I am going to commit to SBTi Net-Zero. What am I getting into?

“This takes quite a bit of climate knowledge”

In this blog series, we talk to 2BHonest specialists about interesting topics they come across in their work as sustainability consultants.  Today, we talk to Sivan van Leerzem about what you can expect if you adopt the SBTi Corporate Net-Zero Standard as your climate strategy.

Companies can now choose to commit to ‘SBTi Net-Zero’. What exactly is that again?

Under the Paris Climate Agreement, the world agreed to limit the increase in the Earth’s average annual temperature to 2 degrees Celsius — with an ultimate goal of 1.5 degrees. This is the range that scientists have determined to still be safe. The Science Based Targets Initiative (SBTi) was founded by several influential parties, with the aim of helping companies align their climate strategy with the Paris Agreement. SBTi does this by helping companies calculate how much they need to reduce their carbon emissions to meet the 1.5 degree target by 2050 at the latest. Companies can have their targets validated by SBTi and develop a reduction trajectory in line with the Paris Agreement.

As a company, why would you want to pursue an SBTi Net-Zero strategy? It does sound rather ambitious.

The question we ask companies is: Do you want to be ahead of the curve or do you want to trail behind?Governments in the EU are already aiming for the same level of ambition as the SBTi net-zero target. Legislation is already in the making, such as carbon pricing, the Carbon Border Adjustment Mechanism and the CSRD. So no matter what, companies are going to be affected by the choices governments (EU, NL and local) make. It is therefore a strategic move to follow SBTi. We also see that companies are being urged by their suppliers, clients or parent company to commit to SBTi, because they already see the need for it. It also provides reassurance and focus to have a scientifically defined target in a world where there are so many different opinions on how companies can best tackle climate change. SBTi provides a target to work towards.

When you set an SBTi Net-Zero target, you are not only saying ‘we will reduce our emissions’, but also ‘we believe in a world where we do it together’.

What challenges will I face if I adopt an SBTi Net-Zero strategy?

The greatest challenge is in your dependence on supply chain partners. How will you make sure that your suppliers reduce their emissions? We see with food and agribusinesses that 95% of their emissions are in scope 3. Most of this takes place in agriculture, sometimes on the other side of the world. In the construction sector, the production of steel and concrete make up a large share of the total footprint. The fact that solutions to reduce emissions are not always available also means that you won’t necessarily be able to implement your reduction plan. We already see many developments, but we still have a long way to go. How do you get suppliers to make their hoisting cranes electric, when those cost four times as much? How do you get enough green electricity onto the construction site?

Another challenge is calculating the carbon footprint and monitoring SBTi targets; this requires quite a bit of climate knowledge. At 2BHonest, we have put together a climate team which closely monitors developments and meets regularly. In this way, we can continue to provide our customers with the best possible support for their climate strategy.

So how does 2BHonest advise companies to go from planning to acting?

Companies need to get off their islands and start thinking more at a sector level: How can you collectively make sure that companies make a radical transformation? Invite the sector to collaborate with you. When you set an SBTi Net-Zero target, you are not just saying ‘we are going to reduce our emissions’, you are also saying ‘we believe in a world where we can achieve this together, so we are asking our customers and suppliers to join us in this effort’.

In keeping with this, the 2BHonest climate team will soon be organising Net-Zero Booster sessions for companies. In these round table discussions, we will share our knowledge and work together with practising companies or companies interested in SBTi to address the challenges that lie ahead.

Want to learn more about Net Zero? Maarten is on hand to help!