SBTi Publishes Glossary to Standardise Corporate Net-Zero Language

The Science Based Targets initiative published a comprehensive jargon guide in October 2024 to clarify common but inconsistently used terms in the corporate net-zero space, including abatement, beyond value chain mitigation, carbon neutrality and neutralisation. Over 1,200 companies had validated net-zero targets under the SBTi Corporate Net-Zero Standard as of October 2024, with another 2,400 committed to set them.

The guide distinguishes between frequently conflated concepts, notably carbon neutral and net-zero. Carbon neutral typically allows for offset purchases to counterbalance emissions without requiring direct reductions, while the SBTi's net-zero definition requires companies to reduce scope 1, 2 and 3 emissions by at least 90 percent before 2050 and neutralise any residual emissions through permanent carbon removal. The SBTi does not validate carbon neutrality claims and does not permit offsetting, as it does not align with the reductions needed to limit warming to 1.5 degrees Celsius.

The guide also defines beyond value chain mitigation, or BVCM, as climate action outside a company's value chain that is recommended in addition to deep emission cuts, not as a substitute for them. Examples include purchasing high-quality carbon credits to finance external mitigation and providing direct finance to climate projects. The SBTi's mitigation hierarchy, which underpins the Corporate Net-Zero Standard, prioritises avoiding emissions, then reducing them, then taking responsibility for residual emissions through BVCM, with neutralisation of remaining emissions required at the net-zero target year.

The glossary clarifies scope 3 emissions, defined as indirect emissions across the full upstream and downstream value chain, and distinguishes value chain from supply chain, the latter referring only to upstream activities. A near-term target year must fall between 5 and 10 years from submission; a long-term target must be 2050 or earlier. The guide notes that current policies place the world on track for 2.9 degrees Celsius of warming this century, compared with the 1.5 degree threshold, reinforcing the urgency of consistent language and credible target setting. The IPCC defines net-zero as achieved when human-caused GHG emissions are balanced by removals over a specified period.

Key figure — 93% of the global economy by GDP (PPP) committed to reaching net-zero