Companies interested in bringing their CO2 emissions towards ‚Net Zero‘, should pay attention to the newest report of the Science Based Targets Initiative (SBTi) published this September. This report recognizes offsetting and neutralization of CO2 emissions as valid tools in the transition to a ‚Net Zero‘ status and presents five potential strategies to achieve a „Net Zero“ status. Those 5 strategies are measured against three guiding principles: 1. Consistency with atmospheric no net accumulation of GHG, 2. Consistency with the attainment of the Paris Agreement and 3. Resiliency of business model in a net zero economy.
Applying the ‘climate positive approach’
The most ambitious, so-called ‘climate positive approach’ meets all three above mentioned guiding principles. This approach includes the following aspects:
- Companies should set stringent reduction targets that will help limit global warming to 1.5 degrees.
- In addition, the companies should take responsibility for their value chain emissions and ensure CO2 compensation of the emissions caused during the transition phase to “Net Zero”.
- Companies are also encouraged to carry out projects to eliminate CO2 emissions (carbon reduction). Possible fields of application are the removal of CO2 from the atmosphere (direct air capture) or reforestation.
Besides this approach, the SBTi presents also four other mitigation strategies to tackle the Net Zero challenge (see SBTi 2020, p. 22-30):
- Strategy 1: emission reductions are replaced by carbon credits
- Strategy 2: emission reductions are replaced by avoided emissions from sold products and services
- Strategy 3: replacement of emission reductions by negative emissions, e. g. by capture and storage solutions, afforestation, etc.
- Strategy 4: emission reduction pathway that is in line with science
DFGE’s analysis
Especially Strategy 1 and 2 are weak pathways as greenhouse gases are further emitted than avoided. This in turn, does not stop accumulation of emissions in the atmosphere. Therefore, these strategies are not consistent with the global goals.
Strategy 3 would be consistent with the ‘no net accumulation of GHGs in the atmosphere’ (see principle 1 mentioned above) if the sequestration is permanent. On the other hand, companies choosing that pathway wouldn’t be able to reach consistency with the Paris Agreement and the SDG’s as geological solutions like capture and storage could generate trade-offs and negative impacts on social and environmental goals. Also, the business model couldn’t be resilient on the transition pathway as it may not address stakeholder expectations.
Only Strategy 4 (‘science-based emission reduction strategy’) and 5 (‘climate positive approach’) can be considered as strong pathways as they are consistent with all three principles mentioned above. Moreover, both strategies are in line with science.
Nevertheless, the DFGE recommends companies to choose the most ambitious strategy, the ‚climate positive approach‘, as it ‘provides an opportunity for companies to contribute to the broader social and environmental agenda while ensuring the integrity of their own climate strategy’.
Why the path to Net Zero should be science-based
- Strategies set individually by companies could be diverse and inconsistent
- Risks for companies that defined pathway couldn’t be consistent with addressing climate crisis and global sustainability goals properly
- The Net Zero target standard provided by SBTi sets a common basis and provides appropriate guidelines and recommendations
- SBTi clarifies concepts, the role of decarbonization, offsetting and nature-based climate solutions
Political background
The Net Zero move comes as the European Commission recently announced its reduction target to cut EU greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. This ambitious plan is based on an impact assessment where the Commission addressed the problem that the current 2030 climate target is not sufficient to allow for a transition to EU climate neutrality by 2050 (see European Commission 2020, p. 8). As part of the Green Deal it is necessary to cut emissions by 55% by 2030 and to include everyone, not only energy supplying and demanding sectors.
The role of businesses and companies
Companies play a critical role in reaching Net Zero. They have the responsibility to limit their negative environmental impacts and to reduce harmful greenhouse gases.
Almost 1,000 companies already taking climate action through the Science Based Targets which represents 15% of the global economy. Furthermore, nearly 300 businesses (including Microsoft, IKEA and Rolls Royce) have committed to the science-based Net Zero.
That’s already a valuable sign which reflects the engagement of big companies to strengthen their climate action and to define common science-based strategies on the transition towards a climate-neutral economy.
How the DFGE can support you:
It is the responsibility of all to make sure that we address current sustainability challenge, for the future generations. With the „Net Zero“ strategies of the Science Based Targets initiative, you have the opportunity to be sure that your efforts are really impacting the current situation. With a holistic approach, DFGE as a full-service provider deals within its Climate Strategy with the calculation of the carbon footprint up to certification and a possible compensation through climate compensation and protection projects. Don’t wait until it is too late: act now!
We look forward to supporting you with our more than 20 years of sustainability expertise and our customized services! Contact us for more information at or +49.8192.99733-20.
