Climate Solutions Framework Offers Intensity-Based Targets for Oatly and Similar Companies

A guest analysis by Schneider Electric's EcoAct unit argues that traditional absolute net-zero frameworks can penalise companies whose products enable significant decarbonisation across the broader economy, and describes the application of the Climate Solutions Framework to Oatly as a more appropriate alternative. The framework, developed by the Exponential Roadmap Initiative and Oxford Net-Zero, allows qualifying companies to use intensity-based rather than absolute emissions targets.

To qualify as a climate solutions company under the framework, a business must derive over 90% of revenues from products that deliver at least 50% lower carbon impact than the market-weighted average of alternatives they replace, and must have public interim and net-zero targets covering all emissions, an active climate transition plan and annual disclosure. For Oatly, whose oat-based dairy alternatives carry substantially lower carbon footprints than conventional dairy, the Climate Solutions Framework allows intensity-based targets that accommodate growth while ensuring the company maintains a significantly lower footprint than the market average. The global food system accounts for approximately one-third of global greenhouse gas emissions.

The intensity-based pathway developed for Oatly targets a 40% reduction in emissions per litre from a 2020 baseline by 2030, a 70% reduction by 2040 and an 89% reduction by 2050, while maintaining at least a 60%, 75% and 90% lower climate impact than the dairy market average at each respective milestone. The analysis notes that conventional dairy is projected to reduce its emissions by only 22% to 39% by 2050 under SBTi pathways, meaning Oatly's products will maintain and widen their advantage over time. The framework explicitly acknowledges that growth in climate solutions may increase total operational emissions in the near term while delivering larger system-wide reductions.

The Climate Solutions Framework has implications for how sustainability reporting standards and science-based target methodologies treat companies in sectors where products intrinsically enable decarbonisation, including clean energy, plant-based foods and sustainable materials. For India, which hosts a large and growing plant-based food sector alongside significant sustainable agriculture and clean energy industries, the framework could provide an appropriate methodology for companies that face growing pressure to set science-aligned climate targets while scaling production of genuinely low-carbon goods. The key challenge remains ensuring that intensity-based frameworks are applied only to companies with rigorously verified climate solution credentials.

Key figure — 89% reduction in emissions per litre target for Oatly by 2050 versus 2020 baseline