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Understand key concepts

A net zero target implies your organization is committed to reducing emissions as much as possible (and at least by 90%) by a set date before 2050 across all scopes, and that any remaining emissions will be removed. Each organization will have to define its own science-based trajectory and interim milestones for achieving that target from now to 2050.

For other targets accompanying the long-term target (net zero emissions by 2050), add more clarity to the net zero trajectory by addressing short-term milestones and interim targets for specific emission scopes. In this chapter, the overall target and accompanying targets are referenced as the net zero targets.

In the lead-up to setting net zero targets, your management team should:

  • Understand the concept of net zero and what it means for businesses: Companies are taking a wide range of climate pledges to signal their commitment to act on climate change. A new set of standards has emerged to ensure the credibility of net zero pledges in line with the global target of limiting warming to 1.5°C

  • Align on what is needed for net zero targets to be credible: Net zero targets have little meaning without sufficient definition, and when this definition is missed, misrepresented or misinterpreted, an organization risks perceptions of green-washing. This section outlines the key elements that should be defined when setting credible net zero targets

  • Consider the balance between a bold and actionable target: Targets should be bold but also suited to your organization. Weak targets will not deliver the benefits associated with following a net zero strategy (e.g. more customers setting their own Scope 3 targets, cost savings through efficiency gains, opportunities for green innovation). Meanwhile, overly aspirational targets may be detached from broader strategies and lose traction. This section outlines opportunities for companies in setting out bold ambitions within organizational parameters

  • Take lessons from other examples of corporate net zero ambitions: This section outlines examples of other organizations’ climate commitments to review how they adhere to the best practices described in other sections. Examples from other organizations also provide clarity on the potential output of target-setting

*Note on risks of poorly set targets:

There is widespread concern that targets without rigorous planning, often based on voluntary commitments, allow too much discretion in the design of net zero pathways and may not be consistent with global net zero, or with ambitious climate action more generally.

Most of the concerns and criticism relate to:

  • Long-term net zero targets are often not backed up by sufficient short-term targets or detailed plans to achieve pledges, rendering the plans less credible

  • The full scope of organizations’ emissions are not sufficiently covered by net zero targets and plans, particularly across Scope 3 emissions

  • There is insufficient transparency around targets, plans and progress towards them (e.g. through respected and regular reporting and verification processes)

  • How and whether the organizations plan to rely on removals, carbon offsets or carbon credits and how this relates to environmental and social integrity concerns

As a result, an increasing number of companies are being accused of green-washing. This demonstrates the need for clear guidance to ensure the robustness of net zero as a framework for climate action.

Aligning your targets with the Science Based Targets Initiative (SBTi), the leading framework for science-based net zero targets for businesses, is the best way to mitigate the risk of perceived green-washing.