Response to the SBTi's Corporate Net-Zero Standard Version 2.0 — Second Public Consultation Draft

The Nature+ Coalition welcomes SBTi's updated draft of the Corporate Net-Zero Standard and many of its core orientations (linking short-term and long-term actions, recognition mechanism for early movers which have already set voluntary actions on ongoing emissions, corporate transparency) that aim to raise the ambition of corporate climate trajectories and better recognise efforts undertaken by companies, while at the same time keeping the standard science-driven, actionable and operational for economic stakeholders.

The Nature+ Coalition has however identified four areas for improvement and formulates the following recommendations.

1. Advancing the timeline of compensation of residual emissions for type-A companies, and including mandatory interim targets in the transition plan requirements

The Nature+ Coalition welcomes the proposal to introduce a recognition mechanism for companies already committed to voluntary actions on ongoing emissions from either purchasing carbon credits or through "supplementary climate contributions". We however question the timeline to make it mandatory (2035 for type-A companies) and suggest to advance it to 2030, considering that carbon removal projects take time to be identified and developed, especially the ones with the highest standards of quality.

Moreover, a 2030 target would help companies to have a more progressive trajectory towards net-zero by 2050, and thus incentivise more credible trajectories compatible with the Paris Agreement. This position is shared by many companies and business alliances, such as the World Business Council for Sustainable Development. We also recommend including mandatory interim targets (2035, 2040, etc.) in the upcoming transition plans.

2. Recognising nature-based removals as potential "long-lived storage" solutions

The coalition takes note that the draft recognises the need, as per the post-2035 requirements, to have both engineered ("long-lived carbon storage") and nature-based removals coexisting, the latter being marked as "shorter-lived" ones. The coalition suggests that nature-based removals are recognised as long-lived ones when the risk of reversal is mitigated, in order to put the two types of removals on an equal footing, considering that:

• SBTi acknowledges that both types of removals are already needed and will still be for 2050 and beyond, however SBTi's current wording creates a de facto hierarchy between them;
• It was demonstrated that engineered removals can also release carbon in the case of disturbances, a risk that is recognised by SBTi ("actual permanence may be affected by human or natural disturbances. This applies even to storage types with high durability potential"), and reversely that nature-based removals can store carbon for centuries when appropriate permanence safeguards are implemented (buffer pools, insurance mechanisms).

Moreover, the Nature+ Coalition wants to highlight that nature-based removals are available today and more financially accessible for all stakeholders: small and medium companies with smaller budgets can more readily finance them. The standard should therefore endorse NbS more strongly.

3. Accounting carbon credits only when they align with ICVCM's Core Carbon Principles

The coalition welcomes that SBTi's draft standard recognises the central role of carbon credits — including those generated by NbS — in the path to net-zero. However, as of today, many companies remain hesitant to engage in carbon markets due to concerns about integrity and greenwashing.

In order to boost confidence and corporate climate action, SBTi should send a strong signal and set minimum quality requirements for the credits in order to ensure their integrity. The coalition suggests to put ICVCM's Core Carbon Principles as minimal requirements to guarantee the environmental impact of the credits accounted.

4. Delinking carbon credits accounted in an NDC and also used in a company's path to net-zero, a situation that the draft misleadingly deems as double counting

Paragraph C29.6 stipulates that "removals used for neutralization shall not be simultaneously claimed by another entity for compliance or NDC accounting purposes. Where removals are authorized for use under Article 6 of the Paris Agreement, a corresponding adjustment by the host country shall be demonstrated. In the absence of such adjustment, the activity may only be reported as a contribution under the Ongoing Emissions Responsibility recognition framework, not as neutralization".

The Nature+ Coalition maintains that carbon credits accounted in an NDC while they are used in a company's trajectory to net-zero at the same time should not be considered as double counting, and that double claiming (contribution to an NDC and corporate neutralisation) is legitimate as voluntary corporate action and national climate targets already coexist and reinforce one another. Indeed, all emission reductions from private stakeholders are co-claimed, as a company reducing its footprint contributes to both its corporate target and its host country's national inventory. The same principle should be followed for carbon removal activities.

Moreover, the coalition points out that:

• Art. 6 of the Paris Agreement considers that double counting only occurs when two countries or a country and CORSIA register the same carbon credit — corporate purchases are thus not counted;
• Such a rule would de facto exclude corporates' engagement from publicly-recognised carbon removal frameworks — such as the EU's CRCF — since they have been primarily designed to be accounted within NDCs.

The Nature+ Coalition's members remain at the disposal of SBTi's standards team to further discuss these recommendations.

Who we are

The Nature+ Coalition is an international association that gathers the voices of organisations committed to the conservation, protection and restoration of natural ecosystems, covering all the value chain (field operators, project developers, financial intermediaries, investors, corporates and other non-governmental stakeholders). Its members are dedicated to promoting high-integrity nature-based solutions (NbS) that address at the same time climate change (mitigation and adaptation), biodiversity protection and preservation, and socioeconomic development.