Last reviewed 27 April 2022
The Carbon Trust’s new Route to Net Zero standard offers guidance to businesses of all kinds, in all geographical locations as they embark on the journey to net zero. Smaller businesses which may have been daunted by the rigorous demands of science-based targets may find this a gentler path which will grant recognition of their first steps towards emissions reduction.
Net zero — what and why?
According to the Intergovernmental Panel on Climate Change (IPCC), the increase in global temperature is likely to exceed 1.5°C by 2030. If we exceed this permanently the world could warm by 2.7–3.5 degrees by 2100, with disastrous consequences for humanity and nature. To quote the UK Government’s net zero strategy: “The science could not be clearer: by the middle of this century the world has to reduce emissions [of greenhouse gases] to as close to zero as possible, with the small amount of remaining emissions absorbed through natural carbon sinks like forests and new technologies like carbon capture. If we can achieve this, global emissions of greenhouse gases will be ‘net zero’.”
The Government’s strategy aims to achieve net zero at the national level through policies in the areas of energy, transport, built environment and finance. Businesses can also make a major contribution worldwide, through their own net zero strategies.
The Route to Net Zero Standard
The standard was launched on 21 February 2022, replacing the Carbon Trust’s standards for energy, water and supply chain management. (The standard for zero waste to landfill remains.) The Carbon Trust is a consultancy which has been pioneering decarbonisation for more than 20 years and in its own words "puts impact before profit”. Its network of 300 experts worldwide will help organisations to:
measure and manage their emissions
inform carbon reduction strategies
align targets for the future, eventually adopting science-based targets.
Ten companies have already signed up to the standard, including Virgin Media, O2, PwC, Sainsbury’s, Severn Trent Water, Siemens AG and gas distribution company SGN.
Businesses which sign up for the standard will receive help in answering key questions.
How will we set the right targets?
Do we have the right financial and operational setup to achieve these targets?
How will we know when we are making progress and if we are on track?
How can we communicate progress inside and outside of our organisation?
How will we inspire people to trust that we will deliver on our climate ambition?
The service will be delivered through a new digital platform which will evolve to support companies with carbon footprinting, target setting and value chain analysis.
Three tiers of certification
The standard’s progressive three-tier approach recognises a company’s efforts wherever they are on their journey. The three certificates are as follows.
1. Taking action.
Historical reductions in operational emissions.
Greenhouse gas emissions reduction target.
Foundational CO2e management practices.
Science-aligned reductions in emissions.
Science-aligned reduction target.
Advancing CO2e management practices.
1.5°C aligned reductions in emissions.
Net Zero target.
Leading CO2e management practices.
Businesses can only be certified against the lower tier for two periods. On the third they must move to the next tier thus progressing towards science-based targets.
Comparison with the SBTi Net Zero Standard
The launch of the Carbon Trust’s new standard came four months after the Science Based Targets Initiative (SBTi) launched its Net Zero Standard, the world’s first framework for corporate target setting in line with climate science. This is comparable to the “leading” tier of the Carbon Trust standard. More recently, the SBTi has published a standard specifically for the financial sector.
Targets are considered "science-based” if they are in line with what the latest climate science deems necessary to meet the goals of the Paris Agreement — limiting global warming to well below 2°C above pre-industrial levels and pursuing efforts to limit warming to 1.5°C. The SBTi Net Zero Standard provides the guidance, criteria and recommendations companies need to set targets consistent with limiting global temperature rise to 1.5°C. Older targets aligned to 2°C will cease to be valid from 2025.
To date almost 1400 companies have expressed an intent to set targets aligned to 1.5°C through the SBTi. These tend to be larger organisations, however at present only a small proportion of total corporate emissions is covered by science-based targets. A representative of BT, one of the first companies to have their target verified by the SBTi, commented that “companies are doing great things but we need so many more thousands of companies — large and small — to set these targets”. Hopefully the Carbon Trust standard will contribute to this aspiration. Small businesses generate around 50% of total carbon emissions.
Tightening up the definition of net zero
While only a limited number of businesses have signed up to rigorous science-based targets, a great many have set themselves “net zero” goals. In fact more than 90% of global GDP is covered by net zero targets. The term “net zero” does not have a precise definition, meaning that there is inconsistency in the categories of emissions reported by each business and a variety of dates by which they intend to reach net zero.
Critics have commented that many businesses rely too heavily on carbon offsetting to achieve their net zero goal. There is also concern that many businesses are not taking full account of their Scope 3 (indirect) emissions which are much more difficult to quantify.
What is the difference between net zero and science-based targets?
Many businesses are confused by the various terms relating to climate change goals. A recent survey by the British Business Bank indicated that 78% of smaller businesses misunderstood decarbonisation and 74% misunderstood net zero.
There is considerable overlap between net zero and science-based targets. In a nutshell, a science-based target does not allow offsetting. One consultancy sums it up by saying that if a net zero target requires the business to reach zero carbon around mid-century without the use of carbon offsets, it is a science-based target.
While science-based targets and net zero goals remain voluntary initiatives, businesses are now facing more pressure from Government to disclose climate-related data. On 6 April 2022 the Government introduced the TCFD Mandate (Taskforce on Climate-related Financial Disclosures), which will apply to around 1300 large organisations, including listed companies, banks and insurers with more than 500 employees. This will allow investors who are concerned about climate change to make more informed decisions.