What is the Corporate Net-Zero Standard?

The Corporate Net-Zero Standard is the international standard developed by the Science Based Targets initiative (SBTi) that defines the requirements under which a company can make a credible Net-Zero commitment. Its purpose is to provide a consistent framework for setting long-term decarbonisation targets while preventing unfounded or misleading climate claims.

The Corporate Net-Zero Standard is currently the most widely recognised international methodology for defining and validating corporate Net-Zero targets.

What does Net Zero mean under the Standard?

Under the Standard, Net Zero does not mean eliminating all emissions entirely. Instead, companies are expected to reduce greenhouse gas emissions from their operations and value chain as much as possible, while only the technically or economically unavoidable residual emissions may be neutralised through durable carbon removal solutions.

The Standard places the emphasis on actual emissions reductions, rather than on the widespread use of carbon offsets.

Why is the Corporate Net-Zero Standard important?

In recent years, an increasing number of companies have announced Net-Zero commitments. However, these commitments have varied significantly in terms of ambition and credibility. The Corporate Net-Zero Standard addresses this challenge by establishing a common benchmark.

The Standard:

• provides a consistent framework for setting Net-Zero targets;
• applies science-based requirements;
• makes corporate commitments transparent and comparable;
• reduces the risk of greenwashing;
• strengthens confidence among investors, lenders and business partners.

What requirements does the Standard establish?

According to the Corporate Net-Zero Standard, companies must:

• assess their total greenhouse gas emissions, including Scope 1, Scope 2 and, where applicable, Scope 3 emissions;
• establish both near-term and long-term emissions reduction targets;
• achieve substantial actual emissions reductions before relying on any form of compensation;
• regularly monitor and publicly report on their progress.

The Standard requires Net-Zero targets to be aligned with the global 1.5°C climate goal.

How does it differ from carbon offsetting?

One of the key principles of the Corporate Net-Zero Standard is that carbon offsetting cannot replace emissions reductions.

Companies are expected to reduce their own emissions to the greatest extent possible before addressing unavoidable residual emissions through durable carbon removal solutions.

This represents a significant shift from earlier approaches, where organisations often relied primarily on purchasing carbon credits to fulfil their climate commitments.

Who is the Standard relevant for?

The Corporate Net-Zero Standard is particularly relevant for companies that:

• intend to make a Net-Zero commitment;
• wish to develop SBTi-validated climate targets;
• are developing an ESG or sustainability strategy;
• seek to meet investor or lender expectations;
• operate within international supply chains.

Although voluntary, the Standard is increasingly regarded as a market expectation by large corporations and financial institutions.

How does it relate to ESG?

The Corporate Net-Zero Standard is one of the leading international frameworks supporting the Environmental (E) pillar of ESG.

Its application contributes to:

• developing a credible decarbonisation strategy;
• managing climate-related risks;
• strengthening the credibility of ESG reporting;
• improving the measurability of sustainability objectives;
• building trust among investors and business partners.

Frequently Asked Questions

Is the Corporate Net-Zero Standard mandatory?

No. The Standard is a voluntary international framework, but it forms the basis of credible Net-Zero commitments under the SBTi and is increasingly regarded as market best practice.

Can a company set a Net-Zero target without applying the Standard?

Yes. However, the Corporate Net-Zero Standard ensures that corporate targets are science-based, transparent and internationally comparable. Without it, demonstrating the credibility of a commitment may be more difficult.

Does the Standard allow the use of carbon credits?

Only to a limited extent. The Standard requires actual emissions reductions to take priority, while only unavoidable residual emissions may be addressed through durable carbon removal solutions.

Back to the glossary