Net Zero Strategy: Achieving Carbon Neutrality & Science-Based Targets

Net Zero has evolved from an aspirational goal to a business imperative. With investors increasingly factoring climate risk into decisions and regulations tightening globally, understanding how to achieve genuine carbon neutrality is essential for long-term business success.

Net Zero vs. Carbon Neutral: Key Differences

Carbon Neutral

Balancing carbon emissions with carbon offsets or removal.

✓ Can rely heavily on offsetting
✓ May not require deep operational changes
✓ Faster to achieve initially
✓ Less stringent requirements

Net Zero

Reducing emissions to near-zero before using removals for residuals.

✓ Requires 90-95% emissions reduction
✓ Demands fundamental business transformation
✓ Long-term commitment (typically 2050)
✓ Science-Based Targets required

The SBTi Corporate Net-Zero Standard

The Science Based Targets initiative (SBTi) released its updated Corporate Net-Zero Standard (V1.3) in September 2025, setting the gold standard for corporate climate action.

Key Requirements

Near-Term Targets: Reduce emissions by at least 50% by 2030 (from baseline year)
Long-Term Targets: Achieve 90-95% emissions reduction by 2050
Scope Coverage: Must include Scope 1, 2, and 3 emissions
Residual Emissions: Only 5-10% of emissions can remain, neutralized through carbon removals

Strategic Implementation Framework

1 Establish Baseline

Conduct comprehensive carbon footprint assessment covering Scope 1, 2, and 3 emissions. Choose appropriate baseline year (typically recent year with reliable data).

2 Set Science-Based Targets

Align targets with SBTi methodology. Commit to halving emissions by 2030 and achieving Net Zero by 2050. Get targets validated by SBTi for credibility.

3 Create Decarbonization Roadmap

Identify specific actions for each emission category. Prioritize high-impact, cost-effective interventions. Include energy efficiency, renewable energy, electrification, and supply chain engagement initiatives.

4 Implement and Track Progress

Execute decarbonization initiatives systematically. Establish robust monitoring and reporting systems. Review progress quarterly and adjust strategies as needed.

5 Engage Value Chain

Work with suppliers to reduce Scope 3 emissions. Implement supply chain sustainability programs. Support customer adoption of low-carbon alternatives. Share best practices and lessons learned.

6 Neutralize Residual Emissions

After achieving 90-95% reduction, use high-quality carbon removals (not offsets) for remaining emissions. Prioritize permanent removal solutions like direct air capture or enhanced weathering.

Key Decarbonization Levers

🔌 Energy Efficiency

Upgrade equipment, optimize processes, improve building insulation

☀️ Renewable Energy

On-site generation, PPAs, renewable energy certificates

⚡ Electrification

Electric vehicles, heat pumps, electrified industrial processes

🔄 Circular Economy

Material efficiency, waste reduction, product longevity

🚚 Supply Chain

Supplier engagement, sustainable sourcing, logistics optimization

💡 Innovation

New materials, alternative fuels like green hydrogen, breakthrough technologies

Business Benefits

Cost Savings: Energy efficiency and resource optimization reduce operational costs
Risk Mitigation: Protection against carbon pricing, regulations, and physical climate risks
Competitive Advantage: Differentiation in sustainability-conscious markets
Investor Appeal: 80% of investors now factor climate risk into decisions
Talent Attraction: Employees increasingly seek purpose-driven employers
Innovation Driver: Forces business model innovation and efficiency gains

Avoid These Common Pitfalls

❌ Relying primarily on offsets without deep decarbonization
❌ Setting targets without clear implementation plans
❌ Ignoring Scope 3 emissions (often 70-90% of footprint)
❌ Failing to engage suppliers and value chain partners
❌ Making greenwashing claims without substantiation
❌ Underestimating resources and timeline required

Achieving Net Zero: Strategic Pathways to Carbon Neutrality