SBTi Net Zero Definition “Unattainable” for SMEs

A new whitepaper by sustainability firm Eight Versa has shed light on the limitations of the Science Based Targets initiative (SBTi) in achieving net zero emissions for SMEs. The study highlights that the current definition of net zero, as outlined by SBTi, essentially excludes approximately 99% of businesses, hindering their ability to set achievable science-based emissions reduction targets. SBTi, a collaborative effort by CDP, UN Global Compact, World Resources Institute, and WWF, has gained widespread adoption among large organisations worldwide and is seen as the primary reference point for corporate global efforts to limit global warming to 1.5°C. The crux of the issue, according to the study, lies in the SBTi’s ‘Absolute Contraction’ method, which demands companies to reduce their absolute emissions by at least 90% by 2050, while allowing them to offset their remaining emissions. While larger corporations are granted flexibility to reduce Scope 3 emissions based on intensity metrics, SMEs are obligated to opt for the less flexible option of absolute contraction on all scopes. The whitepaper points out that the current net zero methodology could stifle innovation and hinder growth for SMEs. Tesla was used as an example, illustrating that the company cannot increase its vehicle production significantly while simultaneously reducing its greenhouse gas (GHG) emissions, rendering it ineligible to be an SBTi aligned company. Chris Hocknell, Director  of Eight Versa, said: “If you’re making a commitment to the SBTi framework, with no genuine plan for achieving it, or a proper understanding of what it means, then how is that different from greenwashing? We would call that ‘greenwishing’, and greenwishing won’t help anyone.” 

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