What is a Net Zero target? | Navigating Emissions Targets for SMEs

In the global effort against climate change, small and medium-sized enterprises (SMEs) play a pivotal role. While large corporations often take centre stage in discussions about emissions reduction, SMEs collectively constitute a significant portion of global emissions. As a result, setting meaningful emissions targets is essential for these businesses to contribute to a sustainable future.

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What is a Net Zero Target?

A net zero target refers to the commitment of an organisation to eliminate the majority of its emissions and compensate for the remaining, unpreventable emissions using offsets or carbon credits (typically used interchangeably). 

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Once a company has reduced their emissions and purchased a sufficient amount of carbon credits to offset the remaining amount, they will achieve net zero emissions – the amount of greenhouse gases they are taking out of the atmosphere cancels out those they are producing. Being net zero doesn’t mean all emissions are being prevented, but the focus should be on getting as close to ‘gross zero’ emissions as possible. High-quality carbon offsets are then used for any unavoidable emissions.

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SBTi Targets - Science-Based Targets

Science-Based Targets, or SBTi targets, are a specific subset of emissions targets that are backed by rigorous scientific analysis. These targets are considered highly credible and are in line with the latest climate science. To establish an SBTi target, SMEs must follow a precise methodology outlined by the Science-Based Targets initiative (SBTi). These targets involve reducing emissions in line with keeping global warming well below 2°C above pre-industrial levels. SBTi targets are becoming increasingly popular among organisations of all sizes due to their robust methodology and alignment with global climate goals.

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Do I Need to Have an SBTi Aligned Target?

While SBTi targets are an excellent choice for organisations that want to demonstrate their commitment to addressing climate change rigorously, they may not be suitable for every SME. The decision to adopt an SBTi-aligned target should be based on your specific circumstances, including your industry, size, and available resources. SMEs may consider the following factors:

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• Resources: Developing an SBTi-aligned target may require dedicated staff and resources for data collection, analysis, and reporting. Assess whether your SME can allocate these resources effectively.

• Industry Standards: Some industries may have established emissions reduction targets and guidelines that align with SBTi principles. It’s always a good idea to research your industry's standards and consult with relevant trade associations.

• Long-Term Commitment: SBTi targets often require long-term commitment and investment. It’s important to evaluate your SME's willingness and ability to sustain emissions reductions over time.

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Other Types of Targets

Apart from SBTi-aligned targets, SMEs can consider various other emissions targets, including:

• Absolute Emissions Reduction: This approach focuses on reducing a fixed amount of emissions, regardless of growth or changes in business operations.

• Intensity-Based Targets: These targets aim to reduce emissions per unit of production or revenue, allowing SMEs to align emissions reduction efforts with business growth.

• Carbon Neutrality: Ideally once a robust emissions reduction plan is in flight, SMEs can achieve carbon neutrality by offsetting residual emissions through investment in credible, high quality carbon offsetting projects.

• Sector-Specific Targets: Some industries have unique challenges and emissions profiles. SMEs may also choose to adopt targets specific to their sector.

For some more info on emissions targets and SBTi, feel free to check out our target setting blog post, and please reach out if you’re keen to see how Trace may be able to help your business set an appropriate target. Get in contact with our team to find out more.