Net zero targets are now expected from companies in every sector. Here is an official 7-step guide developed by the University of Oxford.
The following are clear steps to follow in setting net zero commitments developed by the University of Oxford based on minimum criteria for the UNFCCC-backed Race to Zero Campaign and an extensive series of stakeholder workshops.
By taking these steps organisations can join the global effort to meet the Paris Agreement goals. The criteria were created by the networks and initiatives that form the Race to Zero’s international climate action community.
Pledge and commit
Pledge at the head-of-organisation level to reach net zero GHGs as soon as possible, and by mid-century at the latest, in line with global efforts to limit warming to 1.5C. Recognise that this requires phasing out all unabated fossil fuels as part of the transition.
Set an interim target to achieve in the next decade, which reflects maximum effort toward or beyond a fair share of the 50 per cent global reduction in CO2 by 2030.
Targets must cover all GHGs, including Scopes 1, 2, and 3 for businesses and other organisations, all territorial emissions for cities and regions, all portfolio/financed/facilitated/insured emissions for financial entities and all land-based emissions.
Net global emissions of carbon dioxide must reach zero to stabilise global temperatures, whether at +2°C, +3°C or any other level. All industries must eventually reach net-zero emissions, even if some industries do so before others.
Companies should commit to a date (or a temperature increase, such as 1.5°C or “well below 2°C”) before which the net CO2 emissions associated with their activities (including both supply chains and products sold) will be zero.
Companies should develop and publish a net zero transition plan. If the company envisages a substantial role for offsetting of residual emissions, what is the offset mechanism? Is it reliable and available at sufficient scale for a global transition, and who is going to pay for it? The company’s public statements and support for other organisations and lobby groups should be consistent with advancing public, political and corporate action towards net zero emissions.
Within 12 months of joining, publicly disclose a Transition Plan, City/Region Plan, or equivalent which outlines how all other Race to Zero criteria will be met. Include what actions will be taken within the next 12 months, within 2-3 years, and by 2030.
Use quantative medium-term targets
Mid-term targets (for example, for 2030) that are directly relevant to achieving a net-zero business model, such as the rate and long-term trajectory of reductions in CO2 emissions, are vital to assess compatibility with the Paris Agreement. If a company has a plan for a progressive transition to net-zero emissions, investors should be able to monitor their progress to ensure it is consistent with minimising risks to future climate and risks to future asset owners, consumers and taxpayers.
Global temperatures are projected by the IPCC’s Fifth Assessment Report to reach around 1.2°C above pre-industrial by about 2030. By this level of warming, emissions scenarios approximately consistent with the 1.5°C goal will have seen global CO2 emissions reduce by at least 40 per cent relative to business as usual, or at least 20 per cent below business as usual for the 2°C goal. These rates of emissions reductions can act as useful benchmarks against which company progress can be measured.
Take immediate action through all available pathways toward achieving net zero, consistent with delivering interim targets specified. Where relevant, contribute to sectoral breakthroughs.
Report publicly both progress against interim and long-term targets, as well as the actions being taken, at least annually. Report in a standardised, open format, and via platforms that feed into the UNFCCC Global Climate Action Portal.
Within 12 months of joining, align external policy and engagement, including membership in associations, to the goal of halving emissions by 2030 and reaching global net zero by 2050.
Develop a profitable net zero business model
Company executives should have business plans that ensure the profitability of their business, and limit supply chain risks, once emissions reach net zero. For companies that provide a carbon-intensive service or fuel for which there is no currently available substitute, a clear plan is required for contributing to the development and deployment of substitutes or remediation measures.
For products and services for which zero-carbon substitutes already exist, a company should have a clear strategy and timescale for adopting them. If carbon dioxide removal plays a substantial role in the company’s plans, how will it be achieved, paid for, monitored and maintained in perpetuity?