A net-zero goal is easy to announce. A credible plan needs detail: how much will be cut, by when, across which scopes, and what happens to the emissions that remain. This guide follows the structure of the Science Based Targets initiative (SBTi) Corporate Net-Zero Standard.
It is part of our business emissions section, within the wider carbon footprint guide.
What net zero means
The SBTi’s Corporate Net-Zero Standard defines corporate net zero as two things togetherSource 1:
- Reducing scope 1, 2 and 3 emissions to zero or to a residual level consistent with reaching net zero in eligible 1.5°C pathways.
- Permanently neutralising any residual emissions at the net-zero target year, and any emissions released after that.
This matches the global picture. The IPCC found that all modelled pathways limiting warming to 1.5°C involve rapid and deep emission cuts in all sectors, with carbon dioxide removal used to counterbalance residual emissionsSource 2.
The four parts of a net-zero target
Step 1: Near-term science-based target
Cuts over 5 to 10 years in line with 1.5°C. When the date arrives, set a new one.
Step 2: Long-term science-based target
The total cut needed to reach net zero by 2050 or earlier, typically at least 90%.
Step 3: Neutralisation of residual emissions
Remove carbon from the atmosphere and store it permanently to balance what remains.
Step 4: Beyond value chain mitigation
Optional extra action outside the value chain that avoids, reduces or removes emissions.
These are the four elements the SBTi sets outSource 1. A company can’t claim to have reached net zero until it has met its long-term target across all scopes and neutralised its residual emissionsSource 1.
Set the near-term target
Near-term targets galvanise the cuts needed by around 2030 and can’t be swapped for long-term onesSource 1. On the cross-sector pathway, the minimum is a linear reduction of 4.2% a year for scope 1 and 2 and 2.5% a year for scope 3Source 1.
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| Coverage | Near-term | Long-term |
|---|---|---|
| Scope 1 and 2 | At least 95% | At least 95% |
| Scope 3 | At least 67%, if scope 3 is 40% or more of the total | At least 90% |
As of Oct 2026 · Source: [1] SBTi Corporate Net-Zero Standard v1.3.1
Start from a solid base year. The GHG Protocol asks companies to choose a base year with verifiable data, and to recalculate it after significant structural changes such as acquisitions or divestmentsSource 4.
Set the long-term target
Long-term targets show how far value chain emissions must fall to align with net zero by 2050 or soonerSource 1. The SBTi notes that its cross-sector pathway cuts emissions by at least 90%, so long-term targets for many companies equal at least a 90% absolute reduction across scopesSource 1. Companies can choose 2050 or an earlier year.
Small companies have a simpler route: SMEs committing to net zero must cut scope 1, 2 and 3 emissions by at least 90% by the target year and neutralise what remainsSource 5. See the SME roadmap.
Plan for residual emissions
Whatever is left after the long-term cut must be neutralised by removing carbon from the atmosphere and storing it permanently. The SBTi’s own worked exampleSource 1:
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| Item | Amount (t CO₂e) |
|---|---|
| Base-year emissions | 100 |
| Excluded from the GHG inventory | 1 |
| Excluded from the target boundary | 1 |
| Covered by the long-term target | 98 |
| Residual after a 90% cut | 9.8 |
| Total to neutralise (9.8 + 1 + 1) | 11.8 |
As of Oct 2026 · Source: [1] SBTi Corporate Net-Zero Standard v1.3.1
The SBTi recommends disclosing planned neutralisation milestones and near-term investmentsSource 1. The Oxford Offsetting Principles add that organisations should increase the share of removals in the credits they use, aiming for 100% removals by the global net-zero date, 2050 at the latestSource 3. Our guide to residual emissions covers this in depth.
Report, review and recalculate
A plan is only credible if it is tracked. The SBTi requires companies toSource 1:
- Report annually: publish the company-wide inventory and progress against targets every year, with emissions and removals reported separately.
- Review every five years: check all active targets against the latest criteria at least every five years.
- Recalculate when things change: for example after mergers, acquisitions or divestments, a change of consolidation approach, or when scope 3 reaches 40% or more of the total.
Don’t count credits as cuts
The SBTi says carbon credits must not be counted as emission reductions towards near-term or long-term targets. They may only neutralise residual emissions or fund mitigation beyond the company’s targetsSource 1. A plan that relies on credits to hit its reduction targets is not net-zero aligned. See carbon neutral claims for the rules on what you can say.
Check your plan
Before you publish, check that the plan answers these questions:
- Boundary: does it cover scope 1, 2 and 3, with any exclusions disclosed?
- Base year: is it stated, with verifiable data and a recalculation policy?
- Near-term pace: does the yearly cut meet the minimum for 1.5°C?
- Long-term end point: is the target year 2050 or earlier, with the reduction it implies?
- Residuals: is the volume to neutralise estimated, with milestones for removals?
- Credits: are they reported separately and kept out of progress against targets?
Go beyond the value chain
The SBTi strongly encourages companies to go further than their own targets, funding mitigation beyond their value chainSource 1. This can include activities that avoid or reduce emissions as well as those that remove themSource 1. It is extra, never a substitute for cutting your own emissions. Reduce vs offset explains where it fits.