In October 2021, SBTi’s net-zero standard for companies came out with the goal of providing a reliable assessment and communication methodology.
People often confuse the concept of net-zero with carbon (or climate) neutrality, which is achieved when all residual anthropogenic greenhouse gas emissions are compensated by an equal amount of reduced, avoided or removed emissions within a given time horizon. It is clear that carbon neutrality is an intermediate (or short-term) objective to ensure that corporate efforts are consistent with the achievement of the net-zero target in the medium-long term.
In particular, the concept of carbon / climate neutrality is outdated and does not represent a best practice in terms of climate strategy: this is because it leaves room for interpretation on the need to reduce emissions before compensation and on the quality of credits used for compensation. It is therefore preferable to commit to financing climate action beyond the supply chain, integrating this activity into a pathway of reducing emissions in line with the Paris Agreement, toward a long-term net-zero goal. Aiming for net-zero through a strategy that includes emissions reductions and climate action financing is currently the approach that is consistent with international standards, an approach that is certainly more credible from a communication perspective as well.