SBTis Net Zero Standard Corporate Manual

Partner organizations
The SBTi Net-Zero Corporate

Manual
The SBTi Net-Zero Corporate Manual Version 1.1 | July 2021
sciencebasedtargets.org @ScienceTargets /science-based-targets info@sciencebasedtargets.org

Version Release date Purpose Updates on earlier version

1.0 15.07.2021 Road test -
Clarification on 5-10 year timeframe for near-
term SBTs, timeline updates, minor updates to
1.1 23.07.2021 Road test
spelling and grammar, minor updates to
Appendix III.
The SBTi Net-Zero Corporate Manual Version 1.1 | July 2021

Contents
Part 1: Background................................................................................................................ 1
1.1 About this guidance ..................................................................................................... 1
1.2 What are science-based targets?................................................................................. 1
1.3 The Net-Zero Standard development process .............................................................. 2
1.4 What does the Net-Zero Road Test entail? .................................................................. 3
1.4.1 Why focus on emission reduction target criteria in this road testing? ..................... 3
Part 2: Terminology and updates to current SBTi criteria....................................................... 6
2.1 Science-based targets terminology .............................................................................. 6
2.1.1 Near-term science-based targets........................................................................... 6
2.1.2 Long-term science-based targets .......................................................................... 6
2.2 Changes to near-term SBT criteria ............................................................................... 7
Part 3: Mitigation pathways in the Net-Zero Standard ............................................................ 8
3.1 How mitigation pathways are used to inform SBTs ...................................................... 8
3.1.1 Available pathways and which companies should use them .................................. 9
3.2 Preliminary pathway data for long-term SBTs .............................................................10
Box 1. In-progress work on 1.5°C pathways .....................................................................14
Part 4: Setting near-term and long-term science-based targets ............................................15
4.1 Select a base year ......................................................................................................15
4.2 Calculate your company’s emissions ..........................................................................16
4.2.1 Develop a full GHG emissions inventory ...............................................................16
4.2.2 Calculate relevant emissions that are reported separately from the GHG inventory
......................................................................................................................................18
4.3 Set SBT boundaries ....................................................................................................18
4.3.1 Near-term SBT boundary (scopes 1, 2, and 3) .....................................................18
4.3.2 Long-term SBT boundary (scopes 1, 2, and 3) .....................................................19
4.3.3 Additional required SBT coverage ........................................................................19
4.3.4 Meeting SBTi boundary criteria with several targets .............................................20
4.4 Choose a target year ..................................................................................................21
4.5 Calculate targets .........................................................................................................21
4.5.1 Calculating near-term SBTs..................................................................................23
4.5.2 Calculating long-term SBTs ..................................................................................25
Box 2. A note on FLAG emissions ....................................................................................33
Box 3. Can insetting count towards my scope 3 reduction? ..............................................35
Part 5: Updating and communicating targets ........................................................................36
SBTi Net-Zero Corporate Manual Version 1.1 | July 2021

5.1 What steps can you take if your current net-zero targets don’t align with the requirements
of the Net-Zero Standard? ................................................................................................36
5.1.1 How can you ensure your near-term targets align with the Net-Zero Standard? ...36
5.1.2 How can you ensure you long-term targets align with the Net-Zero Standard? .....36
5.2 How to upgrade your near-term SBTs to align with the Net-Zero Standard .................37
5.3 How to communicate with stakeholders when net-zero targets do not meet the Net-Zero
Standard requirements .....................................................................................................38
Part 6: Conclusion and next steps ........................................................................................39
Appendix 1: Sector-specific guidance for long-term SBTs ....................................................40
Appendix 2: Further guidance for companies with significant FLAG emissions .....................45
Land sector guidance is evolving ......................................................................................45
What counts towards FLAG emissions?............................................................................46
How can you determine if your company's FLAG emissions are significant? ....................46
What options are available for your company to set FLAG emission reduction targets?....47
For near-term science-based targets .............................................................................47
For long-term science-based targets .............................................................................47
Appendix 3: Can companies include nature-based solutions in science-based targets? .......48
Using NBS to achieve both near and long-term science-based targets .........................48
Appendix 4: Transitioning to global net-zero in line with climate and sustainability goals ......50
Appendix 5: Acronyms..........................................................................................................51
Appendix 6: Glossary ...........................................................................................................52

Part 1: Background
1.1 About this guidance
This guidance document provides information to companies participating in the Net-Zero

Standard road test on how to set emission reduction targets as part of a net-zero commitment
aligned with science. This manual will be updated and published when the Standard is
launched based on feedback received throughout the road test.
The document serves as an accompaniment to the Science Based Targets initiative (SBTi)
Net-Zero Criteria, Net-Zero Tool and Net-Zero How-to Guide. It is split into six parts and laid
out as follows:
• Part 1: Background
• Part 2: Terminology and updates to current SBTi criteria
• Part 3: Mitigation pathways in the Net-Zero Standard
• Part 4: Setting near-term and long-term science-based targets
• Part 5: Updating and communicating targets
• Part 6: Conclusion and next steps
The intended audience for this document is companies with over 500 employees that wish to
commit to net-zero through the SBTi. These documents cover corporate net-zero targets and
do not cover financial institution net-zero targets. The SBTi’s financial sector project is
developing specific net-zero resources for financial institutions.
SBTi has published several other documents on target setting and net-zero1. This guidance
complements these existing documents. This document also addresses topics that are
described in further detail in other SBTi publications, like the Foundations for Science-Based
Net-Zero Target Setting in the Corporate Sector paper and the SBTi Corporate Manual. This
guidance and the SBTi’s other publications provide a comprehensive suite of information for
companies interested in setting science-based targets.
1.2 What are science-based targets?
Greenhouse gas (GHG) emissions reduction targets are considered “science-based” if they
are in line with what the latest climate science says is necessary to meet the goals of the Paris
Agreement - to limit global warming to well-below 2°C above pre-industrial levels and pursue
efforts to limit warming to 1.5°C.
The SBTi currently validates scope 1 and 2 SBTs that are in alignment with limiting global
warming to well-below 2°C as a minimum level of ambition. However, in response to the
1
More information on the SBTi’s Net-Zero project can be found on our website at
https://sciencebasedtargets.org/net-zero.
1

urgency and scale of the climate emergency, the SBTi is ratcheting up its expectations for
businesses by ensuring all targets align with a 1.5°C future.
From 15 July 2022 onwards, the SBTi will only validate targets aligned with 1.5°C for scope 1
and 2 and a minimum level of ambition of well-below-2°C for scope 3. Updates to the target
setting criteria (Version 5.0) in line with the new SBTi net-zero standard will be launched in
November 2021. This is described in further detail in this document in the section on “Changes
to near-term SBT criteria”.
1.3 The Net-Zero Standard development process
Recognising that the definition of net-zero and the path to get there is often inconsistent, the
SBTi began developing the Net-Zero Standard to provide business leaders with a common,
robust, and science-based understanding of net-zero. The SBTi is undertaking this process to
provide clarity and to ensure companies can be confident their actions are in line with climate
science. There are many frameworks available for companies to make net-zero commitments,
including the SBTi’s Business Ambition for 1.5°C campaign, however the SBTi’s Net-Zero
Standard is the first global science-based standard to guide companies in setting net-zero
targets.
The SBTi is undertaking a robust, inclusive, and transparent consultation with stakeholders
from science, business and civil society to ensure that the SBTi’s Net-Zero Standard is the
gold standard for science-based net-zero target setting. The framework is being developed
through consultations with the SBTi’s Scientific and Technical Advisory Groups, a dedicated
Net Zero Expert Advisory Group and a Stakeholder Consultative Group. Our Expert Advisory
Group (EAG) includes representatives from academia, civil society, science and business. The
EAG’s main role is to review and provide in-depth feedback to the SBTi during development
of our Standard.
Following on from the publication of the ‘Foundations for net-zero target setting in the corporate
sector’ paper in September 2020, the SBTi has been developing detailed criteria and guidance.
A public consultation on the first version of draft criteria was open for comments for two months
and closed on 12th of March, 2021. We received almost 400 responses to our consultation.
You can find out more about the public consultation in our Public Consultation report, which
will be published on our website soon.
2

Figure 1. Net-Zero Standard project timeline
This road test will help us refine the tools, guidance and criteria for the Net-Zero Standard,
which will be released in advance of COP26 in November 2021.
1.4 What does the Net-Zero Road Test entail?
The road test will run from Thursday the 15th of July to Tuesday the 31st of August 2021. The
primary objectives for the road test are to:
•
Gather feedback on the clarity, robustness and practicality of the target setting tool,
criteria and guidance
• Identify key challenges for adoption and implementation of the standard across
industries
• Build a strong network of companies on the journey to setting net-zero targets in line
with climate science
Companies are expected to trial the target setting tool and review the criteria and guidance
documents, and then provide input via the feedback survey. The first version of the Net-Zero
Standard will be finalised in late 2021.
1.4.1 Why focus on emission reduction target criteria in this road testing?
The SBTi is prioritising development and refinement of emission reduction target methods in
the process to develop the Net-Zero Standard. As a result, this road test will focus on
criteria and methods for setting near-term and long-term SBTs that are an essential part
of any corporate net-zero commitment. This means that the criteria and recommendations on
neutralisation and compensation2 that were included in the first draft of Net-Zero Criteria will
2In this document, the term compensation refers to companies’ actions or investments that mitigate GHG emissions
beyond those covered by their near-term and long-term science-based targets. It may include actions such as
purchasing high-quality carbon credits and providing direct financial support to projects that generate positive
climate impacts outside a company’s value chain. Although the term compensation is often associated with
subtracting carbon credits from the emissions in a company’s inventory to claim “neutrality,” the use of the term
3

not be part of this road test. Science-based emissions reductions across all three scopes are
key to achieving global net-zero goals, and the SBTi has received clear feedback from
consultations to-date that this is where its immediate focus should lie.
The SBTi aims to develop the Net-Zero Standard to encourage companies to follow the
principles of the mitigation hierarchy. Effectively that means that companies should set
science-based targets to reduce their value chain emissions and implement strategies to
achieve these targets before engaging in neutralisation and compensation activities (See
Figure 2). The SBTi defines compensation as actions that companies take to help society avoid
or reduce emissions outside of their value chain, and neutralisation as measures that
companies take to remove carbon from the atmosphere3.
The SBTi recognises that there is an urgent need to scale up near-term climate finance and
we are exploring what our role in incentivising these investments should be. While achieving
net-zero means neutralising residual emissions with carbon removals, a company’s pathway
to achieving net-zero can, and often should, include investments that help avoid or reduce
emissions outside the company’s value chain. The SBTi is currently conducting further
research to inform its approach to neutralisation and compensation.
Figure 2. SBTi perspective on prioritisation of mitigation actions.
1.4.1.1 How does this differ in the Forests, Land and Agriculture sector?
Companies with forest, land, or agriculture (FLAG) emissions in their supply chains should set
separate SBTs that cover land-based emissions and carbon removals. Companies who
choose this approach can then engage in a variety of mitigation activities to meet their science-
based targets that include removals (e.g., stopping deforestation and conversion). It is
important to note that because FLAG SBTs are separate from non-FLAG SBTs, FLAG
here is not meant as endorsement of such practices or claims. The SBTi is using the term compensation as a
placeholder and is currently reviewing other options for terminology.
3 There are important uncertainties and limits to sustainable carbon removal. Under the Net-Zero Standard, many
companies are required to set targets to reduce emissions by at least 90%, in-line with the magnitude of
decarbonisation required to reach net-zero at the global or sector level, to be eligible to reach net-zero with
additional neutralisation.
4

mitigation cannot be used to meet non-FLAG targets (e.g., a company cannot bring forests
into its value chain to meet another target).
Currently the GHG Protocol is developing new guidance for corporate land use and removals
accounting and, in parallel, the SBTi is developing specific science-based target setting
methods for companies with land sector emissions.4 The new guidance on accounting and
target setting for land-based emissions means that companies have a new opportunity, and
requirement, to bring land sector emissions and reduction opportunities into their net-zero
strategies.
For more information on the FLAG sector, see Appendix 3: Further guidance for companies
with significant FLAG emissions.
4 While GHG Protocol guidance for land sector emissions is under development, we recommend the following
guidance documents in the interim: GHG Protocol Corporate Standard, Scope 3 Standard, Product Standard,
Agriculture Guidance, LULUCF project guidelines, Brazil forestry tool. IPCC. Guidelines for National GHG
Inventories. 2006 Guidelines, Good Practice Guidance for LULUCF, 2019 Refinement, ISO. ISO 14064 1:2018.
Quantis. Accounting for Natural Climate Solutions Guidance. Gold Standard, Value Change Initiative.
5

Part 2: Terminology and updates to current SBTi criteria

2.1 Science-based targets terminology
Since publication of the first draft of Net-Zero Criteria, the SBTi has been going through a
process of refining and clarifying the terminology used within the standard. As part of this
refinement process, we have renamed “interim science-based targets” to “near-term science-
based targets” and included a more specific term - “long-term science-based targets” - for
emission reduction targets in line with net-zero.
Figure 3. Near-term SBTs vs. long-term SBTs
2.1.1 Near-term science-based targets
• What: Previously known as “science-based targets” (or “interim science-based targets

in the first draft of Net-Zero Criteria), these are 5-10 year emissions reduction targets
in line with 1.5°C pathways.
• Why: Galvanise the near-term action required for deep emissions reductions to be
achieved by 2030. Deep near-term emissions reductions are critical to not exceeding
the global emissions budget and are not interchangeable with long-term targets5.
2.1.2 Long-term science-based targets
• What: Previously known as deep decarbonisation targets, these targets show

companies how much they must reduce emission to align with reaching net-zero at the
global or sector level in 1.5°C pathways.
• Why: Drive economy-wide alignment and long-term business planning to reach the
level of global emissions reductions needed for climate goals to be met based on
science.
5 Despite this, if a company sets a long-term science-based target to reach the level of decarbonisation
required to reach net-zero at the global or sector level in 1.5°C pathways within a 10 year timeframe,
the near-term science-based target is not required.
6

2.2 Changes to near-term SBT criteria
In response to the urgency and scale of the climate emergency, the SBTi is ratcheting up its
expectations for businesses by ensuring all targets align with a 1.5°C future.
From 15 July 2022 onwards, the SBTi will only validate targets aligned with a minimum level
of ambition of 1.5°C for scope 1 and 2 and well-below-2°C for scope 3. In addition to this, the
SBTi is reducing the timeframe for near-term targets from a maximum of 15 years to a
maximum of 10 years. Updates to the target setting criteria for near-term targets (Version 5.0)
in line with the new SBTi Net-Zero Standard will be launched at the end of 2021.
To validate your net-zero commitment through the SBTi, your company's near-term SBTs must
meet these revised criteria. This means that if your company has a legacy SBT that does not
fulfil these criteria, it must be updated (see here for more information on this process). You can
find out more about the SBTi’s work to develop 1.5°C pathways here.
Table 1. Summary of changes to near-term SBT criteria
Criterion Planned changes
Under the current criteria, near-term SBTs may have a target year 5-15
Timeframe years from the date of submissions. In the new criteria, this will be changed
to 5-10 years from the date of submission.
Scope 1 & The minimum scope 1 and 2 ambition of near-term SBTs will be increased
2 ambition from well-below 2°C to 1.5°C
The minimum scope 3 ambition of near-term SBTs will be increased from

2°C to well-below 2°C. Supplier engagement targets will remain eligible;
Scope 3 however, the SBTi is considering removing the non-SDA physical intensity
ambition contraction method and the GEVA economic intensity method. The SBTi will
also be exploring additional category-specific scope 3 target setting
methods.
7

Part 3: Mitigation pathways in the Net-Zero Standard

3.1 How mitigation pathways are used to inform SBTs
Mitigation pathways play a key role in setting SBTs. For near-term SBTs, mitigation pathways
inform the rate of emissions reductions or emissions intensity reductions that are needed. For
long-term SBTs, they inform the overall emissions reduction or convergence intensity that must
be reached to be aligned with net-zero at the global or sector level.
Because of this, near-term SBTs are target year-dependent, while long-term science-based
targets are company target year-independent. This means that your reduction target will differ
depending on the target year selected for your near-term SBTs, but the reduction target will
not differ for the chosen target year for your long-term SBTs. This is illustrated in Figure 4
below.
Figure 4. Schematic showing target year-dependency of near-term SBTs and target year-independency of long-
term SBTs. Companies must select a target year earlier than 2050 for long-term SBTs, which depends on how
quickly it can reduce its emissions.
Mitigation pathways are derived from emissions scenarios. Some scenarios are global in scope
and cover all GHGs, while others are more limited in scope but are more granular.
Global scenarios illustrate that if one sector reduces emissions less, other sectors would need
to reduce emissions more for the same temperature goal to be achieved. SBT pathways are
internally consistent, so if all companies set SBTs using different SBTi pathways the global
emissions budget would still be preserved and global climate goals would be met.
8

3.1.1 Available pathways and which companies should use them
There are two main SBT pathways (see Figure 5)6:
1. A universal pathway, which covers global GHG emissions except forestry, land-use,
and agriculture (FLAG)
2. An agriculture pathway, which covers FLAG emissions.
For most companies, the recommendation is to set separate absolute contraction targets using
these two pathways.
There are also activity pathways for setting intensity targets that cover power generation,
buildings, transportation, industrial products, and agricultural commodities. These are
recommended for companies in heavy-emitting sectors.
Other companies with scope 3 emissions allocated to these activities (i.e., they are on the
demand-side of these activities) may set near-term intensity targets but are required to set
absolute targets in the long-term. When setting long-term SBTs, these companies may use
activity pathways to calculate activity-specific absolute contraction targets, as an alternative to
the standard option of using the universal and agriculture pathways. Companies that are not
in heavy-emitting sectors but are on the demand-side of these sectors, are required to set
absolute targets because, unlike intensity targets, they account for demand-side mitigation
options like transport mode switching and reduced material usage.
See Table 2 for further details on this topic.
6 Because companies will be required to set separate targets for FLAG and non-FLAG emissions, the universal
pathway will supersede the SBTi’s current use of a global pathway to benchmark absolute contraction targets for
non-FLAG emissions sources. Replacing the use of the global pathway with the universal pathway will have benefits
to internal consistency because it does not overlap with emissions in the agriculture pathway and it shows gross
emissions (i.e., not counting carbon removal).
9

Figure 5. Panels A-D show mitigation pathways (coloured lines) and emissions corridors (shaded area, see Box 1)
consistent with reaching net-zero by mid-century and limiting global warming to 1.5°C with low or no overshoot. A:
Gross global GHG emissions except forestry, land-use, and agriculture (FLAG). This pathway is appropriate for
most companies. B: Net GHG emissions from agriculture including land-use change and agricultural carbon
removal. This pathway is appropriate for companies in land-intensive sectors except forestry. C: Biological and
technological carbon removal. This pathway is not used for target-setting. D: Net global GHG emissions including
land-use change. This pathway is currently used for near-term SBTs but will be superseded by the universal
pathway (A).
3.2 Preliminary pathway data for long-term SBTs
Tables 2 and 3 show preliminary data for long-term absolute and intensity SBTs for each
activity planned to be covered by the Net-Zero Standard, as well as the universal and
agriculture pathways.
It may be surprising that emissions for some heavy-emitting activities such as cement
production, passenger cars, and buildings are reduced more than the universal pathway. This
is to be expected because the IEA Net-Zero scenario, which was used to derive non-FLAG
pathways, covers a subset of GHG emissions in the universal pathway. The SBTi emissions
corridor project will compare the IEA Net-Zero scenario to other 1.5°C scenarios and
milestones in more detail (see Box 1).
Pathways included in the road testing draft of this document are preliminary and some
are planned to undergo changes. Data is included for the purpose of method testing;
companies should review the final guidance for changes before submitting targets to
the SBTi.
10

Table 2. Summary of 1.5°C-aligned pathways for non-land-intensive companies. Both absolute and intensity
pathways are included, where relevant. For each pathway, eligible companies are described and the long-term SBT
is shaded green. Note that % intensity reductions for 2019-2030 and 2019-2050, as well as 2030 intensities, are
the sector average. Using the SDA (intensity) method, companies may be required to set near-term intensity targets
that are above or below the sector average. The % reduction for near-term and long-term SBTs depends on
companies’ base year intensity.
Value % reduction
Eligible
Activity Pathway type Units
companies
2019 2030 2050 2019-2030 2019-2050
Universal Absolute GT CO2e 44.5 25.8 5.1 42% 90% Most companies
with emissions
from non-FLAG
activities except
power generation
companies
Aviation Absolute Mt CO2 1019 783 210 23% 79% Airline users
Intensity tCO2/thousand 0.125 0.076 0.013 39% 89% Airlines, airplane

pkm manufacturers
Cement Absolute Mt CO2 2461 1899 133 23% 95% Building

companies, other
cement
purchasers
Intensity tCO2/t cement 0.584 0.446 0.033 24% 94% Cement

producers, capital
goods
Iron and Absolute Mt CO2 2507 1779 220 29% 91% Building
Steel companies, auto
manufacturers,
other steel
purchasers
Intensity tCO2/t steel 1.341 0.918 0.111 32% 92% Steel producers,
capital goods
Marine Absolute Mt CO2 883 705 122 20% 86% Retail

transport companies, other
shipping
purchasers
Intensity tCO2/thousand 0.008 0.005 0.000 45% 95% Shipping service

tkm 4 companies
Passenger Absolute Mt CO2 3121 1626 85 48% 97% Car users

cars
Intensity tCO2/thousand 0.204 0.103 0.003 49% 98% Auto
pkm manufacturers,
car services
Power Absolute Mt CO2 13821 5904 203 57% 99% Electricity users
generation
Intensity tCO2/kWh 0.513 0.158 0.003 69% 99% Electric utilities
11

Value % reduction
Eligible
Activity Pathway type Units
companies
2019 2030 2050 2019-2030 2019-2050
Residential Intensity tCO2/ 0.969 0.566 0.035 42% 96% Real estate
buildings household companies
Service Absolute Mt CO2 977 432 14 56% 99% Building users

buildings
Intensity tCO2/m2 0.020 0.007 0.000 63% 99% Real estate
2 companies
Trucks Absolute Mt CO2 1835 1614 198 12% 89% Retail

companies, other
shipping
purchasers
Intensity tCO2/thousand 0.069 0.042 0.003 38% 95% Shipping service

tkm companies
Aluminium Preliminary data not yet available
Other Preliminary data not yet available

industry
Table 3. Summary of 1.5°C-aligned pathways for land-intensive companies. Both absolute and intensity pathways
are included, where relevant. For each pathway, eligible companies are described and the long-term SBT is shaded
green. Note that % intensity reductions for 2019-2030 and 2019-2050, as well as 2030 intensities, are the sector
average. Using the SDA method, companies may be required to set near-term intensity targets that are above or
below the sector average. The % reduction for near-term and long-term SBTs depends on companies’ base year
intensity. Agricultural commodity pathways in this table do not currently reflect emissions and mitigation due to land-
use change, which will be added in the final FLAG sector guidance and target-setting tool.
Value % reduction
Eligible
Activity Target type Units
companies
2019 2030 2050 2019-2030 2019-2050
Agriculture Absolute GT CO2e 11.0 6.41 2.24 42% 80% Most with
emissions from
agriculture
except
agroforestry
Beef Absolute MtCO2 1297 1299 1200 0% 7% Restaurants,

groceries, other
purchasers
Intensity tCO2/t fresh 32.41 27.94 21.57 14% 33% Commodity

weight producers (e.g.,
farms) and
processors
Chicken Absolute MtCO2 168 150 129 11% 23% Restaurants,

groceries, other
purchasers
12


farms) and
processors
Dairy Absolute MtCO2 130 129 122 1% 6% Restaurants,

groceries, other
purchasers

farms) and
processors
Maize Absolute MtCO2 349 264 199 24% 43% Restaurants,

groceries, other
purchasers

farms) and
processors
Palm oil Absolute MtCO2 325 251 192 23% 41% Restaurants,
groceries, other
purchasers

farms) and
processors
Pork Absolute MtCO2 236 209 168 11% 29% Restaurants,

groceries, other
purchasers

farms) and
processors
Rice Absolute MtCO2 1088 906 689 17% 37% Restaurants,

groceries, other
purchasers

farms) and
processors
Soya Absolute MtCO2 168 150 culture 23% 38% Restaurants,

129 groceries, other
purchasers

farms) and
processors
Wheat Absolute MtCO2 130 129 122 15% 23% Restaurants,

groceries, other
purchasers
13

tCO2/t fresh 1.35 1.21 1.02 26% 42% Commodity

Intensity weight producers (e.g.,
farms) and
processors
Roundwood Preliminary data not yet available
Box 1. In-progress work on 1.5°C pathways
Authoritative business-sector emissions corridors
The SBTi is developing publicly available “emissions corridors” at the business sector level.
Emissions corridors will be used to evaluate pathway eligibility for target-setting, as well as
enhancing SBTi collaboration with the research community and developers of sectoral
projects by describing business sector-relevant emissions milestones that are science-
based, attainable, and aligned with Sustainable Development Goals. Emissions corridors
will enable stakeholders across the business climate action community to assess target-
setting pathways with different levels of resolution from a wide range of sources and work
together to fill action gaps.
Emissions corridors will be determined based on a comparison of top-down scenarios (e.g.,

IAMs), hybrid scenarios (e.g., reflecting expert judgement), and bottom-up estimates of
mitigation potential. Starting from the global level, emissions corridors will be disaggregated
in several steps down to the business sector level. Draft emissions corridors for all GHGs,
the SBTi universal pathway, agriculture pathway, and carbon removal are included in Figure
4. This project is being conducted with the SBTi Scientific Advisory Group.
Adding land-use change to current agricultural pathways
The SBTi is planning to add the emissions associated with land-use change into preliminary
agricultural pathway data included in this road-testing draft of the report.
14

Part 4: Setting near-term and long-term science-based targets

Companies take a variety of approaches to developing near-term and long-term SBTs; however, the following high-level steps are often taken:
1. Select a base year

2. Calculate your company’s emissions
3. Set SBT boundaries
4. Choose a target year
5. Calculate targets
These steps are described in the sections below.
4.1 Select a base year
Companies need to establish a base year to track emissions performance consistently and meaningfully over the target period.
Three considerations are important for selecting a base year.
• Scope 1, 2, and 3 emissions data is verifiable and recent

• The base year should be representative of a company’s typical GHG profile7
• The base year should be chosen such that the target has sufficient forward-looking ambition
• The base year must be no earlier than 2015
7For companies that have been significantly impacted by COVID-19, the SBTi recommends selecting a base year such as 2019 instead of 2020 or 2021 when setting targets.
Alternatively, companies are welcome to use a multi-year average base year approach, as described in Chapter 5 of the Greenhouse Gas Protocol Corporate Standard. As some
companies have been less impacted by COVID-19 than others, the SBTi will still allow 2020 base years for target setting purposes and will allow companies to make their own
determination about the appropriateness of a 2020 base year.
15

Companies that have already set near-term SBTs must use the same base year for their long-term SBT. For more information on setting the base
year, please see the corporate manual (v1.1; p.11) and the Net-Zero Standard Criteria.
4.2 Calculate your company’s emissions
4.2.1 Develop a full GHG emissions inventory
Companies are required to have a thorough emissions inventory that covers at least 95% of company-wide scope 1 and 2 GHG emissions and a
complete scope 3 screening. The following points are important for alignment with the GHG Protocol and SBTi Criteria.
Ensure the target boundary is aligned with the GHG Inventory boundary
A company must select a single GHG Protocol defined method (operational control, financial control or equity share) to determine its organisational
boundary. The same method should be used to calculate its GHG emissions inventory and to define its SBT target boundaries. Both the emissions
inventory and target boundary should cover all seven GHGs or classes of GHGs covered by the UNFCCC/Kyoto Protocol.
For more information on organisational boundary-setting, please see the SBTi Corporate Manual (v1.1; p.12) and The GHG Protocol Corporate
Standard (WRI & WBCSD 2004).
Determine how to treat subsidiaries

Parent companies should set SBTs for subsidiaries in accordance with the selected organisational boundary approach. When required by the
organisational boundary approach, parent companies must include emissions from subsidiary operations in their GHG inventory.
The SBTi does allow subsidiaries to submit targets. However, regardless of whether the subsidiary has approved SBTs, parent companies must
include subsidiaries in their target boundary as required by the selected organizational boundary approach.
For more information on subsidiaries, please see the SBTi Corporate Manual (v1.1; p.13) and page 19 of the GHG Protocol Corporate Standard
(p. 19)
Exclude the use of offsets
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Offsets (including neutralisation and compensation) do not count as reductions toward meeting your science-based targets. Companies should
account for reductions resulting from direct action within their operations or value chains.
Exclude avoided emissions

A company’s product avoids emissions if it has lower life cycle GHG emissions relative to some other company’s product that provides an
equivalent function. Avoided emissions occur outside of the product’s life cycle and therefore do not count as a reduction of a company’s scope
1, 2 and 3 inventory.
For more information on avoided emission, please see the SBTi Corporate Manual (v1.1; p.13) and the World Resources Institute paper on
avoided emissions
Determine how to treat indirect use-phase emissions

Indirect use-phase emissions are generated by products that only consume energy indirectly during use over their expected lifetime. Examples
of such emissions include the washing and drying of apparel and the cooking and refrigeration of food products.
Indirect use phase emissions are not within the “minimum boundary” for category 11 (use of sold products) and are listed as “optional.”
If companies have significant indirect use-phase emissions and have levers to address them, they are encouraged to estimate these emissions
and set an optional target on these emissions. Despite this, optional scope 3 emissions will not be counted towards the two thirds boundary in
near-term SBTs and 95% boundary in long-term SBTs.
Include all mandatory scope 3 emissions

Companies must develop a complete scope 3 inventory, which is critical for identifying emissions hotspots, reduction opportunities, and areas of
risk up and down the value chain. The GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard (WRI & WBCSD,
2011), together with the Scope 3 Calculation Guidance, provide detailed guidance on how to complete a scope 3 inventory. The Scope 3 Standard
defines 15 distinct categories of upstream and downstream emissions sources and requires companies to include all relevant categories in an
inventory, based on such criteria as the magnitude of emissions or the level of influence exerted over the categories. See Chapter 7 of the Scope
3 Standard for further details.
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A useful approach to calculating scope 3 emissions is to first calculate a high-level screening inventory. Such an inventory can be used to directly
set a target or to identify high-impact categories for which more accurate data are needed. Over time, companies should strive to develop complete
inventories and improve data quality for high-impact categories (e.g., collect primary data) to better track progress against targets.
For more information on calculating a scope 3 emissions inventory, please see the corporate manual (v1.1.; p. 22) and the GHG Protocol’s
Corporate Value Chain (Scope 3) Accounting and Reporting standard.
4.2.2 Calculate relevant emissions that are reported separately from the GHG inventory
To meet SBTi criteria, companies that use bioenergy must also report direct CO 2 emissions from biomass combustion, as well as removals
associated with biomass feedstock. These emissions are reported separately from the company’s GHG inventory, in line with Greenhouse Gas
Protocol guidance.
Companies that sell or distribute fossil fuels are also required to report the use-phase emissions associated with those fossil fuels. For companies
that sell fossil fuels, these emissions are required to be reported in scope 3 category 11 (use of sold products). For companies that transport or
distribute, but do not sell, fossil fuels, these emissions must be covered by a target but are typically not included in a company’s GHG inventory.
Companies are also encouraged to calculate GHG emissions from land-use change in their target boundary, although these are not currently
required to be included in emissions inventories by the Greenhouse Gas Protocol.8
4.3 Set SBT boundaries
4.3.1 Near-term SBT boundary (scopes 1, 2, and 3)
Near-term SBTs must cover at least 95% of company-wide scope 1 and 2 emissions. For companies with scope 3 emissions that are at least
40% of total emissions (scope 1, 2, and 3 emissions), at least 67% of scope 3 emissions must also be covered. Companies in certain heavy-
emitting sectors are required to include specific emissions sources or scope 3 categories in their SBT boundary (Appendix 1).
8 Note on forthcoming land sector GHG Protocol guidance. See Appendix 3: Further guidance for companies with significant FLAG emissions for more information.
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4.3.2 Long-term SBT boundary (scopes 1, 2, and 3)
Long-term SBTs must cover at least 95% of company-wide scope 1 and 2 emissions and 95% of scope 3 emissions.
4.3.3 Additional required SBT coverage
Companies that use bioenergy must include direct CO2 emissions from biomass combustion and carbon removals associated with bioenergy
combustion in their target boundary, even though these emissions are reported outside a company’s GHG inventory. Similarly, companies that
distribute or transport, but do not sell, fossil fuels must include these in their target boundary even though they may not be reported in the
company’s GHG inventory.
Companies are also encouraged to include GHG emissions from land-use change in their target boundary, although these are not currently
required to be included in emissions inventories by the Greenhouse Gas Protocol.9 A summary of the required coverage of near-term and long-
term SBTs is shown in Table 4, and a list of available and planned sector guidance is shown in Table 5.
Table 4. Minimum boundary coverage for near-term SBTs and long-term SBTs
Emissions category Near-term SBTs Long-term SBTs
Scopes 1+2 95% minimum coverage
Scope 3 67% minimum coverage (if scope 3 emissions are 95% minimum coverage (all companies)
at least 40% of total scope 1, 2, and 3 emissions)
Use-phase emissions from sold or distributed fossil Must be covered by an absolute contraction target
fuel
Direct CO2 emissions from biomass combustion Must be included in target boundary
and carbon removals from bioenergy feedstock
9 Note on forthcoming land sector GHG Protocol guidance
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Sector-specific target boundary requirements • Transportation companies must set targets on a “well-to-wheel” basis
• Power generation companies must set an SDA target on scope 1 power generation and all sold
electricity (if scope 3 coverage is required)
• See Table 5 for an overview of available sector-specific guidance
GHG from land-use change Optional to include
Table 5. Planned and available sector-specific guidance. Currently available guidance documents apply to all aspects of near-term SBT setting and the accounting and target
boundary aspects of long-term SBT setting.
Sector Status
Apparel and footwear Currently available
Information and Communication Technology (ICT) Currently available
Power Currently available
Road transport Currently available
Aviation Available by COP26
Maritime transport Available by COP26
Forests, Land and Agriculture (FLAG) Available by end of 2021
Cement In scoping phase
Steel In scoping phase
Built environment In scoping phase
Oil & Gas Publication timeline under review
4.3.4 Meeting SBTi boundary criteria with several targets
Companies often set several targets that collectively meet the boundary requirements described above. This is a valid approach to meeting the
SBTi Criteria and Net-Zero Standard. Companies may consider setting targets that cover different activities (scope 1, 2, and/or 3) or that cover
different scope 3 categories.
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4.4 Choose a target year
Near-term SBTs must have a target year 5-10 years from the date of submission to the SBTi, while long-term SBTs must have a target year of
before 2050.
Because the ambition of long-term SBTs is target year-independent, companies should begin by choosing any long-term SBT target year before
2050. Based on the results of their target modelling, the company may wish to adjust their chosen target year to be sooner or later depending on
its strategy to achieve its long-term target.
4.5 Calculate targets
SBT methods are used to calculate near-term and long-term SBTs based on a mitigation pathway and company inputs. Companies may choose
from the following SBT methods to calculate their targets:
Eligible for near-term SBTs and long-term SBTs
• Absolute contraction: Using this method, companies reduce absolute emissions by an amount consistent with a mitigation pathway.
For near-term SBTs, the minimum reduction is calculated as a linear reduction rate, whereas for long-term SBTs the minimum reduction
is calculated as an overall amount.
• Physical intensity convergence: Using this method, all companies in a sector converge to the physical emissions intensity of an
activity or process. For near-term SBTs, the SDA formula is used, which adjusts a company’s target based on their starting point and
projected growth. For long-term SBTs, the target is just calculated based on activity’s physical intensity in a convergence year.
• Renewable electricity (scope 2 only): Using this method, companies set targets for a certain percentage of electricity procurement to
be renewable, in accordance with RE100 recommendation, by the target year.
Please refer back to this section on “Available pathways and which companies should use them” for more information.
Eligible for near-term SBTs only
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• Supplier engagement (scope 3 near-term SBTs only): Using this method, companies set a target for suppliers representing a certain
percentage of upstream emissions to set SBTs to cover those emissions.
Currently eligible for scope 3 near-term SBTs but may be removed10
• Physical intensity contraction: Using this method, companies define their own emissions intensity metric and set a reduction target
that is at least as ambitious as a minimum threshold.
• Economic intensity: Using this method, companies reduce the economic emissions intensity (e.g., tCO2 per unit of revenue) of
emissions in a chosen boundary by an amount that is at least as ambitious as a minimum threshold.
Using the methods listed above, companies must set near-term SBTs with a minimum ambition of 1.5°C for scopes 1+2 and well-below 2°C for
scope 3. Long-term SBTs must have a minimum ambition of 1.5°C across scopes. A summary of minimum target boundary, target timeframe,
and method eligibility and minimum ambition is shown in Figure 6 below.
10The main weaknesses of physical intensity contraction and economic intensity methods are that (1) the rate of emissions reduction is a less confident translation of mitigation
pathways, and in some cases seems to contradict the sectoral allocation of commonly used pathways; and (2) without intensity metric requirements, chosen metrics can be
subject to volatility that does not reflect mitigation activity.
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Figure 6. Summary of target boundary, target timeframe, and method eligibility and minimum ambition requirements for near-term and long-term SBTs
4.5.1 Calculating near-term SBTs
All companies (except those in the power generation sector and companies awaiting FLAG sector guidance) should set 1.5°C near-term SBTs
using the absolute contraction method for emissions in scopes 1 and 2. Sector-specific methods aligned with well-below 2°C remain eligible for
covering emissions in scope 3.
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Table 5 shows the currently available pathways and methods that can be used to calculate 1.5°C-aligned near-term SBTs, as well as pathways
that are currently under development. For in-depth guidance on calculating near-term SBTs, please see the SBTi Corporate Manual.
Table 5. Available and planned 1.5°C near-term pathways and methods
Pathway Allocation method Status
Global pathway, applicable to all companies Absolute contraction Currently available

• Approx. 4.2% linear annual reduction in absolute emissions (2020-2035)
Power generation Intensity convergence Currently available

• Approx. 5.7% linear annual reduction in emissions intensity (2020-2035)
Iron and steel Intensity convergence Planned for COP26
Buildings Intensity convergence Planned for COP26
Aviation Intensity convergence Planned for COP26
Cement Intensity convergence Planned for COP26
Agriculture pathway Absolute contraction In development (for release after COP26)
Agricultural commodities (beef, dairy, pork, chicken, roundwood, rice, soy, palm oil, Intensity convergence In development (for release after COP26)
maize and wheat)
Maritime transport Intensity convergence In development (for release after COP26)
Chemicals Intensity convergence Scoping phase
Aluminium Intensity convergence Scoping phase
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Pathway Allocation method Status
Other industry Intensity convergence Scoping phase
4.5.2 Calculating long-term SBTs
Calculating long-term SBTs is relatively simple because target ambition does not depend on the chosen target year and targets are less dependent
on company input data. Most companies should set a scope 1+2+3 target with the absolute contraction method (universal or agriculture pathway).
Company X will reduce scope 1+2+3 emissions 90% by 2035 from a 2018 base year.
Companies with significant emissions from activities listed in Tables 2 and 3 may also set absolute targets using activity-specific pathways.
Companies in heavy-emitting sectors may, but are not required to, set intensity targets using activity-specific pathways, as shown in Tables 2 and
3.
Companies must use the Net-Zero Tool Excel workbook to set long-term SBTs. The first step of using the Tool is to input your company’s base
year emissions. Once you have input your company’s base year emissions, two options are provided for you to calculate long-term SBTs: a “basic
tool” and a “pro tool”. Companies should first calculate targets with the basic tool, which is limited to standard absolute contraction targets, before
moving onto the pro tool. The pro tool allows companies to set activity-specific targets and to see how multiple targets can be combined to meet
the long-term SBT boundary criteria.
4.5.2.1 Input your company’s base year emissions
First, select your long-term SBT base year from the dropdown menu. The target base year must be no earlier than 2015 and the same as the
base year used for your company’s near-term SBT.
Next, input your company’s base year emissions for scopes 1 and 2, as well as each relevant and mandatory scope 3 category. Unless your
company has recalculated its base year emissions, the scope 3 categories included should match your company’s near-term SBT submission.
Detailed information on mandatory scope 3 emissions to include is located in the SBTi Target Validation Protocol (page 46).
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If your company is only setting a long-term SBT on non-FLAG emissions, only the first row of the inventory table needs to be completed. If your
company is setting a long-term SBT on FLAG emissions, the second row should also be completed.
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4.5.2.2 Calculate targets using the basic tool
The basic tool is used to calculate absolute contraction targets using the universal or agriculture pathway. Companies should first enter their long-
term SBT target year, then select whether they are setting an SBT that covers non-FLAG emissions, FLAG emissions, or targets for both. The
resulting absolute targets will be shown below. Each target should cover at least 95% of emissions in scopes 1 and 2 and 95% of emissions in
scope 3.
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4.5.2.3 Calculate targets using the pro tool
The pro tool is used to calculate activity-specific intensity and absolute targets, as well as to show companies how several targets can be used
together to meet the long-term SBT boundary coverage criteria. Companies using the pro tool should have a good understanding of how to
allocate emissions to activities such as transport and building use and purchased or produced materials. Companies should refer to existing SBTi
sector guidance (Table 5) and the Greenhouse Gas Protocol for guidance on allocating emissions.
The first step is to input your company’s target year and the number of targets expected. Next, companies should input one row per target using
the pro tool. For the tool to work properly, each target must have a mutually exclusive boundary (e.g., no overlapping targets).11
For each target row:
1. Select the scopes covered by the target. This dropdown menu includes renewable electricity targets and sector-specific options such as
“well-to-wheel” targets for transport sector companies and “all sold electricity” targets for power generation companies.
2. Select whether the target covers non-FLAG or FLAG emissions
3. Select whether the target will be calculated using the universal pathway, the agriculture pathway, or an activity-specific pathway
4. If an activity-specific pathway is chosen, select the region and whether the company is supply-side or demand-side for the activity (Table
2), which will determine whether the activity-specific pathway should be used to calculate intensity or absolute targets.12 Currently, regional
pathways are only available for agricultural commodities, while all other activities use a global pathway
5. If calculating an intensity target, input the base year activity in the units specified in the tool
6. Input the relevant emissions per scope or scope 3 category.
11 If the company wishes to set an absolute contraction target on scopes 1, 2, and 3 that overlaps with an intensity target, the company should calculate the absolute target using
the basic tool and the intensity target using the pro tool.
12 A “demand-side” company is a company that is purchasing or using, rather than producing, goods or services associated with a heavy-emitting sector. A “supply-side” company
is one that produces goods or services in a heavy-emitting sector. Priority mitigation levers may differ between demand and supply-side companies. Emissions allocated to a
supply-side activity are generally emissions in scope 1 and/or 2, as well as scope 3 category 11. Further guidance on categorizing supply-side and demand-side companies for
different activities may be published at a later date.
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As you enter emissions data for each target row, the charts at the bottom of the spreadsheet will update to show how much of your company’s
scope 1+2 and scope 3 emissions are covered. At least 95% of each should be covered, as shown by the charts.
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Your company’s targets can then be reviewed in the target output sheet of the Net-Zero Tool.
4.5.2.4 The “other industry” method
In this road-testing period, we are testing a physical intensity target-setting method for companies in heavy and medium industry. The method
should only be used by supply-side companies that produce materials or industrial products that can be expressed in a standard unit like tons.
The method is derived from the IEA Net-Zero scenario and reflects two main mitigation levers for heavy and medium industry: energy efficiency
improvements (about 18%) and increased renewable and low-carbon energy in total industrial energy consumption. This method would enable
companies in industrial sectors without an activity-specific pathway to set physical intensity targets that are science-based; however, it is still an
early “beta” version and is not guaranteed for inclusion in the final Net-Zero Standard.
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If your company is interested in exploring the “other industry” method, please use the method following the instructions below. Please also
calculate a long-term SBT that does not use the “other industry” method and send your feedback on each approach to the SBTi in our road-testing
survey.
To use the “other industry” method, input both the base year output and associated energy consumption separated by a colon (:) in the “base
year activity amount” cell of the target row, as shown by the screenshot below. Base year output should be expressed in a standard unit like tons
and energy consumption should be expressed as terajoules (TJ). Then complete the row as normal.
4.5.2.5 Target wording
Once you have calculated you company’s long-term SBT, you should consider how the target can be expressed clearly and succinctly. Companies
that have used the universal pathway to set an absolute contraction target on all non-FLAG emissions can simply express the target as:
- Company X commits to reduce scope 1+2+3 emissions 90% by 2035 from a 2018 base year.
Companies that have also set a long-term SBT on FLAG emissions can include a second target:
- Company X also commits to reduce emissions from agriculture, forestry, and land-use 80% by 2035 from a 2018 base year
Companies that have used the pro tool to calculate several targets may need to include more detail in their target wording. First, companies
should express their intensity target(s). For example:
- Company Y commits to reduce the scope 1+2 emissions per ton of steel 91% by 2040 from a 2018 base year.
Next, companies should express their absolute target(s). Although the SBTi will need to review each activity-specific target to validate long-term
SBTs, companies may have flexibility combining several absolute targets that cover the same emissions scope(s) or scope 3 category(s). For
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example, a company that has calculated two absolute targets for scope 3 category 3 upstream transport from trucks and aviation may combine
them into a single target:
- Company Y also commits to reduce scope 3 emissions from upstream transport by 88%.
Lastly, companies that set an intensity target covering a subset of scope 1+2 emissions and an absolute target covering the remaining emissions
may express the targets as follows:
- Company Z commits to reduce scope 1+2 emissions per ton of aluminium 80% by 2040 from a 2018 base year. Company Z
commits to reduce all other scope 1+2 emissions 90% by 2040 from a 2018 base year.
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Box 2. A note on FLAG emissions
The forest, land and agriculture (FLAG) sector, also known in the scientific community as the agriculture, forest, and other land use (AFOLU)
sector, is responsible for nearly a quarter of global GHG emissions and up to 30% of the needed mitigation by 2050 when land sector removals
are included. Many companies with land-intensive operations have committed or set targets through SBTi, and many are also reporting their
emissions publicly.
Despite this, few companies account for FLAG emissions or removals in their targets or disclosures. A key barrier is the lack of available
standards, methods and the difficulty of data gathering for these activities. Land sector emissions (“biogenic carbon”) accounting and target
setting are being standardised through two key projects led by SBTi partner organisations, and as a result many companies will be addressing
these emissions for the first time.
Led by WWF, the SBTi Forest, Land and Agriculture (SBTi FLAG) project is currently developing guidance for companies in land-intensive
sectors such as food, agriculture, and forestry to set science-based targets that fully incorporate deforestation and other land-related emissions.
This guidance will include two approaches: 1. demand side, sector wide pathway and 2. 10 commodity-specific pathways for supply side
companies. This project is due to complete by the end of 2021.
Alongside this, The Greenhouse Gas Protocol is undertaking a process to develop new guidance on accounting for carbon emissions and
removals. This project is due for completion in 2022. The GHG Protocol guidance will provide information to companies on how to account for
and report the following activities in their greenhouse gas inventories:
• Land use/management and land use change

• Carbon removals and storage
• Bioenergy and other biogenic products
• Related topics
If your company has already calculated emissions from FLAG activities, you should include these within the target boundary of both your near
and long-term science-based targets. Several of the companies participating in this road test are also contributing to the development of the
GHG Protocol and SBTi FLAG projects, and we are keen to ensure alignment with these projects throughout the road test process.
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Land-use intensive companies that have not calculated FLAG emissions may continue to exclude these emissions, or optionally perform these
calculations as part of the road testing process. Before the GHG Protocol guidance for land sector emissions is published, we recommend you
follow the guidance of the documents stated in Table 6.
Please note that limited support will be provided to companies that choose to perform these calculations during the road test due to resource
constraints. However, we do encourage companies that expect to have significant FLAG emissions to seek to further understand these
emissions and keep up to date with these projects
Table 6. Additional guidance documents for calculation FLAG emissions
Publisher Document
GHG Protocol • Corporate Standard

• GHG Protocol Scope 3 Standard
• Product Standard
• Agriculture Guidance
• LULUCF project guidelines
• Brazil forestry tool
IPCC • Guidelines for National GHG Inventories.

• 2006 Guidelines, Good Practice Guidance for LULUCF
• 2019 Refinement
ISO • ISO 14064 1:2018
Quantis • Accounting for Natural Climate Solutions Guidance
Gold Standard • Value Change Initiative
For further details on this topic, please see Appendix 4: Further guidance for companies with significant FLAG emissions.
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Box 3. Can insetting count towards my scope 3 reduction?
There are multiple definitions for the term “insetting”(also referred to as supply chain interventions) and no standardization of the term, which
makes it difficult to give a clear determination of what can and can’t be included within scope 3 reductions. Insetting is used to describe projects
that are wholly contained within a scope 3 supply chain boundary of a company, a project partially within their scope 3 supply chain boundary
(spanning their supply chain and other companies’ supply chains), and a project adjacent to a supply chain boundary. Accounting approaches
for insetting also vary with the use of both project accounting and corporate accounting.
As this issue has not been settled to date in the GHG Protocol process, the SBTi recommends a conservative approach at this time. Companies
should only include emission reductions or removals from “insetting” projects that use a corporate accounting approach and are wholly contained
within their supply chains or the portion of a “partially-included” project that is within their supply chain and linked directly to sourcing.
Further work is ongoing to standardise the definition of insetting and a clear accounting methodology. For these reasons, the SBTi will assess
insetting projects on a case-by-case basis during the validation process and may not approve their use.
Please see Appendix 3: Can companies include nature-based solutions (NBS) in science-based targets below for further details.
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Part 5: Updating and communicating targets

5.1 What steps can you take if your current net-zero targets don’t align with the
requirements of the Net-Zero Standard?
The number of businesses committing to reach net-zero emissions has rapidly grown over the
last two years, and the SBTi expects that many companies participating in this road test have
already made commitments to net-zero in advance of the launch of the Net-Zero Standard13.
The below guidance is designed to help you align your existing near and long-term net-zero
targets with the Net-Zero Standard.
5.1.1 How can you ensure your near-term targets align with the Net-Zero Standard?
As described in the section above on changes to near-term SBT criteria, the SBTi is updating
its guidance and ambition based on the latest climate science to ratchet ambition up to 1.5°C
for all companies. 1.5°C-aligned targets are now the most common choice for businesses,
representing 51% of all approved targets and 66% of all submissions to the SBTi in 202114.
The new strategy is being rolled out in response to increasing urgency for climate action and
the success of science-based targets to date. Because of this, near-term targets that do not
align with 1.5°C will no longer be accepted as of July 15, 2022.
For companies with targets that do not already align with the changes to near-term SBT
criteria, we invite you to upgrade your target. When updating your near-term science-based
targets, please review the requirements in addition to the increase in scope 1 & 2 ambition to
1.5°C for near-term science-based targets. This includes a reduced target timeframe and
increased ambition for scope 3 emission reductions (see Table 1). It is important to note that
companies must meet these new requirements for near-term science-based targets to gain
approval for long-term science-based targets and overarching net-zero commitments.
5.1.2 How can you ensure you long-term targets align with the Net-Zero Standard?
In addition to this, an essential component of a corporate net-zero strategy is a company’s

long-term science-based target. While companies may reach a balance between emissions
and removals before they reach the depth of decarbonisation required to limit warming to
1.5ºC, this is only a transient state on the journey to net-zero emissions. Companies must
reduce emissions to this level before claiming to have reached net-zero. In other words, a
company’s net-zero target date may not come before its long-term science-based target date.
For companies that have not set long-term emission reduction targets, we encourage
you to adopt the long-term SBTs modelled through this process and express commitment to
setting long-term targets in alignment with science as part of your net-zero ambition.
For companies that have set long-term emission reduction targets to reach net-zero that
are not as ambitious as their modelled long-term SBTs, we recommend that you revisit
13 Analysis by Climate Action Tracker tells us that 73% of global emissions are covered by net-zero targets, and the
ECIU and Oxford’s March 2021 report showed that, of the 2,000 publicly-traded companies included in the Forbes
Global 2000 list, 21% of these companies had net-zero targets.
14 Figures correct at the time of writing in July 2021.
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your implementation strategy and consider increasing the ambition of your long-term targets.
We would also encourage you to provide feedback through the road test survey. The SBTi is
keen to understand where companies' current long-term emission reduction targets diverge
from long-term SBTs modelled during this road test.
For companies that have set net-zero target dates but feel they will be unable to reach
the level of emission reductions required by their long-term SBT in that timeframe, we
would urge you to review your implementation strategy to explore additional opportunities to
reduce emissions as a first step. If you expect that you will not be able to meet the required
level of emission reductions by that date, the next option is to consider moving the target date
of your net-zero commitment further into the future.
The SBTi will begin to validate long-term SBTs and net-zero commitments in January 2022.
The SBTi is also keen to understand where companies had already set targets that are in
alignment with requirements and how these targets were derived.
Please note that methods for long-term science-based target setting are still subject to change.
5.2 How to upgrade your near-term SBTs to align with the Net-Zero Standard
Companies that have existing near-term SBTs that do not meet the updated SBTi criteria are
invited to upgrade their targets. It is important to note that companies must meet these new
requirements for near-term science-based targets to gain approval for long-term science-
based targets and overarching net-zero commitments.
In order to update targets, companies can resubmit using the SBTi resubmission service by
emailing a completed target submission form to targets@sciencebasedtargets.org and paying
a $2,490 fee.
Companies wishing to validate their upgraded target(s) can instead follow a simplified process
to achieve SBTi approval if they meet the following conditions:
1. Base year and target year of the updated target remains unchanged
2. The assumptions used to model the original target continue to be valid (e.g.,
significance thresholds, boundary, growth projections, etc.)
The process companies follow during the revalidation of their upgraded targets is outlined
below:
1. Company submits the one-page recalculation form

2. Initial screening to check compliance with all conditions above
3. Desk review to check ambition alignment
4. Final decision on compliance is sent to companies
More information can be found in the Target Validation Protocol document.
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5.3 How to communicate with stakeholders when net-zero targets do not meet
the Net-Zero Standard requirements
We understand that when companies have already set net-zero commitments, navigating
communication with stakeholders can be challenging if the targets do not comply with the Net-
Zero Standard. In this section, we provide advice and guidance on how to communicate with
stakeholders in this situation.
There are several key areas where we expect that companies’ current net-zero strategies may
not align with the Net-Zero Standard:
• Near-term science-based targets do not meet updated SBTi criteria (please see here
and the section on changes to near-term SBT criteria for more information) for:
o Scope 1 & 2 ambition
o Scope 3 ambition
o Timeframe
• Long-term science-based targets do not meet the Net-Zero Standard criteria (see
here for more information) for:
o Long-term science-based targets have not been included in a company’s net-
zero strategy
o Long-term emission reductions targets are not as stringent as those required
by the Net-Zero Standard
o Companies do not expect to reach long-term science-based targets by its
current net-zero target date
We have developed some key messages to support companies with this process below.
Please note that these are only suggestions and companies may adapt these points to suit
their needs.
• The SBTi’s Net-Zero Standard is the first global science-based standard to guide
companies in setting net-zero targets and our company is among the first 80
companies to trial the Standard first-hand.
• To be confident that our actions are in line with climate science and mitigate the risk
of following a pathway that may not be consistent with addressing the climate crisis,
we have taken part in the SBTi’s Net-Zero company road test.
• As part of the road test process, we have identified clear next steps to adjust our
current commitment and/or target(s) to align with this first global science-based Net-
Zero Standard. We believe this will help us ensure the robustness and impact of our
targets.
• Responding to the urgency and scale of the climate emergency, the SBTi is
ratcheting up its expectations for businesses. In order to support this, we must listen
to the science and enhance the ambition of our net-zero commitment.
• We are committed to following a science-based net-zero pathway, and as part of this,
we are reviewing our climate mitigation strategy to understand opportunities to
enhance our ambition.
38

Part 6: Conclusion and next steps

The SBTi would like to thank you for participating in road testing the new Net-zero Standard.
Your company’s input is highly valued. Only with your feedback can the SBTi provide clear
and practical guidance to companies on how to align with what climate science tells us is
necessary to reach global net-zero before 2050.
After you have tried out the tool and used the supporting materials, we would like to
understand your views on certain key topics via this survey. The survey asks questions on
the standard in general, the feasibility, key challenges, and the ease of use of the tool and
the supporting materials. The survey will be open until Tuesday 31st August.
We want to make sure that you feel supported as much as possible during this road test. If
you need any additional support, please reach out to paulina.tarrant@cdp.net or
emma.watson@cdp.net. We are also offering the following:
• Three workshops
• Office hours
• One-on-ones and deep dive interview (if requested)
The SBTi’s Net-Zero Standard will be launched before COP26 in October 2021. You can find
a summary of our timeline until then below (Figure 7).
Figure 7. Net-Zero Standard project timeline
The SBTi will begin validating net-zero targets in January 2022.
Thank you again; your feedback helps to make the Net-zero Standard as clear and
practical as possible which drives the advancement of a global zero-carbon economy.
39

Appendix 1: Sector-specific guidance for long-term SBTs

Sector-specific guidance and methods are currently available for many sectors. All new sector-specific guidance that becomes available will be
uploaded to the sector development page on the SBTi website. The SBTi has sector-specific requirements related to the use of target-setting
methodologies and minimum ambition levels.
Table 7. Sector-specific guidance for long-term SBTs
Sector Eligible methods Guidance/Notes
Power Generation The intensity convergence method must be used by power Companies in the power sector with scope 3 emissions that
generation companies, as specified in the Guidance for represent 40% or more of overall emissions must set an
Electric Utilities. intensity target covering all sold electricity (including
purchased and resold electricity in scope 3 category 3), in
addition to a target covering power generation in scope 1.
Forest, Land-use & Some companies will be required to set FLAG targets that are The FLAG sector guidance is planned for completion by the
Agriculture (FLAG) separate from their SBTs covering all other emissions. FLAG end of Q4 2021.
targets must use the FLAG-sector absolute contraction method
or the intensity convergence method.
Intensity pathways will be available for beef, dairy, pork,

chicken, roundwood, rice, soy, palm oil, maize, and wheat.
Agroforestry companies will be required to use the intensity
convergence method for roundwood.
40 Version 1.1 | July 2021

SBTi Net-Zero Corporate Manual

Oil & Gas The SBTi is developing target-setting methods for oil & gas For target validation by the SBTi, “Oil & Gas” includes, but is
companies and cannot validate targets for this sector before not limited to, integrated Oil & Gas companies, Integrated Gas
the guidance is completed. companies, Exploration & Production companies, Refining and
Marketing companies, Oil Products Distributors, Gas
Distribution and Gas Retailers.
The SBTi will assess companies on a case-by-case basis to

determine whether companies will be classified as Oil & Gas
companies for SBTi validation, and if so, reserve the right to
not move forward with their validation until after the SBTi Oil &
Gas sector development has been completed
Fossil Fuel Sale/ In addition to guidance for the primary sector, scope 3 targets Targets must be set for scope 3 category 11, irrespective of
Transmission/ must be set on scope 3 category 11 “use of sold products” the share of these emissions compared to the total S1+S2+S3
Distribution* emissions using absolute contraction. emissions of the company. Separate scope 3 targets may
need to be set in this case.
*This information is only
applicable to companies
that receive less than
50% of their revenue
from fossil fuel sale,
transmission, or
distribution. For
companies that receive
50% or more of their
revenue from these
activities, please refer to
the Oil & Gas section
above.


Financial Institutions The SBTi is developing a net-zero standard for financial The initiative defines a financial institution as one that engages
institutions and cannot validate targets for this sector before in investment activities as part of its core functions. These
the guidance is completed. include, but are not limited to, the following:
1. Asset management/asset owners

2. Retail and commercial banking activities
3. Insurance companies (when functioning asset
managers)
4. Mortgage real estate investment trusts (REITs)
In addition, if at least 5% of a company’s revenue comes from

activities such as those described above, they would be
considered a financial institution.
Transport (Original The absolute contraction and intensity convergence methods Tested vs Real emissions for OEMs original equipment
Equipment are both recommended for companies in this sector. Target manufacturers:
Manufacturers/ boundary must cover well-to-wheel emissions (WTW), as
Automakers) specified in the SBT transport resources. Original equipment manufacturers must convert their base
year emissions figures for the use-phase of their products into
real emissions with the use of global standards (e.g.,
Worldwide Harmonized Light Vehicle Test Procedure -WLTP)
when available. In the absence of a normalized test procedure
for certain vehicle types, companies are invited to present and
justify their own estimates/simulations based on fuel
consumption-specific duty cycles to the SBTi.


Transport services The absolute contraction and intensity convergence methods Refer to the SBTi Transport guidance for a description of all
(Aviation/ shipping/ are both recommended for companies in this sector. Target transport sub-sectors covered by the SDA Transport tool and
trucks/ cars) boundary must cover well-to-wheel emissions (WTW), as to learn about best practices in target-setting for transport
specified in the SBT transport resources. activities.
For companies in the aviation and maritime transport sectors,

please consult the SBTi transport resources for further
information on sector-specific transport methodologies.
Well-to-wheel boundary:
Companies setting targets for transport-related emissions

should cover well-to-wheel emissions (WTW) in their target
boundary to accurately capture emissions shifts between the
tank-to-wheel (TTW) and the well-to-tank (WTT), for example,
due to changes in power train technologies.
Buildings The absolute contraction and intensity convergence methods Real Estate Investment Trusts (REITs) wishing to set targets
are both recommended for companies in this sector. must specify if they are a mortgage-based REIT or equity-
based REIT.
Equity REITs must pursue the regular target validation route

for companies. Mortgage REITs must instead utilize the
Financial Institutions guidance for setting SBT.
The SBTi is in the scoping phase of developing guidance for

companies and sectors of the built environment.
Industrial Sectors: The absolute contraction and intensity convergence methods The SBTi is in the scoping phase of developing guidance for
are both recommended for companies in this sector. companies in the cement, steel, and aluminium sectors.
• Iron and Steel
• Cement
• Aluminium


Chemicals The absolute contraction and intensity convergence methods The SBTi is in the scoping phase of developing guidance for
(other industry) are both recommended for companies in this companies in the chemicals sector.
sector.
All other sectors The absolute contraction method is recommended for Companies should allocate emissions to relevant activities as
companies in all other sectors. If the company has emissions per the Greenhouse Gas Protocol, where guidance is
allocated to a supply-side activity in Table 2 or 3, the intensity available. Emissions allocated to a supply-side activity are
convergence method may be used to cover those emissions generally emissions in scope 1 and/or 2, as well as scope 3
instead. category 11 (use of sold products) for a relevant activity in
Tables 2 or 3.
All other sectors: See “All other sectors” Optional guidance is available for companies in the ICT sector.
• Information and Optional guidance is available for companies in the Apparel

Communication and Footwear sector.
Technology
Providers
• Apparel and
Footwear


Appendix 2: Further guidance for companies with significant

FLAG emissions
The forest, land, and agriculture (FLAG) sector, also known in the scientific community as the
agriculture, forest, and other land use (AFOLU) sector, has been historically difficult to
evaluate through GHG accounting and target setting approaches. However, AFOLU
represents about 25% of anthropogenic greenhouse gas (GHG) emissions (10–12 GtCO2e
per year) with about half from agriculture and half from land use, land-use change, and
forestry (LULUCF)15. GHG emissions of the FLAG sector need to be halved by 2050, and at
the same time agricultural production is expected to increase 50%16.
Additionally, the AFOLU sector has the potential to deliver up to 30% of needed mitigation
actions from now to 2050, including removals. Aligning the AFOLU sector with 1.5°C
pathways through both reductions and removals is feasible through reduced land-use
change, enhanced carbon sinks, reduced agricultural emissions, and reduced overall
production through demand shifts.
Many companies with land-intensive operations have committed or set targets through SBTi,
and many are also reporting their emissions publicly. Despite this, few companies account
for AFOLU emissions or removals in their targets or disclosures. A key barrier is the lack of
available standards, methods and data availability. Land sector emissions (“biogenic
carbon”) accounting and target setting are being standardised through two key projects led
by SBTi partner organisations, and as a result many companies will be addressing these
emissions for the first time.
Land sector guidance is evolving
WWF, a founding member of SBTi, is developing specific emission reduction pathways for
companies with land sector emissions in their supply chains through the SBTi Forest, Land
and Agriculture (SBTi FLAG) project. The outputs of this project will allow companies to set
science-based targets that fully incorporate deforestation and land-related emissions. This
guidance is aimed at companies in land-intensive sectors, which includes sectors such as
food, agriculture and forestry.
These new pathways will include not only emissions reduction, but also removals within the
land sector. It includes an overall AFOLU sector mitigation pathway as well as 10 specific
mitigation pathways for major commodities: beef, chicken, dairy, maize, palm oil, pork, rice,
soy, wheat, and roundwood.
In parallel and in coordination, The Greenhouse Gas Protocol is undertaking a process to

develop new guidance on carbon removals and land use. New comprehensive guidance on
accounting and target setting for land-based emissions means that companies have a new
opportunity, and requirement, to bring both emission reductions and removals in the land
sector into their mitigation targets.
15 Roe, S., Streck, C., Obersteiner, M. et al. Contribution of the land sector to a 1.5 °C world. Nat. Clim. Chang. 9,
817–828 (2019). https://doi.org/10.1038/s41558-019-0591-9
16 https://research.wri.org/sites/default/files/2019-07/WRR_Food_Full_Report_0.pdf


Land-use intensive companies that have not calculated FLAG emissions may continue to
exclude these emissions, or optionally perform these calculations as part of the road testing
process. While GHG Protocol guidance for land sector emissions is under development, we
recommend the following guidance documents in the interim in Table 8 below.
Please note that limited support will be provided to companies that choose to perform these
calculations during the road test due to resource constraints. However, we do encourage
companies that expect to have significant FLAG emissions to seek to further understand
these emissions and keep up to date with these projects.
Table 8. Additional guidance documents for calculating FLAG emissions.
Publisher Document
GHG Protocol ● Corporate Standard

● GHG Protocol Scope 3 Standard
● Product Standard
● Agriculture Guidance
● LULUCF project guidelines
● Brazil forestry tool
IPCC ● Guidelines for National GHG Inventories.

● 2006 Guidelines, Good Practice Guidance for LULUCF
● 2019 Refinement
ISO ● ISO 14064 1:2018
Quantis ● Accounting for Natural Climate Solutions Guidance
Gold Standard ● Value Change Initiative
What counts towards FLAG emissions?
The GHG Protocol guidance will provide information to companies on how to account for and
report the following activities in their greenhouse gas inventories:
● Land use and land-use change

● Carbon removals and storage
● Bioenergy and other biogenic products
● Related topics
How can you determine if your company's FLAG emissions are significant?
Land-use intensive companies in the food and beverage, agriculture or forest sectors, and
companies downstream of these sectors (i.e., when companies purchase products from
these sectors), typically have significant FLAG emissions. Companies in the infrastructure,
construction, and real estate sectors may also have significant impacts and opportunities
related to FLAG.


FLAG target-setting will eventually become a requirement for companies with significant land
sector emissions that wish to set science-based targets. The SBTi will determine a
materiality threshold of what is considered to be significant in advance of this requirement
coming into play.
What options are available for your company to set FLAG emission reduction
targets?
For near-term science-based targets
The SBTi FLAG project, which will provide tools and guidance for companies to set near-
term SBTs, is expected to be completed by Q4 2021. In the meantime, companies that wish
to set near-term science-based targets on FLAG emissions may opt to use the absolute
contraction approach for all emissions (including FLAG emissions). This option will continue
to be available for companies after the launch of the FLAG rather than using the FLAG tools
separately.
After launch, for companies that do exclude emissions from the FLAG sector, there will be an
initial period of at least six months after the FLAG tool is launched where the use of the
FLAG tools to set goals for forest, land, and agriculture emissions is voluntary but
recommended.
As mentioned previously, FLAG target-setting will eventually become a requirement for

companies with significant land sector emissions that wish to set science-based targets.
For long-term science-based targets
If your company has already calculated emissions from FLAG activities, please see 4.5.2
Calculating long-term SBTs. Several of the companies participating in this road test are also
contributing to the development of the GHG Protocol and SBTi FLAG projects, and we are
keen to ensure alignment with these projects throughout the road test process.


Appendix 3: Can companies include nature-based solutions in

science-based targets?
Many companies seek to include actions in Nature-Based Solutions (NBS) in their strategies
to achieve their science-based targets. When done right, Nature-Based Solutions for climate
mitigation are a genuine win-win. Companies deliver on their climate goals and simultaneously
support nature and address societal challenges.
Using NBS to achieve both near and long-term science-based targets
Companies with land sector emissions
Right now – companies with Forest, Land, or Agriculture (FLAG) emissions in their supply
chains can include those emissions in their inventory and emission reduction target setting17.
This applies to both near-term science-based targets, as well as long-term science-based
targets that form part of a company’s commitment to achieving net-zero emissions.
Alongside reducing consumption of fossil fuels, companies that choose this approach can
engage in NBS-related reduction activities to meet their science-based targets within their
supply chains. Some examples of these activities are stopping deforestation and conversion
and peatland and mangrove restoration. Companies should deploy NBS in accordance with
the nature/conservation mitigation hierarchy of “Protect, Manage, Restore”.
Companies without land sector emissions.
All companies should follow the climate mitigation hierarchy, ensuring efforts to eliminate and
reduce emission are prioritised over investments outside of supply chains to compensate.
This means companies without land-sector emissions must prioritize eliminating and reducing
fossil fuel emissions within their operations and supply chains. Because of this, companies
without exposure to land-based emissions are required to meet their near-term or long-term
SBTs through reductions in fossil fuel emissions without using NBS.
Corporate funding for NBS should not be used to avoid or delay action to reduce emissions
from fossil fuels, but companies outside of the land sector may seek to enhance ambition
beyond their SBTs and are welcome and encouraged to explore investments in NBS as part
of their compensation and neutralisation strategies, and as outlined in WWF & BCG’s Blueprint
for Corporate Action on Climate and Nature.
17 While GHG Protocol guidance for land sector emissions is under development, we recommend the following
guidance documents in the interim: GHG Protocol Corporate Standard, Scope 3 Standard, Product Standard,
Agriculture Guidance, LULUCF project guidelines, Brazil forestry tool. IPCC. Guidelines for National GHG
Inventories. 2006 Guidelines, Good Practice Guidance for LULUCF, 2019 Refinement, ISO. ISO 14064 1:2018.
Quantis. Accounting for Natural Climate Solutions Guidance. Gold Standard, Value Change Initiative.


Table 8. Additional guidance documents for calculating FLAG emissions.
Can use the following strategies to meet science-based targets
Land companies ● Reduce emissions from fossil fuels.

with land emission in the supply chain ● NBS for land sector emissions/removals
o informed by nature/conservation mitigation hierarchy
Protect, Manage, Restore
Non-land companies ● Reduce emissions from fossil fuels.

without land emissions in the supply o NBS investments encouraged but do not count towards
chain emission reductions.


Appendix 4: Transitioning to global net-zero in line with climate

and sustainability goals
Through the Paris Agreement, parties and signatories committed to “holding the increase in
global average temperature to well below 2°C above pre-industrial levels and pursuing efforts
to limit the temperature increase to 1.5°C above pre-industrial levels.”
In the years since the Paris Agreement was signed, the imperative to limit warming to 1.5°C
has become even stronger. Against the backdrop of increasingly frequent and destructive
climate-related disasters, the IPCC Special Report on 1.5°C delivered a harrowing scientific
consensus: while impacts to human health, society, and nature associated with 1.5°C of
warming are worse than previously acknowledged, the risks associated with exceeding 1.5°C
are far higher. To minimise these risks, the IPCC SR15 highlights pathways that limit warming
to 1.5°C with no or limited overshoot (overshoot <0.1°C).
As described in the IPCC SR15, pathways that limit warming to 1.5°C, with no or limited
overshoot, require reaching approximately net-zero CO2 emissions by no later than 2050,
accompanied by rapid declines in non-CO2 emissions. This is accomplished through rapid and
profound transitions in the global energy, industry, urban, and land systems that involve:
● Full or near-full decarbonisation for energy and industrial CO2 emissions achieving a
zero-emission energy supply system by mid-century
● Eliminating CO2 emissions associated with agriculture, forestry, and land-use by 2030
● Deep reductions in non-CO2 emissions from all sectors
● Removing CO2 from the atmosphere to neutralize residual emissions and, potentially,
to sustain net negative emissions that reduce cumulative CO2 in the atmosphere over
time.
The different system transformations in 1.5°C mitigation pathways occur concurrently and all
of them are needed for society to reach net-zero emissions and limit warming to 1.5°C. An
understanding of the synergies and trade-offs between different climate change mitigation
pathways and sustainable development should also guide climate action. Many such
interactions exist. For example, research indicates that exceeding around 100 EJ of bioenergy
per year could put unsustainable pressure on available land, food production and prices,
preservation of ecosystems, and potential water and nutrient constraints. Some approaches
to CO2 removal also face technical, environmental, and socio-political challenges. These
factors suggest that target-setting pathways should minimize residual emissions to avoid
“locking in” dependence on CO2 removal and that demand-side mitigation options such as
modal shifts, reduced energy use, and increased circularity should be considered part of
climate strategies.


Appendix 5: Acronyms
AFOLU Agriculture, Forest and Other Land Use
CDR Carbon Dioxide Removal
COP Conference Of the Parties
EAG SBTi Net-Zero Expert Advisory Group
FLAG Forests, Land-use and Agriculture
GHGs Greenhouse Gases
GMST Global Mean Surface Temperature
IPCC Intergovernmental Panel on Climate Change
LT SBT Long-term Science-Based Target
LULUCF Land-use, Land-use change and Forestry
NBS Nature-based Solutions
NT SBT Near-term Science-Based Target
SR15 IPCC Special Report on 1.5˚C
SAG SBTi Scientific Advisory Group
TAG SBTi Technical Advisory Group
UNEP The United Nations Environment Programme
UNFCCC United Nations Framework Convention on Climate Change


Appendix 6: Glossary
Abatement
Definition Comments
Measures that companies take to prevent, reduce Also see:

or eliminate sources of GHG emissions within ● Decarbonization
their value chain. Examples include reducing
energy use, switching to renewable energy and
retiring high-emitting assets.
Absolute contraction
Definition Comments
Method used to calculate absolute emissions Also see:

reduction targets that requires organizations to ● Science-based target methods
reduce annual emissions by an amount
consistent with underlying mitigation pathways.
Bioenergy
Definition Comments
Energy generated from the combustion of

biomass. In certain cases, bioenergy is
considered “carbon neutral” because
combustion-related CO2 emissions are balanced
by CO2 that is sequestered during the growth of
bioenergy feedstock.
Biomass emissions
Definition Comments
Definition to be added
Carbon Dioxide Removal (CDR)

Definition Comments
According to the Intergovernmental Panel on Also see:

Climate Change (IPCC), “anthropogenic activities ● Nature-based Solutions
removing CO2 from the atmosphere and durably
storing it in geological, terrestrial, or ocean
reservoirs, or in products”
The removals are either nature-based, geological
or a hybrid.
Climate change mitigation

Definition Comments
According to the Intergovernmental Panel on Also see:

Climate Change (IPCC), “a human intervention to ● Corporate Climate Mitigation Blueprint
reduce emissions or enhance the sinks of ● Mitigation strategy
greenhouse gases.”


Compensation
Definition Comments
Measures that companies take to prevent, reduce This term is under review and is being used as a
or eliminate sources of GHG emissions outside placeholder.
their value chain. Examples include purchasing Also see:
carbon credits and providing direct finance to ● GHG emissions
climate mitigation programs. ● Offsetting
● Value chain emissions
Corporate climate targets

Definition Comments
Goals set by a corporation to reduce the Also see:

corporation’s impact on the climate. Targets may ● Abatement
include a variety of climate forcers across ● Compensation
different corporate activities (i.e. operations, ● Neutralisation
value chain, or products) and may use emissions
abatement, compensation, or neutralisation
Decarbonization
Definition Comments
The process by which CO2 emissions associated

with electricity, industry, and transport are
reduced or eliminated.
Emissions (or GHG) inventories

Definition Comments
According to the GHG Protocol, a “quantified list Also see:

of an organization’s GHG emissions and ● Scope 1 inventory
sources.” Emissions inventories typically include ● Scope 2 inventory
emissions in scopes 1, 2, and 3. ● Scope 3 inventory
Forests, land and agriculture (FLAG) emissions

Definition Comments
GHG emissions from Forestry, Land use and Other similar related terms are Agriculture,
Agriculture. Examples of key sources of FLAG Forestry and Other Land uses (AFOLU) and
emissions include: deforestation, forest & Land-use, Land-use change and Forestry
grassland fires enteric fermentation, fertilizers, (LULUCF; AFOLU + agriculture GHGs)
manure management and rice cultivation
Reducing FLAG emissions, as well as enhancing
land-related carbon sinks through activities such
as reforestation, is an important climate change
mitigation opportunity.
Global emissions budget

Definition Comments
A cumulative emissions threshold that must not Also see:

be exceeded in order to limit global temperature ● Greenhouses gases


rise by a specified amount and probability. ● Paris Agreement

Emissions budgets can be determined for CO2
only or all greenhouse gases (GHGs).
Greenhouse gases (GHGs)

Definition Comments
Gases which absorb and re-emit infrared

radiation, thereby trapping it in Earth’s
atmosphere. Includes carbon dioxide (CO2),
water vapor, methane (CH4), nitrous oxide
(N2O), hydrofluorocarbons (HFCs),
perfluorocarbons (PFCs), sulphur hexafluoride
(SF6), and nitrogen trifluoride (NF3).
Greenhouse Gas (GHG) emission reduction targets

Definition Comments
Goals set by an organization to reduce direct or Also see:

indirect emissions by a specified amount ● Greenhouse Gas emissions
Insetting
Definition Comments
Insetting is used to describe projects that are There are multiple definitions for the term
wholly contained within a Scope 3 supply chain “insetting” in use and no standardization
boundary of a company, a project partially within of the term.
their Scope 3 supply chain boundary (spanning
their supply chain and other companies’ supply
chains) and a project adjacent to a supply chain
boundary.
Intensity convergence
Definition Comments
Method used to calculate emissions intensity Also see:

targets based on the principle of converging to a ● Science-based target methods
sector-wide physical emissions intensity in a ● Physical emissions intensity
future year of a mitigation pathway.
Intergovernmental Panel on Climate Change (IPCC)

Definition Comments
United Nations body for assessing the science Also see:

related to climate change ● IPCC Special Report on 1.5°C (SR15)
Long-term science-based target (LT SBT)

Definition Comments
GHG reduction targets that are in line with what

the latest climate science deems is necessary to


reach net-zero at the global or sector level in

1.5°C pathways before 2050.
Near-term science-based target (NT SBT)

Definition Comments
GHG reduction targets that are in line with what

the latest climate science deems necessary to
limit warming to 1.5°C above pre-industrial levels
and are achieved within a 5-10 year timeframe
from the date of submission.
IPCC Special Report on 1.5˚C (SR15)

Definition Comments
A Special Report requested by the United Also see:

Nations on the impacts of global warming of ● Paris Agreement
1.5°C above pre-industrial levels and related ● Pre-industrial levels
global greenhouse gas emission pathways, in the
context of strengthening the global response to
the threat of climate change, sustainable
development, and efforts to eradicate poverty.
The report includes over 6,000 scientific
references and was prepared by 91 authors from
40 countries
Mitigation strategy
Definition Comments
A set of measures planned by a company to Also see:

mitigate GHG emissions that may include ● Mitigation
abatement, insetting, compensation and ● Abatement
neutralisation. ● Insetting
● Compensation
● Neutralisation
Nature-based Solutions (NBS)

Definition Comments
The WWF defines NBS as “Ecosystem Also see

conservation, management and/or restoration ● Carbon-dioxide removal
interventions intentionally planned to deliver ● Neutralisation
measurable positive climate adaptation and /or ● Insetting
mitigation benefits that have human development
and biodiversity co-benefits managing
anticipated climate risks to nature that can
undermine their long-term effectiveness.”
Neutralisation
Definition Comments
Neutralisation with regards to GHG emissions are Also see:

the measures that companies take (inside and ● Nature-based Solutions


outside of the value chain) to remove carbon from ● Carbon credits

the atmosphere to counterbalance the impact of
a source of emissions that remains unabated.
Residual emissions
Definition Comments
Emissions sources that remain unabated in a Also see:

specific year of a mitigation scenario. Long-term ● Paris Agreement
SBTs are consistent with the level of residual
emissions in the year of global or sector net-zero
in 1.5°C-aligned mitigation pathways with low or
no overshoot.
Science-based targets (SBTs)

Definition Comments
Targets that are in line with what the latest climate Also see:
science says is necessary to meet the goals of ● Interim Science-Based Targets
the Paris Agreement – to limit global warming to ● Paris Agreement
well-below 2°C above pre-industrial levels and ● Pre-industrial levels
pursue efforts to limit warming to 1.5°C
Science-based target methods

Definition Comments
Methods used to calculate science-based targets Also see:

from a mitigation pathway, company input ● Absolute contraction
variables, and an allocation formula. ● Intensity convergence
SBTi Net-Zero Expert Advisory Group (EAG)

Definition Comments
Advisory body to the SBTi consisting of

representatives from civil society organizations,
corporate climate action initiatives, research
agencies, and other stakeholders that contribute
specifically to the development of the Net-Zero
Standard.
SBTi Scientific Advisory Group (SAG)

Definition Comments

recognized experts in climate change mitigation,
integrated assessment modelling, energy system
and land-use dynamics, and other topics that
contribute to developing the SBTi’s scientific
foundations.


SBTi Technical Advisory Group (TAG)

Definition Comments

practitioners and experts in topics such as
corporate sustainability, greenhouse gas
accounting, and target-setting that provide invited
feedback on SBTi methods, criteria changes, and
guidance.
Scope 1 emissions
Definition Comments
Defined by the GHG Protocol accounting Also see

standard as “A reporting organization’s direct ● GHG emissions
GHG emissions”
Scope 2 emissions
Definition Comments

standard as “A reporting organization’s (indirect) ● GHG emissions
emissions associated with the generation of
electricity, heating/ cooling, or steam purchased
for own consumption”
Scope 3 emissions
Definition Comments

standard as “A reporting organization’s indirect ● GHG emissions
emissions other than those covered in scope 2” ● Scope 2 inventory
The Paris Agreement

Definition Comments
Stated by the UNFCCC, the Paris agreement is a Also see:

“legally binding international treaty on climate ● Pre-industrial levels
change. It was adopted by 196 Parties at COP 21
in Paris, on 12 December 2015 and entered into
force on 4 November 2016.
Its goal is to limit global warming to well below 2,
preferably to 1.5 degrees Celsius, compared to
pre-industrial levels”
Physical emissions intensity

Definition Comments
A metric describing the emissions per physical Also see:

unit of an activity (e.g., cement production). The ● Decarbonization
intensity convergence method is based on the ● Pre-industrial levels
principle that all companies in a sector will ● Paris Agreement


converge to the same physical emissions

intensity in a future year of mitigation pathways.
United Nations Climate Change Conference (2021: COP26)

Definition Comments
The annual Conference of the Parties brings Also see:

together the 197 countries (Conference of the ● Paris Agreement
Parties, COP) that have ratified the United
Nations Framework Convention on Climate
Change (UNFCCC). As the twenty-sixth such
gathering, it is known as COP26 and will take
place in Glasgow in November 2021.
The United Nations Environment Programme

(UNEP) states that “Under the Convention,
nations have reached two key agreements on
reducing greenhouse gas emissions: the Kyoto
Protocol adopted in 1997, and the Paris
Agreement adopted in 2015. The Paris accord is
built around so-called “nationally determined
contributions” as a means of achieving the goal
of limiting the global temperature increase, and to
step up those contributions over time”.”
Value-chain emissions
Definition Comments
A company’s scope 1, 2, and 3 emissions as Also see:

defined by the GHG Protocol accounting ● Scope 1 inventory
standard ● Scope 2 inventory
● Scope 3 inventory


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The SBTi Net-Zero Corporate

The SBTi Net-Zero Corporate Manual Version 1.1 | July 2021

sciencebasedtargets.org @ScienceTargets /science-based-targets info@sciencebasedtargets.org

Version Release date Purpose Updates on earlier version

The SBTi Net-Zero Corporate Manual Version 1.1 | July 2021

sciencebasedtargets.org @ScienceTargets /science-based-targets info@sciencebasedtargets.org

SBTi Net-Zero Corporate Manual Version 1.1 | July 2021

sciencebasedtargets.org @ScienceTargets /science-based-targets info@sciencebasedtargets.org

SBTi Net-Zero Corporate Manual Version 1.1 | July 2021

sciencebasedtargets.org @ScienceTargets /science-based-targets info@sciencebasedtargets.org

This guidance document provides information to companies participating in the Net-Zero

1.2 What are science-based targets?

sciencebasedtargets.org @ScienceTargets /science-based-targets info@sciencebasedtargets.org

1.3 The Net-Zero Standard development process

sciencebasedtargets.org @ScienceTargets /science-based-targets info@sciencebasedtargets.org

Figure 1. Net-Zero Standard project timeline

1.4 What does the Net-Zero Road Test entail?

sciencebasedtargets.org @ScienceTargets /science-based-targets info@sciencebasedtargets.org

Figure 2. SBTi perspective on prioritisation of mitigation actions.

sciencebasedtargets.org @ScienceTargets /science-based-targets info@sciencebasedtargets.org

sciencebasedtargets.org @ScienceTargets /science-based-targets info@sciencebasedtargets.org

Part 2: Terminology and updates to current SBTi criteria

Figure 3. Near-term SBTs vs. long-term SBTs

2.1.1 Near-term science-based targets

• What: Previously known as “science-based targets” (or “interim science-based targets

2.1.2 Long-term science-based targets

• What: Previously known as deep decarbonisation targets, these targets show

sciencebasedtargets.org @ScienceTargets /science-based-targets info@sciencebasedtargets.org

2.2 Changes to near-term SBT criteria

Table 1. Summary of changes to near-term SBT criteria

Criterion Planned changes

The minimum scope 3 ambition of near-term SBTs will be increased from

sciencebasedtargets.org @ScienceTargets /science-based-targets info@sciencebasedtargets.org

Part 3: Mitigation pathways in the Net-Zero Standard

sciencebasedtargets.org @ScienceTargets /science-based-targets info@sciencebasedtargets.org

3.1.1 Available pathways and which companies should use them

There are two main SBT pathways (see Figure 5)6:

See Table 2 for further details on this topic.

sciencebasedtargets.org @ScienceTargets /science-based-targets info@sciencebasedtargets.org

3.2 Preliminary pathway data for long-term SBTs

sciencebasedtargets.org @ScienceTargets /science-based-targets info@sciencebasedtargets.org

Intensity tCO2/thousand 0.125 0.076 0.013 39% 89% Airlines, airplane

Cement Absolute Mt CO2 2461 1899 133 23% 95% Building

Intensity tCO2/t cement 0.584 0.446 0.033 24% 94% Cement

Marine Absolute Mt CO2 883 705 122 20% 86% Retail

Intensity tCO2/thousand 0.008 0.005 0.000 45% 95% Shipping service

Passenger Absolute Mt CO2 3121 1626 85 48% 97% Car users

sciencebasedtargets.org @ScienceTargets /science-based-targets info@sciencebasedtargets.org

Service Absolute Mt CO2 977 432 14 56% 99% Building users

Trucks Absolute Mt CO2 1835 1614 198 12% 89% Retail

Intensity tCO2/thousand 0.069 0.042 0.003 38% 95% Shipping service

Aluminium Preliminary data not yet available

Other Preliminary data not yet available

Beef Absolute MtCO2 1297 1299 1200 0% 7% Restaurants,

Intensity tCO2/t fresh 32.41 27.94 21.57 14% 33% Commodity

Chicken Absolute MtCO2 168 150 129 11% 23% Restaurants,

sciencebasedtargets.org @ScienceTargets /science-based-targets info@sciencebasedtargets.org

Intensity tCO2/t fresh 1.82 1.41 1.06 23% 42% Commodity