For corporate net-zero targets, focus on the big picture

The science is clear. Keeping global warming “well below 2°C” requires bringing human-caused greenhouse gas emissions to net zero by mid-century: minimizing emissions from all sources, and balancing out what remains through carbon dioxide “removals”. Net zero has quickly become the dominant paradigm for climate ambition. More and more countries are setting net-zero targets, and an impressive number of voluntary actors are joining the fray.

To keep this momentum rolling, the Science-Based Targets initiative (SBTi) recently launched a new Net-Zero Standard for corporate actors, providing guidance and tools for companies to set science-based net-zero targets consistent with global climate goals. As a member of the SBTi’s expert advisory group, I am happy to say the standard is rigorous, comprehensive and sets a very high bar.

But there is one way in which it implicitly misses the mark: the idea that individual actors should emphasize “achieving” net zero for themselves, rather than focus on how best to contribute to global net zero. This presumption makes it easy to ignore critical questions about how efforts should be differentiated among countries and sectors, and is already leading to unintended consequences.

An unhelpful focus on removals

SBTi’s new standard properly emphasizes the need for all actors to reduce their own emissions as far as possible, and minimize the need to “net” them out. Yet when it comes to netting, the presumption is that companies should “neutralize” their emissions with removals, imitating at a corporate level what must happen globally. This notion is already having a perverse effect on where companies spend their mitigation dollars. According to one study, just a handful of companies have pledged more removals than the entire world can provide – an outcome that could pose dire climate risks and undermine sustainable development goals.

At a global level, carbon dioxide removals will certainly be needed to limit warming. Having corporate actors purchase them in bulk to achieve their own mini versions of net zero, however, misses the forest for the trees. The world desperately needs to reduce emissions. To move the world towards net zero, companies would do better in the near term to both reduce their own emissions and help others do the same.

Eliding equity

The focus on “achieving” individual net zero also makes it easy to ignore equity principles. Under the Paris Agreement, for example, all countries are expected to contribute to achieving net zero globally, but wealthy countries are expected both to move faster and to provide mitigation (and adaptation) finance to developing countries.

Among corporate actors with net zero targets, some have given a nod to moving faster by pledging to reach net zero well before 2050. Many fewer, however, are committing to finance, at scale, the mitigation efforts of those who can least afford them.

The new SBTi standard addresses this by encouraging companies to “go beyond the value chain” and contribute funding to global mitigation efforts. What is missing is the rationale. In an equitable approach to global net zero, there are strong arguments why many actors should contribute well beyond what it would take to bring their own emissions to net zero. The focus on “achieving” net zero distracts from this, creating the perception that companies that adopt such targets are already doing their best, while suggestions that they do more are labeled as what should “ideally” happen, or an “honorable approach.”

From corporate to global net zero

At least one (underappreciated) initiative has found a better answer. Under Carbone 4’s framework, “a company is not carbon neutral: it contributes to neutrality.” In other words, the point of setting net-zero targets is not for each company to achieve net zero, but to contribute what it can to global net zero.

Building on that idea, here are three principles that could inform more equitable and ambitious corporate net-zero targets:

• Focus on the big picture: The idea of achieving net zero emissions at a corporate level is self-centered. The narrative needs to change from “we are no longer part of the problem” (because our emissions are net zero) to “we are part of a global solution to climate change.” In part, this means not rotely mirroring global net zero, but instead taking actions that will beneficially advance it – including favoring emission reductions over carbon removals when financing external mitigation.
• Put equity front and center: From a scientific perspective, there is no reason why the “correct” level of emissions for any given actor should be net zero. What is fair and feasible for each entity could be net positive, zero, or negative emissions. Companies (and others actors) should focus on making equitable contributions to global goals, including through near-term support of emission reductions outside their value chains.
• Connect with larger policy efforts: No company can act on its own to solve the climate crisis. We urgently need to focus attention on collective action. Companies that are truly committed to achieving net zero need to support climate policies – at all levels of government and internationally – that advance an equitable, comprehensive and coordinated global transition.

The climate crisis is now more urgent than ever, and the growing willingness of public and private institutions to voluntarily step up to address it should be enthusiastically welcomed. To maximize the value of their efforts, we need to put “net zero” in its proper focus: a global goal to which all collectively contribute.