fuels cannot have their targets validated at this time and must follow the respective sector methodology
once published.

C37 — Sale, transmission, distribution of oil, natural gas, coal as well as other fossil fuels: Companies
that sell, transmit, or distribute natural gas or other fossil fuel products shall set emission reduction
scope 3 targets for the “Use of sold products” category that are at a minimum consistent with the level
of decarbonization required to keep global temperature increase to 1.5°C compared to pre-industrial
temperatures. Customer engagement targets as described in C23 are not applicable for this criterion.
More guidance is detailed in C36 on the 50% revenue threshold for companies with fossil fuel activities.

SBTi Corporate Net-Zero Standard | Version 1.0 | October 2021 46

 8 SECTOR GUIDANCE
FOR LONG-TERM
SCIENCE-BASED
TARGETS

SBTi Corporate Net-Zero Standard | Version 1.0 | October 2021 47

 8 SECTOR GUIDANCE FOR LONG-TERM
SCIENCE-BASED TARGETS
Sector-specific guidance and methods are currently available for many sectors. All new sector-specific
guidance that becomes available will be uploaded to the sector development page on the SBTi website.
The SBTi has sector-specific requirements related to the use of target-setting methodologies and
minimum ambition levels.

Table 12 Sector-specific guidance for long-term SBTs.

SECTOR ELIGIBLE METHODS GUIDANCE/NOTES

APPAREL AND
Optional guidance is available for
FOOTWEAR
See “All other sectors” companies in the Apparel and Footwear
sector.

Real Estate Investment Trusts (REITs)

wishing to set targets must specify if they
are a mortgage-based REIT or equity-
When setting long-term SBTs,
based REIT. Equity REITs must pursue
companies in these sectors are
the regular target validation route for
BUILDINGS recommended to set absolute or
companies. Mortgage REITs must instead
intensity targets using the residential
utilize the Financial Institutions guidance
buildings pathway, service buildings
for setting SBTs.
pathway, or cross-sector pathway
(absolute targets only).
The SBTi is in the scoping phase of
developing guidance for companies and
sectors of the built environment.
When setting long-term SBTs,
CEMENT companies are recommended to set The SBTi is in the scoping phase of
absolute or intensity targets using developing guidance for companies in the
the cement pathway, or cross-sector cement sector.
pathway (absolute targets only).

CHEMICALS The SBTi is in the scoping phase of

See “All other sectors” developing guidance for companies in the
chemicals sector.

SBTi Corporate Net-Zero Standard | Version 1.0 | October 2021 48

 The initiative defines a financial institution
as one that engages in investment
activities as part of its core functions.
These include, but are not limited to, the
following:

1. Asset management/asset owners

FINANCIAL The SBTi is developing a Net-Zero 2. Retail and commercial banking

INSTITUTIONS Standard for financial institutions and activities
cannot validate targets for this sector
3. Insurance companies (when
before the guidance is completed.
functioning asset managers)

4. Mortgage real estate investment trusts

(REITs)

In addition, if at least 5% of a company’s

revenue comes from activities such as
those described above, they would be
considered a financial institution.
Some companies will be required to
set FLAG targets that are separate
from their SBTs covering all other
emissions. FLAG targets must use
the FLAG-sector pathway (absolute
FOREST, LAND-USE targets) or a commodity pathway
& AGRICULTURE (intensity targets).
The FLAG sector guidance is expected to
(FLAG)
be finalized in March 2022.
Commodity pathways will be
available for beef, dairy, pork, chicken,
roundwood, rice, soy, palm oil, maize,
and wheat. Forestry and timber
companies will be required to use
the intensity convergence method for
roundwood.

Companies must set targets for scope 3

FOSSIL FUEL SALE/ In addition to guidance for the
category 11, irrespective of the share of
TRANSMISSION/ primary sector, scope 3 targets must
these emissions compared to the total
DISTRIBUTION18 be set on scope 3 category 11 “use
S1+S2+S3 emissions of the company.
of sold products” emissions using
Separate scope 3 targets may need to be
absolute contraction.
set in this case.

18 This information is only applicable to companies that receive less than 50% of their revenue from fossil fuel sale, transmission, or distribu-
tion. For companies that receive 50% or more of their revenue from these activities, please refer to the Oil & Gas section above

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 INFORMATION AND
COMMUNICATION
TECHNOLOGY Optional guidance is available for
See “All other sectors”
PROVIDERS companies in the ICT sector.

When setting long-term SBTs,

companies in these sectors are
IRON AND STEEL The SBTi is in the scoping phase of
recommended to set absolute or
developing guidance for companies in the
intensity targets using the iron
steel sector.
and steel pathway, or cross-sector
pathway (absolute targets only).
For target validation by the SBTi, “Oil
& Gas” includes, but is not limited
to, integrated Oil & Gas companies,
Integrated Gas companies, Exploration
& Production companies, Refining and
Marketing companies, Oil Products
Distributors, Gas Distribution and Gas
The SBTi is developing target-setting
OIL & GAS Retailers.
methods for oil & gas companies and
cannot validate targets for this sector
The SBTi will assess companies on a
before the guidance is completed.
case-by-case basis to determine whether
companies will be classified as Oil & Gas
companies for SBTi validation, and if so,
reserve the right to not move forward
with their validation until after the SBTi
Oil & Gas sector development has been
completed.
Companies in the power sector with
scope 3 emissions that represent 40%
or more of overall emissions must set an
intensity target covering all sold electricity
POWER The intensity convergence method
(including purchased and resold electricity
GENERATION must be used by power generation
in scope 3 category 3), in addition to a
companies, as specified in the
target covering power generation in scope
Guidance for Electric Utilities.
1.

Companies in this sector must set targets

to reach net-zero no later than 2040.

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 Refer to the SBTi Transport guidance for
a description of all transport sub-sectors
covered by the SDA Transport tool and to
TRANSPORT learn about best practices in target-setting
SERVICES for transport activities.
(AVIATION/
SHIPPING/ Well-to-wheel boundary (transport
TRUCKS/ CARS) services and OEMs):

When setting long-term SBTs,

Companies setting targets for transport-
companies in these sectors are
related emissions should cover well-to-
recommended to set absolute or
wheel emissions (WTW) in their target
intensity targets using the aviation
boundary to accurately capture emissions
pathway, maritime transport pathway,
shifts between the tank-to-wheel
or cross-sector pathway (absolute
(TTW) and the well-to-tank (WTT), for
targets only). The target boundary
example, due to changes in power train
must cover well-to-wheel emissions
technologies.
(WTW), as specified in the SBTi
transport resources. Tested vs. Real emissions (OEMs):
TRANSPORT
Companies may not set intensity Original equipment manufacturers must
(ORIGINAL
targets covering scope 3 category 6 convert their base year emissions figures
EQUIPMENT
(business travel) using the aviation for the use-phase of their products into
MANUFACTURERS/
sector pathway real emissions with the use of global
AUTOMAKERS)
standards when available (e.g., Worldwide
Harmonized Light Vehicle Test Procedure
-WLTP). In the absence of a normalized
test procedure for certain vehicle types,
companies are invited to present and
justify their own estimates/simulations
based on fuel consumption-specific duty
cycles to the SBTi.
Companies should allocate emissions to
relevant activities as per the Greenhouse
When setting long-term SBTs,
Gas Protocol, where guidance is available.
companies in all other sectors are
Emissions in scopes 1, 2, or 3 allocated to
ALL OTHER recommended to set absolute targets
activities with a sector-specific pathway
SECTORS using the cross-sector pathway.
(e.g., steel production) may be covered
Sector-specific absolute or intensity
by a sector-specific absolute or intensity
targets may be used instead for
target, except for upstream scope 3
emissions allocated to a relevant
categories where supply-side mitigation
sector.
is important and not reflected by the
pathway.

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 9 ACRONYMS

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 9 ACRONYMS
AFOLU Agriculture, Forest and Other Land Use
BVCM Beyond value chain mitigation
CDR Carbon Dioxide Removal
COP Conference of the Parties
DAC Direct Air Capture
EAG SBTi Net-Zero Expert Advisory Group
FLAG Forests, Land and Agriculture
GHG Greenhouse Gas
IPCC Intergovernmental Panel on Climate Change
LUC Land-use change
LULUCF Land-use, Land-use change and Forestry
NBS Nature-based solutions
PPA Power purchase agreement
REC Renewable energy certificate
REDD Reducing Emissions from Deforestation and Degradation
REIT Real Estate Investment Trusts
SR15 IPCC Special Report on 1.5˚C
SAG SBTi Scientific Advisory Group
SBT Science-based target
SBTi Science Based Targets initiative
SDA Sectoral Decarbonization Approach
SME Small & medium sized enterprises
TAG SBTi Technical Advisory Group
UNEP The United Nations Environment Program
UNFCCC United Nations Framework Convention on Climate Change
vPPA Virtual power purchase agreement

SBTi Corporate Net-Zero Standard | Version 1.0 | October 2021 53

 10 GLOSSARY

SBTi Corporate Net-Zero Standard | Version 1.0 | October 2021 54

 10 GLOSSARY

Term Definition Comments

Measures that companies take to prevent, reduce or

eliminate sources of GHG emissions within their value Also see:
Abatement
chain. Examples include reducing energy use, switching to Decarbonization
renewable energy and retiring high-emitting assets.

Absolute Method used to calculate absolute emissions reduction

contraction targets that requires organizations to reduce annual Also see:
emissions by an amount consistent with underlying Science-based target methods
mitigation pathways.

Examples of BVCM include,

but are not limited to:

Forestry, e.g., Jurisdictional

REDD+

Conservation projects, e.g.,

peatland or mangrove

Mitigation action or investments that fall outside a Energy efficiency, e.g.,

company’s value chain. This includes activities outside of cookstove projects
a company’s value chain that avoid or reduce greenhouse
Beyond value chain
gas emissions, or that remove and store greenhouse gases Methane destruction, e.g.,
mitigation (BVCM)
from the atmosphere. landfill gas projects

Renewable energy, e.g., solar/

wind/biogas

Industrial gases, e.g., N2O

destruction at nitric acid
facilities

Scale-up of CDR technologies,

e.g., Direct Air Capture (DAC)
and Storage

Energy generated from the combustion of biomass. In

certain cases, bioenergy is considered “carbon neutral”
Bioenergy because combustion-related CO2 emissions are balanced
by CO2 that is sequestered during the growth of bioenergy
feedstock.

Organic material both aboveground and belowground, and

both living and dead, e.g., trees, crops, grasses, tree litter,
Biomass emissions
roots etc. Biomass includes the pool definition for above -
and below - ground biomass.

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 According to the Intergovernmental Panel on Climate
Change (IPCC), “anthropogenic activities removing CO2
Carbon Dioxide
from the atmosphere and durably storing it in geological,
Removal (CDR)
terrestrial, or ocean reservoirs, or in products”. The
removals are either nature-based, geological or a hybrid.

Also see:
Climate change
According to the Intergovernmental Panel on Climate
mitigation Corporate Climate Mitigation
Change (IPCC), “a human intervention to reduce emissions
Blueprint
or enhance the sinks of greenhouse gases.”
Mitigation strategy

SBTi is eliminating the

term from use within its
Compensation documentation.
(legacy terminology
Actions that companies take to help society avoid or reduce Also see:
used in earlier
emissions outside of their value chain.
versions of the SBTi GHG emissions
Net-Zero Standard)
Offsetting
Value chain emissions

Also see:
Goals set by a corporation to reduce the corporation’s
impact on the climate. Targets may include a variety Abatement
Corporate climate
of climate forcers across different corporate activities
targets Compensation
(i.e., operations, value chain, or products) and may use
emissions abatement, compensation, or neutralisation
Neutralisation

One-size-fits all pathway for companies to calculate near-

Cross-sector term and long-term absolute contraction SBTs, eligible for Also see:
pathway all companies except those in the power sector or FLAG Sector-specific pathway
sectors

Also see:
The process by which CO2 emissions associated
Decarbonization with electricity, industry, and transport are reduced or Abatement
eliminated.

Also see:
Emissions (or GHG)
According to the GHG Protocol, a “quantified list of an Scope 1 inventory
inventories
organization’s GHG emissions and sources.” Emissions
inventories typically include emissions in scopes 1, 2, and 3. Scope 2 inventory
Scope 3 inventory

GHG emissions from Forestry, Land use and Agriculture.

Examples of key sources of FLAG emissions include
Other similar related terms
deforestation, forest & grassland fires enteric fermentation,
are Agriculture, Forestry and
Forests, land and fertilizers, manure management and rice cultivation
Other Land uses (AFOLU) and
agriculture (FLAG)
Land-use, Land-use change
emissions Reducing FLAG emissions, as well as enhancing
and Forestry (LULUCF; AFOLU
land-related carbon sinks through activities such as
+ agriculture GHGs)
reforestation, is an important climate change mitigation
opportunity.

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 A cumulative emissions threshold that must not be Also see:
Global emissions exceeded to limit global temperature rise by a specified
Greenhouse gases
budget amount and probability. Emissions budgets can be
determined for CO2 only or all greenhouse gases (GHGs). Paris Agreement

Gases which absorb and re-emit infrared radiation, thereby

trapping it in Earth’s atmosphere. Includes carbon dioxide
Greenhouse gases
(CO2), water vapor, methane (CH4), nitrous oxide (N2O),
(GHGs)
hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur
hexafluoride (SF6), and nitrogen trifluoride (NF3).

Greenhouse Gas Also see:

Goals set by an organization to reduce direct or indirect
(GHG) emission
emissions by a specified amount Greenhouse Gas emissions
reduction targets

Insetting is used to describe projects that are wholly

contained within a Scope 3 supply chain boundary of a There are multiple definitions
company, a project partially within their Scope 3 supply for the term “insetting” in use
Insetting
chain boundary (spanning their supply chain and other and no standardization of the
companies’ supply chains) and a project adjacent to a term.
supply chain boundary.

Also see:
Method used to calculate emissions intensity targets based
Intensity
on the principle of converging to a sector-wide physical Science-based target methods
convergence
emissions intensity in a future year of a mitigation pathway.
Physical emissions intensity

Intergovernmental Also see:

United Nations body for assessing the science related to
Panel on Climate IPCC Special Report on 1.5°C
climate change
Change (IPCC) (SR15)

A Special Report requested by the United Nations on the

impacts of global warming of 1.5°C above pre-industrial Also see:
levels and related global greenhouse gas emission
IPCC Special Report pathways, in the context of strengthening the global Paris Agreement
on 1.5˚C (SR15) response to the threat of climate change, sustainable Pre-industrial levels
development, and efforts to eradicate poverty. The report
includes over 6,000 scientific references and was prepared
by 91 authors from 40 countries

GHG reduction targets that are in line with what the latest
Long-term science-
climate science deems is necessary to reach net-zero at
based target
the global or sector level in 1.5°C pathways before 2050.

A human intervention to reduce emissions or enhance the

Mitigation
sinks of greenhouse gases (IPCC).

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 Also see:
Mitigation
A set of measures planned by a company to mitigate Abatement
Mitigation strategy GHG emissions that may include abatement, insetting,
compensation and neutralisation. Insetting
Compensation
Neutralisation

The WWF defines NBS as “Ecosystem conservation, Also see:

management and/or restoration interventions intentionally
Carbon-dioxide removal
planned to deliver measurable positive climate adaptation
Nature-based
and /or mitigation benefits that have human development Neutralisation
Solutions (NBS)
and biodiversity co-benefits managing anticipated
Insetting
climate risks to nature that can undermine their long-term
effectiveness.”

GHG reduction targets that are in line with what the latest
Near-term science- climate science deems necessary to limit warming to 1.5°C
based target above pre-industrial levels and are achieved within a 5–10-
year timeframe from the date of submission.

Setting corporate net-zero targets aligned with meeting

societal climate goals means (1) achieving a scale of value
Also see:
chain emissions reductions consistent with the depth of
Net-zero abatement at the point of reaching global net-zero in 1.5˚C Residual emissions
pathways and (2) neutralizing the impact of any residual
emissions by permanently removing an equivalent volume
of CO2.

Also see:
Measures that companies take to remove carbon from the Nature-based Solutions
Neutralization atmosphere and permanently store it to counterbalance the
impact of emissions that remain unabated. Carbon credits
Carbon dioxide removal (CDR)

Emissions sources that remain unabated in a specific year

Also see:
of a mitigation scenario. Long-term SBTs are consistent
Residual emissions with the level of residual emissions in the year of global or Paris Agreement
sector net-zero in 1.5°C-aligned mitigation pathways with
low or no overshoot.

Also see:
Targets that are in line with what the latest climate science Near-term science-based
Science-based says is necessary to meet the goals of the Paris Agreement targets
targets (SBTs) – to limit global warming to well-below 2°C above pre-
industrial levels and pursue efforts to limit warming to 1.5°C Paris Agreement
Pre-industrial levels

Also see:
Methods used to calculate science-based targets from
Science-based
a mitigation pathway, company input variables, and an Absolute contraction
target methods
allocation formula.
Intensity convergence

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 Advisory body to the SBTi consisting of representatives
SBTi Net-Zero from civil society organizations, corporate climate action
Expert Advisory initiatives, research agencies, and other stakeholders that
Group (EAG) contribute specifically to the development of the Net-Zero
Standard.

Advisory body to the SBTi consisting of recognized experts

SBTi Scientific in climate change mitigation, integrated assessment
Advisory Group modelling, energy system and land-use dynamics, and
(SAG) other topics that contribute to developing the SBTi’s
scientific foundations.

Advisory body to the SBTi consisting of practitioners

SBTi Technical and experts in topics such as corporate sustainability,
Advisory Group greenhouse gas accounting, and target-setting that provide
(TAG) invited feedback on SBTi methods, criteria changes, and
guidance.

Absolute emissions or emissions intensity pathways for

Sector-specific a specific sector that may be used for calculating near- See also:
pathways term and long-term intensity targets, as well as long-term Mixed sector pathway
absolute targets, in most cases.

Examples include, but are

not limited to:
Direct Air Capture (DAC) and
storage
Bioenergy with carbon capture
and storage (BECCS)
Improved soil management
Improved forest management
Land restoration, e.g., of
peatland, terrestrial forests or
mangroves
Measures that companies take to remove carbon from the
Removals atmosphere and permanently store it within or beyond the Within the value chain,
value chain. companies in the Forest,
Land and Agriculture (FLAG)
sectors are expected to deliver
biogenic carbon removals
as part of their science-
based targets in addition to
reductions (versus neutralizing
unabated emissions that
remain when a science-based
target is met).
Also see:
Carbon dioxide removal (CDR)
Neutralization

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 Also see:
Defined by the GHG Protocol accounting standard as “A
Scope 1 emissions GHG emissions
reporting organization’s direct GHG emissions”

Defined by the GHG Protocol accounting standard as “A Also see:

reporting organization’s (indirect) emissions associated
Scope 2 emissions GHG emissions
with the generation of electricity, heating/ cooling, or steam
purchased for own consumption”

Also see
Defined by the GHG Protocol accounting standard as “A
Scope 3 emissions reporting organization’s indirect emissions other than those GHG emissions
covered in scope 2”
Scope 2 inventory

Stated by the UNFCCC, the Paris agreement is a “legally

binding international treaty on climate change. It was
The Paris
adopted by 196 Parties at COP 21 in Paris, on 12 December Also see:
Agreement
2015 and entered into force on 4 November 2016.
Pre-industrial levels
Its goal is to limit global warming to well below 2, preferably
to 1.5 degrees Celsius, compared to pre-industrial levels”

A metric describing the emissions per physical unit Also see:

of an activity (e.g., cement production). The intensity Decarbonization
Physical emissions
convergence method is based on the principle that all
intensity Pre-industrial levels
companies in a sector will converge to the same physical
emissions intensity in a future year of mitigation pathways. Paris Agreement

The annual Conference of the Parties brings together

the 197 countries (Conference of the Parties, COP) that
have ratified the United Nations Framework Convention
on Climate Change (UNFCCC). As the twenty-sixth such
gathering, it is known as COP26 and will take place in
United Nations
Glasgow in November 2021.
Climate Change
Conference (2021: Also see:
The United Nations Environment Program (UNEP) states
COP26) Paris Agreement
that “Under the Convention, nations have reached two key
agreements on reducing greenhouse gas emissions: the
Kyoto Protocol adopted in 1997, and the Paris Agreement
adopted in 2015. The Paris accord is built around so-
called “nationally determined contributions” as a means
of achieving the goal of limiting the global temperature
increase, and to step up those contributions over time”.”

Also see:
Scope 1 inventory
Value chain A company’s scope 1, 2, and 3 emissions as defined by the
Scope 2 inventory
emissions GHG Protocol accounting standard
Scope 3 inventory

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 11 ACKNOWLEDGEMENTS

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 11 ACKNOWLEDGEMENTS

11.1 PRIMARY AUTHORS Tatiana Boldyreva, CDP

Tereza Bicalho, WWF
Emma Watson, CDP
Tom Dowdall, CDP
Andres Chang, CDP
Zola Berger-Schmitz, WRI
Alberto Carrillo Pineda, CDP
Zniko Nhlapho, WWF
Christa Anderson, WWF
Cynthia Cummis, World Resources Institute
11.4 EXPERT ADVISORY GROUP
Martha Stevenson, WWF
The following individuals provided expert feedback
11.2 EDITORIAL and direction on guidance development. They did
CONTRIBUTIONS AND so in a personal capacity, and their views did not
necessarily represent the views of their employers.
REVIEW FROM:
Brad Schallert, WWF Alexia Kelly, Netflix
Heidi Huusko, UN Global Compact Ankita Kumari, Survival International
Maxine Meixner, CDP Anthony Hobley, WEF
Paola Delgado, WWF Candace Vinke, Verra
Paulina Tarrant, CDP Carsten Warnecke, New Climate Institute
Rosie Williams, CDP Chris Bayliss, Aluminum Stewardship Initiative
Sarah Savage, CDP Cynthia McHale, Climate Action 100+
Daniel Salter, Amazon
11.3 NET-ZERO WORKING Dean Cambridge
GROUP Derik Broekhoff, Stockholm Environment
Institute
Alberto Carrillo Pineda, CDP
Doreen Stabinsky, College of the Atlantic
Alexander Farsan
Emily Hickson, The B Team
Andres Chang, CDP
Erwan Saouter
Brad Schallert, WWF
Eveline Speelman, Energy Transitions
Chris Weber
Commission
Christa Anderson, WWF
Faustine Delasalle, Energy Transitions
Cynthia Cummis, WRI
Commission
Daniela Castellanos, WWF
Frances Seymour, WRI
Emma Watson, CDP
Gary Cook, [Link]
Fernando Rangel Villasana, WWF
Gilles Dufrasne, Carbon Market Watch
Martha Stevenson, WWF
Giulio Berruti, BSR
McKenna Smith, WWF
Helen Wiggs Marshall, ShareAction
Miranda (Burnham) Nayyar, CDP
Jen Austin, High-Level Champions
Nate Aden, WRI
Jessica Andrews, Net-Zero Asset Owners
Paola Delgado, WWF
Alliance
Paulina Tarrant, CDP
John Revess, WBCSD
Pedro Faria, CDP
Karol Gobczynski, Ikea
Rebecca Wynn
Luca de Giovanetti, WBCSD
Rosie Williams, CDP
Michael Hugman, Children’s Investment Fund

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 Foundation (CIFF) CBRE
Mischa Reppman, Swiss Re Colgate Palmolive Company
Nafkote Dabi, Oxfam Co-op
Owen Hewlett, Gold Standard CVS Health
Pedro Martins Barata, Environmental Defense Danone
Fund Dentsu International
Ramiro Fernández, High-Level Champions / Deutsche Telekom AG
Fundacion Avina DSM
Rasmus Valanko, We Mean Business easyJet
Richard Batten, JLL EDF Group
Robert Höglund EDP Energias de Portugal
Roy Vissers, DSM Elopak
Salla Sulasuo, DSM Emira Property Fund
Sam Van den plas, Carbon Market Watch Enel S.p.A.
Stephan Singer, Climate Action Network Ferrovial
Thomas Lingard, Unilever FLSmidth A/S
Tom Hale, Oxford University Givaudan
Valentina Lira, Viña Concha y Toro Globant
Guidehouse
11.5 EXTERNAL SUPPORT HEINEKEN
Emilie Wesseling, SYSTEMIQ Holcim Ltd.
Scarlett Benson, SYSTEMIQ Informa
International Consolidated Airlines Group (IAG)
The SBTi would also like to thank BCG for support
Jacobs
during the road testing phase of the project.
JLL
Kesko Corporation
11.6 COMPANY ROAD TESTERS
Lenovo
The following organizations provided valuable Magyar Telekom Plc.
feedback on the robustness and practicality of Mahindra Lifespace Developers Limited
the draft Net-Zero Standard through the road test Mars
during July and August 2021. McCain Foods
Moody’s
ab inbev
Multiplex Construction Europe
A.P. Moller-Maersk
Ørsted
ABOUT YOU AG & Co. KG
Outokumpu Oy
ACCIONA Energía
PepsiCo
ACCIONA S.A
Pfizer Inc.
AstraZeneca
Pilgrim’s UK
Baluarte Cultura
Ralph Lauren Corporation
Bayer AG
Rolls-Royce plc
Bloomberg LP
Slaughter and May
BMW Group
Sodexo
Bonava
Sopra Steria Group
Boston Consulting Group
Starbucks
Capgemini SE
Swire Properties Limited
CBA

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 Swiss Re
Telenor ASA
Transurban
Tubacex
Unilever
Veritas Technologies
Volkswagen
WayCarbon
Wipro Ltd
Worley
WSP Global Inc.

11.7 SBTI FUNDERS
The SBTi is grateful to the organizations and
companies who provide funding to support our
mission.

Core funding for the Science Based Targets

initiative is provided by IKEA Foundation, Bezos
Earth Fund, We Mean Business, The Rockefeller
Brothers Fund, The UPS Foundation and Amazon.

11.8 PUBLIC CONSULTATION
PARTICIPANTS
We would also like to thank everyone who
participated in the two public consultations
survey to help strengthen this Standard.

SBTi Corporate Net-Zero Standard | Version 1.0 | October 2021 64

 For general information and technical queries:

info@[Link]

[Link]
@ScienceTargets /science-based-targets

Partner organizations In collaboration with

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