In the second of our three-part webinar series on this update, our experts dove into the key changes companies need to look out for about their ongoing and residual emissions within SBTi's new draft guidance.
In case you missed it, we've put together a quick recap of the key terms, changes, and recommendations. If you are looking to dive deeper, jump down and watch a recording of the full webinar.
To understand the evolving landscape of corporate net-zero targets and the Science Based Targets initiative's (SBTi) updated Net-Zero Standard draft, consider the following:
Currently, the SBTi requires companies to neutralize all residual emissions from their net-zero target year onward via the procurement of carbon removal credits. The draft introduces several significant changes: interim removal targets on Scope 1 removal targets, durability requirements for removals, and the possibility of having Scope 3 residual emissions addressed by value chain partners. The new standard will also provide criteria on what constitutes a high-integrity removal. While BVCM remains a recommendation, the SBTi suggests giving recognition to companies that address their ongoing emissions through BVCM. These changes will be further detailed during the consultation period.
Early action on carbon credits is crucial as the SBTi moves toward integrating them into core sustainability strategies. With potential mandatory removal targets on the horizon, clarity around long-term credit needs is essential for companies transitioning to net zero, and delaying action risks falling behind competitors.
Furthermore, as the requirement for credit strengthens, increased demand is likely to exceed supply, especially for carbon removals. Given the lengthy project development times, particularly for nature-based solutions (NBS), companies should secure procurement options early to avoid potential price increases and ensure commitment fulfillment.
Additionally, it will be essential for companies to start integrating the cost of carbon credits into long-term financial planning, especially for removals. Embedding these costs early mitigates market volatility and helps companies meet their net zero commitments with greater certainty.
To effectively engage with carbon markets, companies should:
This session explored what these changes mean for corporate climate strategies and how companies can proactively build a high-quality carbon credit portfolio that aligns with evolving expectations.
Schedule a call with our experts today on how to navigate the key changes to the Corporate Net Zero Standard and their potential implications for your carbon credits strategy.
